United Microelectronics Corp (UMC, 聯電), the world’s third-largest contract chipmaker, saw its net profit grow almost 3-folds last quarter, thanks to robust chip demand for consumer electronics and computing-related applications.
Net profit surged to NT$11.2 billion (US$394.64 million) during the final quarter last year, compared with NT$3.84 billion in the same period of 2019. On a quarterly basis, net profit jumped 171 percent from NT$9.11 billion, UMC said yesterday.
For the full year of last year, net profit expanded 200 percent to NT$29.19 billion, from NT$9.71 billion. That translated into earnings per share of NT$2.42 last year, up from NT$0.82 in 2019.
Photo: Grace Hung, Taipei Times
Strong demand drove UMC’s factory utilization rate to 99 percent last quarter from 97 percent in the third quarter last year, the Hsinchu-based chipmaker told investors, adding that it expects the ratio to climb to 100 percent this quarter.
The firm can add a mere 3 percent more wafer capacity this year, primarily from 12-inch fabs, UMC copresident Jason Wang (王石) told a teleconference.
Demand for 8-inch wafers and some 12-inch wafers has outpaced capacity growth, Wang said.
The company said it expects 28-nanometer capacity to expand 20 percent this year, with revenue contribution climbing to about 25 percent from 14 percent last year.
UMC is open to new merger-and-acquisition opportunities to expand capacity, Wang said.
Asked about a shortage of auto chips, he said that UMC is “trying its best to mitigate the shortage.”
“We have been doing that since the beginning of this year,” he said. “Looking into the first quarter, stable demand will lead to an incremental increase in wafer shipments and blended average selling prices in US dollar terms.”
UMC said that it expects chip prices to increase by 2 to 3 percent from last quarter in US dollar terms, while wafer shipments are to grow at a quarterly pace of 2 percent.
As supply constraints are likely to last for the next few quarters, chip prices would rise by 4 to 6 percent this year, it said.
Gross margin would expand to 25 percent this quarter from 23.9 percent last quarter, on the back of price hikes, UMC said.
However, the appreciation of the New Taiwan dollar against the US dollar would offset more than half of the implied growth projected for the current quarter, Wang said.
UMC “continues to share the foundry industry’s positive view for wafer demand” for this year, Wang said, adding that the company plans to spend US$1.5 billion on new equipment this year, up 50 percent from US$1 billion last year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts