United Microelectronics Corp (UMC, 聯電), the world’s No. 3 contract chipmaker, yesterday said that net profits shrunk by 10.28 percent last quarter due to slow demand.
Earnings dropped to NT$2.29 billion (US$75.95 million) during the first quarter, compared with NT$2.55 billion in the previous quarter. That translated into earnings per share (EPS) of NT$0.19 last quarter, down from NT$0.21 the previous quarter.
Despite the decline, the result was better than some analysts’ forecasts. Credit Suisse analyst Randy Abrams was expecting EPS of NT$0.1.
UMC saw its foreign-exchange losses expand to NT$517 million last quarter from NT$496 million in the prior quarter, company data showed.
“Utilization rates at our 8-inch fabs as well as 12-inch advanced nodes were near full capacity, driven by the strength in the consumer and communication segments [in the first quarter],” UMC chief executive official Yen Po-wen (顏博文) told an investors’ teleconference.
However, the company expects wafer shipments for this quarter to be flattish, Yen said.
Average selling prices will be also little changed in US dollar terms, he said.
“A pickup in the mature 12-inch wafer business due to higher demand from wireless, Internet of things and consumer electronics .... will be offset by a decline in the 28-nanometer [nm] business,” Yen said.
“It is a challenge to boost 28nm wafer demand given our very concentrated client base,” he said.
Nonetheless, UMC is sticking to its target of expanding 28nm technology’s revenue share to 20 percent in the fourth quarter, from 17 percent last quarter, he said.
Gross margin is expected to fall to the mid-teens percentage, Yen forecast.
That compares with 19.9 percent last quarter.
Yen also talked about the company’s technology roadmap, with UMC starting to ship 14nm wafers to a client in the first quarter and volume expected to increase this quarter as it adds about four or five more clients.
The company is considering developing 22nm process technology to cater to clients, following in the steps of its bigger rival Taiwan Semiconductor Manufacturing Co (台積電), Yen said.
UMC plans to spend US$2 billion on capital expenditure this year.
In other news, Siliconware Precision Industries Co Ltd (矽品精密), the world’s third-largest chip tester and packager, yesterday said that first-quarter earnings plunged 65 percent to NT$1 billion from NT$2.83 billion in the fourth quarter of last year.
That marked the weakest earnings in five quarters.
Gross margin slid to 19.2 percent last quarter from 23.6 percent a quarter ago, mainly due to the impact of a stronger New Taiwan dollar.
The local currency’s appreciation also resulted in a foreign-exchange loss of NT$310 million last quarter, the company said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure