United Microelectronics Corp (UMC, 聯電), the world’s second-largest contract chipmaker, yesterday forecast that wafer shipments and average selling prices this quarter would stay flat compared with the first three months in the aftermath of Japan’s March 11 disasters.
UMC shipped 1.1 million 8-inch wafers in the first quarter, with capacity utilization hitting 90 percent. Utilization is forecast to drop to the mid-80 percent range this quarter, the company said in a statement.
TRICKLE-DOWN EFFECT
“We have tempered our expectations for revenue and profit because more time is needed to accurately assess worldwide semiconductor demand” after Japan was hit by an earthquake and tsunami last month, UMC chief executive officer Sun Shih-wei (孫世偉) said.
The company will not be able to make a better forecast for performance in the second half until late next month because Japan’s impact on the supply chain is complicated, with some customers stocking up and some slashing orders because of possible supply constraints, he told an investor conference.
Sun said the company faced shortages of some materials, including silicon wafers, at the beginning of the disaster, but it was “not much of a concern” for UMC’s current component supplies.
However, there were still some long-term uncertainties as Japan prepares to implement rolling blackouts during the summer, he said.
GROWTH ADJUSTED
UMC adjusted its projected growth for the semiconductor industry this year downward to 5 percent, instead of a pre-disaster forecast of between 5 percent and 10 percent.
UMC’s net income climbed 28.7 percent year-on-year, or declined 30.2 percent quarter-on-quarter, to NT$4.5 billion (US$156 million), or NT$0.36 per share, in the first quarter. First-quarter revenue increased 5.3 percent from a year ago to NT$28.1 billion, but was down 10.2 percent quarter-on-quarter.
The chipmaker expected the contribution from its 40 nanometer processor technologies to account for 10 percent of total revenue in the second half.
It plans to test 28 nanometer technology in the middle of the year and mass produce the products in the first half of next year.
CAPITAL SPENDING
Capital expenditure remained unchanged at US$1.8 billion — the same amount as last year — mostly channeled into 40 nanometer and 28 nanometer development, Sun said. Gross margin will fall to the “mid to low” 20 percent range this quarter, from 27.5 percent in the previous quarter.
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