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.
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