United Microelectronics Corp (UMC, 聯電) yesterday posted its first quarterly loss in about a decade as a one-time cost of NT$700 million (US$22.72 million) from a suspended DRAM project with China’s Fujian Jinhua Integrated Circuit Co (福建晉華) added to weakness in advanced chip demand.
The company has suspended all research and development for Fujian Jinhua and has idled all related equipment at a fab in Tainan, UMC copresident Jason Wang (王石) told an investors’ conference.
Defending against allegations that UMC stole technologies from Micron Technology Inc, Wang said that UMC has 15 years of DRAM manufacturing experience it accumulated from 1996 to 2010, and its DRAM team at one point included more than 150 people.
UMC is to vigorously defend itself against all false charges, Wang added.
The world’s No. 3 contract chipmaker reported losses of NT$1.71 billion for the quarter ending on Dec. 31, a reversal from a net profit of NT$1.72 billion registered in the previous quarter, the company’s financial statement showed.
Operating costs climbed 12 percent quarter-on-quarter to NT$6.4 billion primarily due to the booking of NT$700 million from the DRAM project, UMC said.
Average selling prices dipped mostly due to a significant decline in customer demand for 14-nanometer (nm) technology for cryptocurrency mining chips, the chipmaker said.
UMC said that 14nm chips only accounted for 1 percent of total revenue last quarter, down from 5 percent the previous quarter.
This year would be challenging for the semiconductor industry due to continuing weakness in smartphone demand and growing macroeconomic uncertainty stemming from trade tensions between the US and China, UMC said.
The chipmaker expects zero growth in the foundry sector this year, Wang said, adding that UMC’s performance would be in line with the sector.
Wang also gave a gloomy outlook for the current quarter.
“Looking into the first quarter of 2019, we anticipate further deceleration in wafer demand due to a softer-than-expected outlook in entry and mid-level smartphones, as well as falling cryptocurrency valuations,” Wang said.
Wafer shipments are to fall between 6 and 7 percent quarterly, Wang said.
The factory utilization rate would sink to near 80 percent from 88 percent, with 12-inch fabs nearing 70 percent, he said.
Lower factory usage would drive down gross margin to about 5 percent, while the average selling price would continue to drop by 1 to 2 percent sequentially in US dollar terms, he said.
The company has said it plans to spend US$1 billion on new equipment this year.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
RESPONSE: The Japanese Ministry of Finance might have to intervene in the currency markets should the yen keep weakening toward the 160 level against the US dollar Japan’s chief currency official yesterday sent a warning on recent foreign exchange moves, after the yen weakened against the US dollar following Friday last week’s Bank of Japan (BOJ) decision. “We’re seeing one-directional, sudden moves especially after last week’s monetary policy meeting, so I’m deeply concerned,” Japanese Vice Finance Minister for International Affairs Atsushi Mimura told reporters. “We’d like to take appropriate responses against excessive moves.” The central bank on Friday raised its benchmark interest rate to the highest in 30 years, but Bank of Japan Governor Kazuo Ueda chose to keep his options open rather than bolster the yen,
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS