Tue, Nov 09, 2010 - Page 11 News List

UMC, ASE post lower revenues for last month

HEADWINDS:An analyst said that revenues for contract chipmakers and packagers would start to come under serious pressure if the NT dollar appreciates any further

By Kevin Chen  /  Staff reporter

United Microelectronics Corp (UMC, 聯電) and Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday both reported lower revenues for last month than the previous month, weighed down by the impact of the NT dollar strengthening against the US currency.

UMC, the world’s second-largest contract chipmaker, behind Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), said in an e-mailed statement that revenue dropped 2.23 percent to NT$10.70 billion (US$349.3 million) last month from NT$10.94 billion in September.

Last month’s figure was 15.09 percent higher than the NT$9.3 billion posted for the same period last year, the statement said.

The Hsinchu-based company did not elaborate on the decline in revenue yesterday, but on Oct. 27, UMC chief executive officer Sun Shih-wei (孫世偉) told investors that “the volatility of the local currency and other seasonal factors” would weigh on the company’s revenue in the current quarter.

Sun forecast that fourth-quarter revenue would fall by 5 percent from the third quarter because of the strengthening NT dollar.

In the first 10 months, UMC’s aggregate revenue rose 42.25 percent, to NT$99.81 billion, from a year earlier, the statement said.

ASE, the world’s biggest chip packager and tester, said in a stock exchange filing yesterday that its revenue reached NT$5.96 billion last month, a 1.31 percent decline from NT$6.04 billion the previous month, but a 21.67 percent rise from NT$4.9 billion one year ago.

The Kaohsiung-based company told investors last month that the appreciating NT dollar and gold prices would affect this quarter’s revenue, although that impact would be offset by an anticipated growth in shipments. ASE predicted on Oct. 29 that the local currency would trade average this quarter at NT$30.765 to the US dollar, up 3.25 percent from NT$31.80 in the third quarter.

From January to last month, ASE’s revenue totaled NT$56.02 billion, a jump of 51.7 percent from NT$36.93 billion last year, the company said in the filing.

Both contract chipmakers and packagers are likely to face more headwinds should the NT dollar increase in value any further, Deutsche Bank analyst Michael Chou (周立中) said in a report on Friday.

In the report, Chou said chip packagers, such as ASE and Siliconware Precision Industry Co (SPIL, 矽品精密), were likely to face higher pressure on margins than contract chipmakers like TSMC and UMC in the short term if the NT dollar strengthened faster than expected.

SPIL released its revenue figures for last month on Friday, showing a slide of 4.03 percent month-on-month and 22.29 percent year-on-year to NT$4.65 billion, its lowest monthly figure this year.

In the first 10 months of this year, revenue grew 9.7 percent from last year to NT$50.55 billion, according to a stock exchange filing.

Shares in UMC yesterday fell 1.62 percent to NT$15.15, while TSMC dropped 1.4 percent to NT$63.3, ASE plunged 3.05 percent to NT$27.05 and SPIL dipped 0.4 percent to NT$32.35.

Additional reporting by Ted Yang and Lisa Wang

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