United Microelectronics Corp (UMC, 聯電), the nation’s second-largest contract chipmaker, yesterday said that net profit last quarter surged 84 percent annually, aided by rising demand for display driver ICs for consumer and communications devices amid the COVID-19-induced work-from-home trend worldwide.
UMC said it expects the growth momentum to hold well probably only for the current quarter, as customers might scale back orders in the second half of the year, when inventory correction would re-emerge due to mounting risks related to the pandemic’s impact on the global economy and end-product demand.
As the prospects for the second half dim, UMC has trimmed its revenue forecast for the global semiconductor industry to an annual contraction of 5 percent this year, from the annual growth of 5 percent it estimated in February.
The foundry segment would grow by a low-single-digit percentage annually, a downward revision from its previous estimate of high-single-digit percentage growth, UMC said.
UMC chief financial officer Liu Chi-tung (劉啟東) told investors that the firm would outgrow the foundry segment this year after fully acquiring a Japanese unit, renamed United Semiconductor Japan Co.
This quarter, wafer shipments and average selling prices would grow by 1 to 2 percent on a quarterly basis, UMC said.
“Despite significantly higher levels of uncertainty caused by the COVID-19 pandemic, current [quarter] outlook indicates slightly higher wafer demand, mainly supported by inventory replenishment across computer peripheral and consumer electronics end markets,” UMC co-president S.C. Chien (簡山傑) said.
A much-anticipated recovery in 28-nanometer orders is to propel gross margin to about 20 percent this quarter, from 19.2 percent last quarter, UMC said.
The 28-nanometer technology is fueled by increasing demand from the 4G segment, camera modules, and mid and entry-level smartphones, as well as higher AMOLED adoption, Chien said.
The chipmaker expects 28-nanometer technology to contribute a larger portion of its revenue this quarter from a trough of 9 percent last quarter.
Higher utilization of 8-inch fabs would also help lift gross margin this quarter, Chien said.
The equipment loading rate at its 8-inch fabs would be full this quarter and in the second half after factoring in the impact of the pandemic, Chien added.
Overall, factory utilization is expected to climb to about 95 percent this quarter from 93 percent last quarter, UMC said.
Last quarter, UMC’s net profit jumped to NT$2.21 billion (US$73.61 million), compared with NT$1.2 billion in the same period last year.
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