United Microelectronics Corp (UMC, 聯電), the world’s fourth-largest contract chipmaker, yesterday reported a 72 percent jump in net profit for last quarter, but warned that weak seasonal demand and inventory correction would undermine margins this quarter.
Net profit reached NT$3.48 billion (US$118.5 million) last quarter, compared with NT$1.81 billion in the second quarter and NT$1.49 billion in the corresponding period last year, the chipmaker’s financial statement showed.
The quarterly income far exceeded Credit Suisse’s estimate of NT$2.83 billion.
UMC also said the results were better than it expected.
“For the fourth quarter, we have seen a decline in wafer demand. Primary factors that led to a weakened outlook stemmed from a seasonal correction, supply chain inventory control and macroeconomic uncertainties,” UMC chief executive office Yen Po-wen (嚴博文) told a teleconference.
Because of sagging demand, chip shipments are expected to decline by between 8 percent and 10 percent in the current quarter, from last quarter’s record-high of 1.33 million wafers, he said.
The average selling price is also predicted to fall about 2 percent sequentially this quarter due to lower prices for 12-inch wafers, he said.
The company’s utilization rate is also forecast to decline to about 75 percent this quarter, from 87 percent in the previous quarter, he said.
Operating margin would just break even, compared with 7.2 percent in the third quarter, he added.
However, the company expects to post an operating loss this quarter after including a forecast loss of NT$550 million for its new solar business, UMC chief financial officer Liu Chi-tung (劉啟東) told investors.
Operating income more than doubled to NT$2.4 billion last quarter, from NT$1.15 billion in the second quarter, the company’s financial statement showed.
On the progress of the company’s 28-nanometer (nm) technology, UMC said 28nm chips would account for a low single-digit percentage of its revenue at the end of this year.
Yen said UMC has more than 20 customers for its 28nm chips, with more than 30 tap-outs.
“The market remains cautious on UMC migrating to 28nm and beyond,” Daiwa Capital Markets analyst Eric Chen (陳慧明) said in a research note released after the teleconference.
UMC’s business growth outlook will be limited by its unclear 28nm business and stiff price competition for 40nm chips, Chen said.
Chen has a “hold” rating on UMC.
UMC’s revenue growth mainly came from 40nm and 65nm chips, which accounted for 34 percent of the chipmaker’s sales last quarter.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
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],”