United Microelectronics Corp (UMC, 聯電), the world’s second-largest contract chipmaker, dismissed speculation yesterday about large-scale layoffs to ride through the latest market downturn.
A public relations official at UMC said the company had not plans to cut jobs after a Chinese-language report in the Liberty Times (the Taipei Times’ sister paper) yesterday said that the Hsinchu-based company would do so to lower manpower costs and increase operational efficiency.
The Liberty Times report said the proposed layoff would be the second-largest of its kind in the company’s 28-year history. Another Chinese-language newspaper, the Economic Daily News, also carried the report yesterday.
The UMC official, who asked to remain anonymous, said the company had encouraged employees that had worked for the company for more than 25 years to file for retirement.
The official said that the company would not offer any incentives for retirement filing and did not set any quota or target for the shakeup. He did not elaborate.
For the first eight months of the year, UMC’s revenue dropped 2.86 percent year-on-year to NT$65.94 billion (US$2.06 billion). Analysts expect the company’s revenue and earnings to slow further in the second half of the year because of the global economic slowdown.
Shares of UMC fell 2.17 percent to NT$11.25 yesterday on the Taiwan Stock Exchange after the Chinese-language Commercial Times newspaper cited unidentified industry officials as saying that made-to-order chip foundries, of which UMC is the second largest, would cut purchases of equipment 10 percent to 15 percent next year.
Chip foundries will reduce expenditure on equipment by 20 percent to 30 percent this year, the newspaper said.
UMC, which has seen its share prices drop 44.17 percent so far this year, said yesterday its equipment spending this year will be at the “low end” of its earlier forecast.
The company’s spending on factories and equipment will be closer to the minimum of their US$500 million to US$700 million forecast this year, UMC said in an e-mailed response to questions from reporters.
The company spent US$270 million during the first half of this year.
To support its falling share prices, UMC announced on Aug. 27 it would spend as much as NT$4.21 billion (US$131.4 million) to buy back 1.51 percent of its shares on the open market.
The company said at the time that it would pay NT$9.31 to NT$21.05 each for 200 million shares purchased. After that, UMC said it would cancel these shares. The buyback will end on Oct. 27, it said.
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