A recovery in chip demand has catapulted United Microelectronics Corp (UMC, 聯電) back into the black for the first quarter of this year after it suffered losses for the last three quarters, the company reported yesterday during an institutional investors conference.
The world's second-largest contract chipmaker reported a net profit of NT$216 million (US$6.21 million) in the first quarter, up from a net loss of NT$3.75 billion in the previous quarter.
But the figure was nearly 97 percent lower compared to the net profit of NT$6.47 billion recorded a year ago when the industry was just beginning to feel the pinch from the global slowdown.
The company's revenue in the period fell to NT$12.16 billion from NT$13.94 billion in the previous quarter and was sharply lower than the NT$23.59 billion a year ago. Analysts said the results were in line with market expectations, but were weaker than those of rival Taiwan Semiconductor Manufacturing Co (TSMC,
"TSMC's performance for the first quarter is considerably stronger than UMC's based on their sales figures," Dresdner RCM Global Investors Securities Investment Consulting Co analyst Gary Chu said.
TSMC's sales in the first quarter stood at NT$35.79 billion, up 8 percent from the previous quarter, while its net profit jumped 46 percent to NT$6.59 billion.
UMC said it will increase capital expenditures this year to US$1.6 billion, up from an originally planned US$800 million, in an effort to take advantage of a rebound in the demand. The company said its capacity utilization should increase to above 70 percent in the second quarter, up from 56 percent in the first quarter.
The company also canceled plans to sell unused equipment.
"The equipment was only sold on paper," said Liu Chitung (劉啟東), director of investor relations for the company. "We never moved it, but will need some time to bring it back into production."
UMC also said it has shelved plans to invest in China. "There is no urgency to go to China," said CEO John Hsuan (
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