United Microelectronics Corp (UMC, 聯電), the world’s No. 2 contract chipmaker, yesterday reported its fourth straight quarterly profits amid a strong recovery in demand for chips used in consumer electronics.
Continued rising demand for higher-priced chips would boost profits even further this quarter, the company said.
In the first quarter, UMC posted earnings of NT$3.48 billion (US$110 million), compared with losses of NT$8.16 billion a year ago when the global recession curbed electronics demand.
On a quarterly basis, the results represented a decline of 21 percent from the NT$4.4 billion earned in the final quarter of last year, because of falling prices and a stronger New Taiwan dollar, the company said.
Despite the recovery in demand, UMC was relatively conservative in its capacity expansion plans compared with its bigger rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
TSMC has said it plans to break ground on a new 12-inch fab in Taichung in the middle of the year. The new plant will be able to process 100,000 12-inch wafers a month, like its other 12-inch fabs.
UMC chief executive Sun Shih-wei (孫世偉) told investors yesterday that the company’s “key focus for now is to improve our product [mix].”
“We want to migrate to [more advanced] 65-nanometer and 55-nanometer [process technology]” in collaboration with customers, Sun said.
Revenues from chips made on 65-nanometer technology are expected to climb to 25 percent this quarter and rise further to between 35 percent and 40 percent at the end of the year. Sales from 65-nanometer processed chips accounted for 18 percent of total revenues of NT$26.72 billion in the first quarter, Sun said.
Encouraging “customers to order more chips using the more advanced technology will give a big boost to UMC’s average selling price and revenues, and reduce the risk of overcapacity,” said Kenneth Lee (李克揚), a semiconductor analyst with Fubon Securities Investment Services Co (富邦投顧).
UMC expects higher profits and revenues in the current quarter amid brisk demand across the board — consumer electronics, communications and computers, Sun said.
Gross margin could rise to 28 percent or 29 percent this quarter, from 24.6 percent last quarter, he said.
New outsourcing orders from integrated device manufacturers, which design and produce chips in their own factories, should also contribute to an improved product mix, Sun said.
“Demand is quite strong ... We are quite optimistic about the second half,” Sun said.
Shipments are forecast to grow by between 7 percent and 9 percent, from last quarter’s record-high of 1.03 million 8-inch equivalent wafers, UMC said, lifting factory utilization rate to more than 95 percent this quarter from 88 percent last quarter.
Commenting on the progress of its planned acquisition of Chinese chipmaker He Jian Technology (Suzhou) Co (和艦), UMC chief financial officier Liu Chi-tung (劉啟東) said the company was preparing to apply to the government, but gave no timetable.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained