Thu, Dec 09, 2010 - Page 11 News List

UMC’s November sales affected by a strong NT dollar

Staff writer, with CNA

United Microelectronics Corp (UMC, 聯電), the world’s second-largest contract chipmaker, said yesterday that sales last month dropped slightly as the New Taiwan dollar continued to rise against the greenback.

UMC reported NT$10.44 billion (US$347 million) in sales last month, down 2.43 percent from October, but 14.03 percent higher than a year ago.

Revenues in October were already down 2.23 percent from September to NT$10.7 billion as the local currency appreciated.

“The export-oriented electronics sector is sensitive to exchange rate changes,” Horizon Securities Co (宏遠證券) analyst Benson Huang said.

“The recent significant gains posted by the New Taiwan dollar against the greenback has affected the revenue of many local high-tech firms, and UMC is no exception,” Huang said.

Since the end of August, the NT dollar has risen more than 4 percent against the US dollar due to the continued inflow of foreign funds.

CURRENCY EFFECT

UMC said that for every 1 percent gain in the NT dollar against the greenback, it would translate into a 1 percent drop in quarterly sales.

In the third quarter of this year, UMC recorded NT$32.65 billion in sales, up 19.1 percent from the second quarter.

Sales in the first 11 months of the year totaled NT$110.25 billion, up 38.99 percent year-on-year, the company said.

Huang forecast that UMC’s sales this month would continue to be affected by the currency exchange rate unless the NT dollar weakens.

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