Daiwa Securities said yesterday that United Microelectronics Corp (UMC, 聯電) could brave the headwinds of the first quarter, a traditionally slow season for the integrated circuit industry, to report sequential sales growth.
In a research note, the securities firm said that demand for drive ICs remains solid, so that UMC could see its consolidated sales for the January to March period rise 1 percent from a quarter earlier, helping the chipmaker offset the impact from the slow-season effect during the three-month period.
In addition to the demand for drive ICs, Daiwa Securities said UMC is expected to start to ship chips made on its 28 nanometer process to Taiwan-based IC designer MediaTek Inc (聯發科) for tablet computer use in the first quarter, which will boost the chipmaker’s sales.
The brokerage’s forecast represented a contrast to sales guidance given by rival Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week, which said TSMC’s first-quarter consolidated sales could fall from 5 to 7 percent from the fourth quarter due to inventory adjustments.
Daiwa Securities said monthly production of UMC’s chips made on the 28 nanometer process could reach about 10,000 units in the first quarter and is expected to double in the fourth quarter.
UMC began production of chips made on the 28 nanometer process in the fourth quarter, but the production made up only a small fraction of its total sales.
The expectations of a 1 percent sequential increase in UMC consolidated sales showed an improvement from the company’s revenue in the fourth quarter, when the figure fell 8.04 percent from the third quarter to NT$30.72 billion (US$1.02 billion).
Fourth-quarter sales were in line with the company’s previous estimates, taking inventory adjustments into account.
In the IC business, the slow-season effect continues into the first quarter from the fourth quarter, and sales can stage a rebound in the second quarter. UMC is scheduled to hold an investors’ conference tomorrow to release its fourth-quarter results and give sales guidance for the first quarter.
In the first nine months of last year, UMC posted NT$0.95 in earnings per share, up from NT$0.43 recorded in the same period of the previous year.