United Microelectronics Corp (UMC, 聯電), the nation’s No. 2 contract chipmaker, yesterday saw its strongest quarterly net profits for two years in the second quarter on higher shipments and improved losses from its solar business.
However, the chipmaker said it expects shipments to drop by about 5 percent in the next quarter as weak macroeconomic conditions curtail end-product demand and prolong inventory digestion.
Average selling price is expected to drop 3 percent sequentially this quarter, UMC said, adding that gross margin would decline to a mid-teen percentage this quarter from 22.9 percent last quarter.
“Looking forward into the third quarter, the limited end-market visibility and inventory correction we mentioned during our first-quarter conference call is expected to continue,” UMC chief executive officer Yen Po-wen (顏博文) told an investors’ teleconference yesterday. “Current weakness in overall demand, partly due to uncertainties in economic outlook, is set to prolong inventory adjustment through the second half.”
That would bring down the company’s factory utilization to between 87 percent and 89 percent this quarter from last quarter’s 94 percent, Yen said.
Yen expects revenue from advanced 28-nanometer chips to account for 10 percent of the chipmaker’s total revenue this year, with the figure climbing to 15 percent in the second quarter of next year.
Net profit expanded 15.6 percent to NT$4.6 billion (US$145.93 million) last quarter, compared with NT$3.98 billion in the first quarter.
Non-operating income jumped to NT$1.3 billion last quarter from income of NT$255 million the previous quarter after the firm booked a narrowed loss of NT$170 million from solar subsidiary Topcell Solar International Co (聯景光電).
UMC said it would sell Topcell to local peer Motech Industries Inc (茂迪) this quarter.
UMC retained its capital spending this year unchanged at US$1.8 billion.
The chipmaker said in a statement filed with the Taiwan Stock Exchange yesterday that its board of directors had given the go-ahead to a share buyback program worth up to NT$78.65 billion.
The company plans to repurchase 200 million common shares, or 1.57 percent of UMC’s total outstanding shares, at a price of between NT$7.55 and NT$18.8 per share during a two-month period beginning today and running through Sept. 29.
UMC said it plans to transfer the repurchased shares to employees.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS