Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday reported that net profit last quarter declined 30.8 percent from a year earlier due to challenging macroeconomic conditions, a prolonged inventory correction and slow demand dragging down factory utilization.
Net profit plunged to NT$13.2 billion (US$421.7 million) last quarter, compared with NT$19.07 billion a year earlier. On a sequential basis, net profit contracted 17.4 percent from NT$15.97 billion, it said.
Earnings per share (EPS) dropped to NT$1.06 last quarter from NT$1.54 a year earlier and NT$1.29 the previous quarter.
Photo: Lam Yik Fei, Bloomberg
For the full year, net profit fell 30.2 percent to NT$61.44 billion from NT$88.02 billion in 2022, with EPS plunging to NT$4.93 from NT$7.09.
“Overall, 2023 was a year in which UMC demonstrated its resilience in the face of a challenging external environment, as an optimal product mix continued to lift blended average selling price by a mid-single-digit percentage year-on-year,” UMC copresident Jason Wang (王石) said during an investors’ conference.
Revenue last year shrank 10 percent to NT$222.53 billion, but the company expects it to pick up by 10 percent this year, in line with the foundry sector’s projected growth pace, but faster than the overall semiconductor industry’s growth of a mid-single-digit percentage, it said.
Still, its revenue projection is slower than the 20 to 25 percent growth forecast by its bigger rival, Taiwan Semiconductor Manufacturing Co (台積電).
Wang attributed the difference to a flattish addressable market.
“We are cautiously optimistic about this year,” he said. “The visibility is limited by macro uncertainty. Also, we are seeing lingering inventory issues for the automotive and industrial segments, although inventories at PC and mobile phone fronts have returned to healthy levels in the fourth quarter of 2023.”
The improvement in supply chain inventories has not translated into actual orders and revenue yet, as customers remain “cautious about restocking,” he said.
UMC expects wafer shipments this quarter to rise 2 to 3 percent sequentially, but factory utilization is likely to drop to the low-60 percent range from 66 percent last quarter, it said.
Gross margin is expected to fall to about 30 percent this quarter from 32.4 percent last quarter, the company said.
The blended average selling price is forecast to slip to 5 percent sequentially, but should hold steady for the rest of the year, it said.
Following its announcement last week that it was teaming up with Intel Corp to offer 12-nanometer chips from 2027, the company yesterday said it expects to see meaningful revenue contribution from this business that year.
The company expects to have process-design-kit ready for customers next year and to begin pilot production in 2026, Wang said.
UMC and Intel are to share the development costs for this project, he said.
The partnership with Intel comes as UMC aims to pursue cost-efficient capacity expansion and technology node advancement, Wang said.
The effort would broaden UMC’s addressable market and significantly accelerate its development roadmap, he said.
UMC has raised its projected capital expenditure to US$3.3 billion this year from US$3 billion, with a big chunk of the money going into 22-nanometer and 28-nanometer process technology capacity expansion.
It added that 28-nanometer technology was the biggest revenue contributor last quarter, accounting for 36 percent.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
RSS