United Microelectronics Corp (UMC 聯電), the world’s second-largest contract chipmaker, said yesterday it was optimistic about revenue growth in the third quarter as global demand for electronic products was expected to regain momentum.
The Hsinchu-based company reported a profit of NT$1.55 billion (US$47 million), or NT$0.12 per share, in the second quarter. The figure not only rebounded 11.9 percent from the first quarter, but also reversed losses in the last three quarters.
“The company is expected to see more revenue increase in the third quarter as the world economy improves and the industry is in high season,” UMC chief executive officer Sun Shih-wei (孫世偉) told an investors conference.
Sun forecast that third-quarter wafer shipments would rise between 8 percent and 10 percent from the second quarter, while average selling prices (ASP) would advance 5 percent quarter-on-quarter. As for the fourth quarter, Sun said he expected ASP to continue rising thanks to a better product mix.
The utilization rate, meanwhile, would rise to 85 percent this quarter, from 79 percent between April and last month, he said, adding that the company had also raised its capital expenditure to US$500 million for this year, from US$400 million estimated three months earlier.
Sun gave the positive projection to investors after the company’s quarterly revenue surged 108.8 percent to NT$22.63 billion, from NT$10.84 billion in the first quarter, but declined 10.3 percent from the same period of last year.
“Demand significantly picked up in the second quarter, pushing up 8-inch wafer shipments to the pre-recession pace at 898,000 wafers,” Sun said. “The company is upbeat about the outlook and is aware of remaining uncertainties.”
The company posted NT$900 million in non-operating expenses after writing down NT$1.7 billion investment losses at UMC Japan.
UMC chief financial officer Liu Chi-tung (劉啟東) said the situation at UMC Japan was improving.
For the first six months, net operating revenues stood at NT$33.46 billion, dropping 32 percent from last year, while net operating expenses fell 16.9 percent to NT$5.66 billion.
Connor Liu (劉坤儒), senior fund manager at Deutsche Far Eastern Asset Management Co, said UMC managed to turn profits in the second quarter as it had promised.
Conner Liu said the chipmaker may stay in the black this quarter but the outlook for the final quarter remains to be seen.
Bevan Yeh (葉獻文), senior fund manager at Prudential Financial Securities Investment Trust Enterprise (保德信投信), said UMC is likely to report a two-digit profit growth this quarter but may suffer a decline in the final quarter.
“As a concrete recovery remains elusive so far, downstream firms would keep a conservative inventory,” Yeh said.