United Microelectronics Corp (UMC, 聯電), the world's No.3 foundry service provider, forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies.
However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday.
“Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not seen market demand change in the very near term,” Liu said. “Some customers are sidelined and want to take some precautionary action, but there are some customers doing the opposite. So the net-net impact for the second quarter is very limited.”
Photo: Grace Hung, Taipei Times
UMC did receive customers’ requests to accelerate its new 12-nanometer capacity expansion in collaboration with Intel Corp, as the tariff environment and escalating geopolitical tensions led to increasing reshoring interest, Liu said.
“I think most of the customers want to see the 12-nanometer solution as early as possible. They also have a very aggressive product launch time, and hope our 12-nanometer solution can catch up with their product roadmaps,” Liu said.
Since UMC has set an aggressive timeline for the US capacity expansion, “we are on track with our planned schedule,” he said, meaning that UMC would ramp up 12-nanometer chip production in 2027 at Intel’s manufacturing facility in Arizona.
However, the company refuted speculation that it was in talks with GlobalFoundries Inc to form a joint venture to avoid the US’ semiconductor tariffs.
“There’s no ongoing so-called merger activity right now,” Liu said. “But it doesn’t have to be mergers. There are many other collaborations we can still pursue to enhance shareholders’ value and returns.”
UMC yesterday reported its lowest profit in about 19 quarters, as net profit last quarter declined 8.5 percent quarterly and 25.6 percent annually to NT$7.78 billion (US$239.4 million). Earnings per share sank to NT$0.62 from NT$0.68 in the prior quarter and NT$0.84 a year earlier.
The company expects gross margin this quarter to bounce back to about 30 percent, compared with 26.7 percent last quarter, without the impact of one-time pricing reductions that usually happen at the beginning of a year.
The growing demand for chips used in communications, computers and consumer electronics is expected to drive up the factory utilization rate this quarter, compared with 69 percent last quarter, UMC said, although it remains conservative about demand for chips for cars and industrial devices, given excessive inventory.
For the whole of this year, UMC said it would grow its revenue by more than 3 percent, outpacing a low-single-digit percentage increase for the world foundry sector.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
Taiwan Power Co (Taipower, 台電) yesterday said it plans to resume operations at two coal-fired power generators for three months to boost security of electricity supply as liquefied natural gas (LNG) supply risks are running high due to the Middle East conflict. The two coal-fired power generators are at Mailiao Power Plant in Yunlin County’s Mailiao Township (麥寮). The plant, operated by Formosa Plastics Group (台塑集團), supplied electricity to Taipower’s power grid until the end of last year. Taipower’s decision came about one month after Minister of Economic Affairs Kung Ming-hsin (龔明鑫) on March 10 said that the nation had no imminent
Some robotaxi passengers were left stranded in the middle of fast-moving traffic in a major Chinese city after their driverless vehicles stopped running, according to police and media reports on Wednesday. A preliminary investigation indicates more than 100 robotaxis came to a halt because of a “system malfunction,” police in the city of Wuhan said in a statement, without elaborating. No injuries were reported. One passenger told Chinese media that their robotaxi stopped after turning a corner. An instruction on a screen read: “Driving system malfunction. Staff are expected to arrive in 5 minutes.” After no one showed up, the passenger pushed
RSS