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.
EXPANSION: The investment came as ASE in July told investors it would accelerate capacity growth to mitigate supply issues, and would boost spending by 16 percent ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it is investing NT$17.6 billion (US$578.6 million) to build a new advanced chip packaging facility in Kaohsiung to cope with fast-growing demand from artificial intelligence (AI), high-performance-computing (HPC) and automotive applications. The new fab, called K18B, is to commence operation in the first quarter of 2028, offering chip-on-wafer-on-substrate (CoWoS) chip packaging and final testing services, ASE said in a statement. The fab is to create 2,000 new jobs upon its completion, ASE said. A wide spectrum of system-level chip packaging technologies would be available at
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
HEAVYWEIGHT: The TAIEX ended up 382.67 points, with about 280 of those points contributed by TSMC shares alone, which rose 2.56 percent to close at NT$1,400 Shares in Taiwan broke records at the end of yesterday’s session after contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a fresh closing-high amid enthusiasm toward artificial intelligence (AI) development, dealers said. The TAIEX ended up 382.67 points, or 1.45 percent, at the day’s high of 26,761.06. Turnover totaled NT$463.09 billion (US$15.22 billion). “The local main board has repeatedly hit new closing highs in the past few sessions as investors continued to embrace high hopes about AI applications, taking cues from a strong showing in shares of US-based AI chip designer Nvidia Corp,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su
Nvidia Corp’s major server production partner Hon Hai Precision Industry Co (鴻海精密) reported 10.99 percent year-on-year growth in quarterly sales, signaling healthy demand for artificial intelligence (AI) infrastructure. Revenue totaled NT$2.06 trillion (US$67.72 billion) in the last quarter, in line with analysts’ projections, a company statement said. On a quarterly basis, revenue was up 14.47 percent. Hon Hai’s businesses cover four primary product segments: cloud and networking, smart consumer electronics, computing, and components and other products. Last quarter, “cloud and networking products delivered strong growth, components and other products demonstrated significant growth, while smart consumer electronics and computing products slightly declined,” compared with the
RSS