United Microelectronics Corp (UMC, 聯電), the world's second-largest contract chipmaker, yesterday said first-quarter net income jumped seven-fold thanks to a spike in proceeds from selling assets.
Commenting on core business, chairman Jackson Hu (
"The visibility is high for the third quarter. Demand will be solid according to feedback from our customers," Hu told investors yesterday.
Revenues would expand by double-digit percentage points during the third quarter from the second quarter and profits would also improve significantly, Hu said.
During the slack January-March quarter, UMC's net income expanded to NT$12.29 billion (US$379 million), compared to NT$1.52 billion during the same period last year. Earnings per share also rose to NT$0.67 from NT$0.08 during the same period.
The drastic improvement was attributed to massive asset sales. UMC posted a non-operating income of NT$12.9 billion, compared to NT$1.22 billion a year earlier.
Sales increased 20 percent to NT$24.38 billion from NT$20.29 billion a year ago, the company said earlier.
By contrast, operating income, shrank around 79 percent during the first three months of the year to NT$85 million from NT$302 million a year ago and 90 percent from the fourth quarter on sagging demand for chips made on cutting-edge technologies.
"During the fourth quarter, weak demand for communications chips, usually made with advanced technologies, has driven the chip price lower and hurt our gross margins," Hu said, adding that quarterly net income had exceeded the company's expectations.
Communications sector demand would pick up in the current quarter as sales of handset-related components would start to accelerate amid a growing need for entry-level mobile phones in emerging markets like India and China, Hu said.
As a result, UMC's wafer shipments would grow by about 6 percent during the current quarter from 754,000 8-inch equivalent wafers in the January-March quarter, Hu said. Factory utilization would also rise to 80 percent from last quarter's 79 percent, he said.
Chip prices would increase by 2 percent quarter-on-quarter, ending a one-year-long slide, while gross margins would climb to between 15 percent and 20 percent from 13 percent last quarter, according to Hu.
These positive signs point to a full recovery for UMC, said Eric Chen (陳慧明), an analyst with BNP Paribas Securities Co's local branch.
"Now it is UMC's turn to follow in the footsteps of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Singapore's Chartered Semiconductor Manufacturing Ltd (特許)," Chen said.
Chen, who is one of the few industry analysts to hold a "buy" rating on the world's No.2 contract chipmaker, said UMC's first-quarter earnings were in line with his expectations.
"I believe most analysts will upgrade their rating on UMC soon," Chen said.
As of yesterday shares of UMC had climbed 23 percent to NT$22.3 since the beginning of the year, compared to an 11-percent gain for the benchmark TAIEX index.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS