United Microelectronics Corp’s (UMC, 聯電) net profit surged 48 percent year-on-year to NT$3.4 billion (US$114.63 million) last quarter, due to a large provisional investment tax credit and a Chinese government subsidy for its China fab, the company said yesterday
That represented 92 percent annual growth from NT$1.77 billion in the fourth quarter of last year.
UMC said it booked an income tax benefit of NT$1.17 billion and gained other operational income of NT$977 million, mostly due to the Chinese government’s subsidy.
However, operating income contracted nearly 60 percent to NT$769 million from NT$1.9 billion the previous quarter, the world No. 3 contract chipmaker’s statement showed.
“Looking into the second quarter, we anticipate our wafer shipments will increase, mainly due to growing business opportunities in wireless communication, as well as demand for chips used in computer peripherals,” UMC copresident Jason Wang (王石) told an investors’ teleconference.
“We are securing new product tape-outs across advanced and mature technologies, including 28-nanometer [nm] technology,” he said.
UMC expects revenue contribution from 28nm chips to pick up this quarter and next quarter, Wang said.
Last quarter, 28nm chips accounted for 12 percent of the chipmaker’s overall revenue of NT$37.5 billion.
With growing demand for its 28nm chips, gross margin is to increase to about 15 percent this quarter from 12.4 percent last quarter, Wang said.
Wafer shipments should grow between 2 and 4 percent this quarter, but average selling prices remain flat in US dollar terms, he said.
Growth this quarter is supported by increasing demand, mainly in the computer segment, as well as the communication segment, Wang said.
UMC expects its revenue to grow slower in the foundry sector this year, as it is undergoing a restructuring period, Wang said, adding that growth would primarily come from capacity increases at its Chinese fabs, Hejian Technology (Suzhou) Co Ltd (和艦科技) and a 12-inch wafer fab in Xiamen.
The foundry sector should grow by a bit more than the 5 percent annual growth expected of the global semiconductor industry this year, he said.
UMC’s board of directors yesterday approved the distribution of a cash dividend of NT$0.7 per common share.
That represents a payout ratio of about 88 percent, compared with the company’s earnings per share of NT$0.79 last year.
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