Thu, Jul 26, 2012 - Page 13 News List

UMC beats forecast for Q2 and expects growth this quarter

By George Liao  /  Staff reporter

United Microelectronics Corp (UMC, 聯電), the world’s No. 2 contract chipmaker, yesterday reported stronger-than-expected net income in the second quarter and said it expects mild growth in revenue this quarter on the back of rising high-end chip sales.

Net income reached NT$2.99 billion (US$99.17 million) in the second quarter, growing 124 percent from NT$1.36 billion in the first quarter, but down 6.76 percent from NT$3.19 billion one year earlier.

Net operating revenues totaled NT$27.62 billion in the quarter, up 16.2 percent t from NT$23.77 billion in the first quarter, but down 1.9 percent from NT$28.15 billion in the corresponding period last year, UMC said.

“UMC’s performance in the second quarter was better than we had expected,” UMC chief executive Sun Shih-wei (孫世偉) told investors yesterday.

The growth in shipments was mainly because of increased demand from the communication and consumer electronics segments, Sun added.

“We expect mild revenue growth in the third quarter, with sales of 40nm chips contributing significantly after many new products, such as Windows 8 devices and iPhone 5, enter volume production,” Sun said.

In the first half of the year, net income reached NT$4.33 billion, down 43.6 percent from NT$7.68 billion one year earlier. Net operating revenues totaled NT$51.39 billion in this period, down 8.7 percent from the NT$56.27 billion a year earlier, the company’s data showed.

Sun also said the FinFET 3D transistor technology and the company’s expansion project in the Southern Taiwan Science Park would solidify its advanced technology and capacity and bring another round of growth for UMC.

For this quarter, Sun said he expected UMC’s wafer shipments and revenues to increase marginally, gross profit margin to remain in the mid-20 percent range, capacity utilization to remain flat and the computer and consumer electronics segment to outpace the communications segment from the previous quarter.

Looking further ahead, Sun said: “Sales of UMC’s high-end chips have entered another round of growth and we have been putting in efforts to enhance mass production technology, capacity expansion and customer services. The efforts will gradually translate into revenue results beginning from the second half of the year.”

UMC is cautious about its outlook as the eurozone debt crisis, the slowdown of growth in emerging markets and China and the sluggish US economy continue to drag down demand for information and communication products, which will in turn slow down demand for chips, Sun said. However, new products scheduled to launch in the second half of the year, especially around the Christmas holiday season, will provide momentum for growth, he said.

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