Contract chipmaker United Microelectronics Co (UMC, 聯電) yesterday said its net profit last quarter rose 45 percent quarterly, due mainly to improving chip demand for mid-to-low-end smartphones.
The Hsinchu-based chipmaker expects the growth momentum to carry into this quarter, driven by inventory replenishment demand from “some selected customers in the communications segment.”
That would help wafer shipments grow 2 to 4 percent quarterly and help raise wafer prices by 1 percent in US dollar terms, UMC said.
However, gross margin would be little changed from 15.7 percent last quarter, as the factory utilization rate would remain at the higher end of 80 percent, the chipmaker said.
Overall, UMC remained conservative about its business outlook.
“Customers are continuing to manage their inventory carefully amid a weakened global economic environment, which might contribute to lower visibility in the business forecast during the second half,” UMC copresident Jason Wang (王石) told an investors’ teleconference.
“Communications will be the strongest segment in the third quarter, particularly in the mid-to-low-end smartphone area,” Wang said.
The communications segment was the largest revenue generator for UMC last quarter, contributing 52 percent, with revenue of NT$36.06 billion (US$1.16 billion).
Regarding global 5G development, Wang said that the company holds a similar view as some of its semiconductor peers.
“Global 5G development is accelerating,” Wang said. “We expect 5G to arrive earlier than originally expected.”
Messages from UMC’s customers have shown that they are speeding up chip production plans and working to widen product coverage, which Wang said is a good sign for the company.
“Hopefully, we can penetrate into this growing [market],” he said.
For UMC, the addressable 5G market is diverse, from advanced 28-nanometer and 22-nanometer technology to mature technology used to make power management chips and driver ICs for ultra-high-definition 8K panels, Wang said.
UMC’s net profit in the second quarter jumped to NT$1.74 billion, compared with NT$1.2 billion in the first quarter.
However, on an annual basis, net profit more than halved from NT$3.66 billion.
Earnings per share rose to NT$0.15 from NT$0.1 in the first quarter, but were still lower than NT$0.3 a year earlier.
UMC attributed the quarterly growth to increasing chip demand for low-to-mid-range smartphones, switches and routers, which helped boost its factory utilization to 88 percent.
UMC’s conservative view about the foundry business was not a surprise.
Gartner Inc in its latest report forecast that revenue in the global foundry sector would decline 1.74 percent to US$61.78 billion this year.
The foundry sector would not return to growth until next year, which would lead to a compound annual growth rate of 4.5 percent to US$78.3 billion in revenue during from last year to 2023, Gartner said yesterday.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to