United Microelectronics Corp (UMC,
The company probably posted a loss of NT$2.3 billion (US$66 million), or NT$0.17 a share, compared with a net income of NT$6.5 billion, or NT$0.57, a year ago, according to analysts. Sales fell to NT$12.1 billion from NT$23.6 billion a year ago, according to monthly figures reported by the company.
UMC will report earnings on Monday after the close of the Taiwan stock market.
As demand for chips rebounds, UMC is increasing sales at a greater pace than Taiwan Semiconductor Manufacturing Co (TSMC,
"I plan to increase my stake in UMC," said Michael Ding (丁予嘉), who counts shares in the company among the US$457 million he helps manage at International Investment Trust Ltd (國際投信). "Now is a good time to accumulate the shares."
The company, which said in January it will start building a plant with Advanced Micro Devices Inc in Singapore, will supply computer processors to Intel Corp's biggest rival starting in the second quarter, six months ahead of schedule, investors and analysts said.
UMC will probably use as much as 65 percent of its capacity in the second quarter, compared with the current 45 percent, as orders increase from companies such as AMD and Texas Instruments Inc, the largest maker of chips used in mobile phones, analysts said.
UMC turned to a loss last year while TSMC stayed profitable and gained market share.
Sales in the global chip industry fell by a third to about US$138 billion last year.
UMC's first-quarter results will be boosted by income from stakes the company recently sold in units that design chips and make flat-panel displays, analysts said.
"A NT$0.15 earnings per share is possible in the second quarter if the company sells more shares," said Chris Hsieh, an analyst with ING Barings Securities Ltd.
The company, which earlier planned to sell unused production equipment, probably canceled the plan after orders improved and the Taiwan government intervened on concerns that the equipment would be sold to China, analysts said.
UMC is among about five chipmakers in the world that make 300mm wafers, which yield more chips than the standard 200mm wafers, reducing costs. Plants that make the dinner-plate-sized wafers cost as much as US$3.5 billion to build.
The company will win more orders this year as other chipmakers that can't afford the investment outsource more production, analysts said.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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