Thu, Jun 14, 2018 - Page 12 News List

UMC shares surge after price-hike announcement

EXPANSION STRATEGY:The chipmaker said that it would boost capacity of 8-inch wafers in China, because it does not have room to do so in Taiwan

By Lisa Wang  /  Staff reporter

United Microelectronics Corp (UMC, 聯電) yesterday saw its shares rally to nearly the 10 percent daily limit after the nation’s No. 2 contract chipmaker said it hiked prices for 8-inch wafers to offset higher costs for silicon wafers and other raw materials, as well as tight supply.

The Hsinchu-based chipmaker said it is running short of 8-inch wafers and has little room to boost capacity in Taiwan.

As a result, it plans to increase the capacity of its Chinese subsidiary Hejian Technology (Suzhou) Co Ltd (和艦科技), UMC said, adding that the subsidiary would see its monthly 8-inch wafer capacity rise from 65,000 wafers to 75,000 by the end of this year at the earliest, UMC said.

“We have adjusted prices [for 8-inch wafers] only, to match price increases in raw materials,” company spokesman Liu Chi-tung (劉啟東) said in a telephone interview.

Liu’s comments came after UMC co-president Jason Wang (王石) told investors: “We are not increasing prices just because of tight supply. We are raising prices because of raw material costs, especially in the area of 8-inch wafers. We made some adjustment there.”

The chipmaker would also continue planned capacity expansion at a 12-inch fab in Xiamen, China, it said, adding that it plans to boost the fab’s monthly capacity from 17,000 wafers to 25,000 wafers by end of this year.

UMC said that it expects its wafer shipments to grow by between 2 and 4 percent this quarter from last quarter, but average selling prices would remain flat in US dollar terms, while factory utilization would be a percentage in the mid-90s.

The stock yesterday surged 9.79 percent to NT$18.5 in Taipei trading, surpassing rival Taiwan Semiconductor Manufacturing Co (台積電), which saw its shares jump 1.31 percent to NT$232. Both stocks outperformed the TAIEX, which inched up 0.26 percent.

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