Silicon Integrated Systems Corp (矽統), which United Microelectronics Corp (UMC, 聯電) took over last month, posted a record fourth-quarter loss, almost two-thirds of which came from costs unrelated to its normal business.
Silicon Integrated, the world's No. 3 maker of computer chipsets, posted a net loss of NT$2.5 billion (US$72 million) compared with a NT$172 million loss a year ago, the company said. Sales rose more than four-fifths to NT$4.9 billion.
Costs rose because stock piled up after the company changed its manufacturing process to avoid patent violations with UMC. Silicon Integrated will place orders with its new parent, helping it cut expenses and return to profit this year, Chairman John Hsuan (宣明智) said.
"Silicon Integrated will improve the quality of its products in the short term and boost production in the long term," said Hsuan, who also heads UMC.
The company's fourth-quarter non-operating loss, including inventory expenses, was NT$1.4 billion. Full-year net loss widened more than fivefold from a year ago to NT$3.4 billion.
Sales in the first quarter will match fourth-quarter revenue, Hsuan said. Prices of Silicon Integrated's chipsets will rise as the company focuses on higher-margin products, he added.
Gross margin will rise this year from 21 percent last year on rising average prices, the company said.
Silicon Integrated's third-quarter net loss widened sixfold after slowing computer demand forced the company to cut prices to boost sales.
The company, originally a chip designer, stopped placing manufacturing orders with UMC after building its own plant in March 2000. UMC later sued Silicon Integrated for violating its patents.
Shares of Silicon Integrated fell 0.4 percent to NT$26.6.
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