United Microelectronics Corp (UMC, 聯電), the world’s No. 2 contract chipmaker, yesterday reported its fourth straight quarterly profits amid a strong recovery in demand for chips used in consumer electronics.
Continued rising demand for higher-priced chips would boost profits even further this quarter, the company said.
In the first quarter, UMC posted earnings of NT$3.48 billion (US$110 million), compared with losses of NT$8.16 billion a year ago when the global recession curbed electronics demand.
On a quarterly basis, the results represented a decline of 21 percent from the NT$4.4 billion earned in the final quarter of last year, because of falling prices and a stronger New Taiwan dollar, the company said.
Despite the recovery in demand, UMC was relatively conservative in its capacity expansion plans compared with its bigger rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
TSMC has said it plans to break ground on a new 12-inch fab in Taichung in the middle of the year. The new plant will be able to process 100,000 12-inch wafers a month, like its other 12-inch fabs.
UMC chief executive Sun Shih-wei (孫世偉) told investors yesterday that the company’s “key focus for now is to improve our product [mix].”
“We want to migrate to [more advanced] 65-nanometer and 55-nanometer [process technology]” in collaboration with customers, Sun said.
Revenues from chips made on 65-nanometer technology are expected to climb to 25 percent this quarter and rise further to between 35 percent and 40 percent at the end of the year. Sales from 65-nanometer processed chips accounted for 18 percent of total revenues of NT$26.72 billion in the first quarter, Sun said.
Encouraging “customers to order more chips using the more advanced technology will give a big boost to UMC’s average selling price and revenues, and reduce the risk of overcapacity,” said Kenneth Lee (李克揚), a semiconductor analyst with Fubon Securities Investment Services Co (富邦投顧).
UMC expects higher profits and revenues in the current quarter amid brisk demand across the board — consumer electronics, communications and computers, Sun said.
Gross margin could rise to 28 percent or 29 percent this quarter, from 24.6 percent last quarter, he said.
New outsourcing orders from integrated device manufacturers, which design and produce chips in their own factories, should also contribute to an improved product mix, Sun said.
“Demand is quite strong ... We are quite optimistic about the second half,” Sun said.
Shipments are forecast to grow by between 7 percent and 9 percent, from last quarter’s record-high of 1.03 million 8-inch equivalent wafers, UMC said, lifting factory utilization rate to more than 95 percent this quarter from 88 percent last quarter.
Commenting on the progress of its planned acquisition of Chinese chipmaker He Jian Technology (Suzhou) Co (和艦), UMC chief financial officier Liu Chi-tung (劉啟東) said the company was preparing to apply to the government, but gave no timetable.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
RSS