UMC Up in Q3, But Expects Q4 Slip
By Colleen Taylor -- EDN, October 25, 2006
United Microelectronics Corp. (UMC) may have painted a nice picture for its Q3 today, but the Taiwan-based foundry projected a bleaker Q4 in the process.
UMC posted Q3 sales of $842 million (27.85 billion new Taiwanese dollars), up 8.2 percent from Q2 and up 18.1 percent over Q3 2005.
The company reported net income of $260 million (8.59 billion TWD), up 42 percent from Q2 and up 296.9 percent from Q3 2005.
The company's Q3 gross profit was $204.5 million (6.81 billion TWD) or 24.5 percent of revenue, compared to Q2, when it posted gross profits that were 20.1 percent of revenue. Overall utilization rate for the quarter improved to 82 percent, up from 80 percent in the previous quarter and 78 percent a year ago.
The percentage of revenue from 90nm and below business increased to 21 percent in Q3, due to strong demand for communication components and PC graphic chips, the company said. The percentage of revenue from 0.13-micron and below was 46 percent in Q3, which was a large increase from 38 percent of sales in Q2.
Blended average selling price (ASP) in Q3 increased by 6 percent, mainly due, UMC said, to increased wafer shipments of 0.13-micron and below process technologies.
Looking ahead to Q4, UMC is projecting a slowdown of sorts. Wafer shipments are projected to decrease by 2 percent to 3 percent and wafer ASPs are expected to fall by 5 percent to 6 percent.
"For Q4, we do foresee some downward adjustment from certain advanced technology customers, mainly at the 0.13-micron technology node for the communication sector," UMC's chairman and CEO, Jackson Hu, said in a statement. "Conversely, in emerging markets such as China, the demand from other customers for handset and display driver applications is quite strong. This is likely due to an improvement in the inventory situation in those areas."
UMC's slow outlook for the upcoming quarter echoes forecasts expected from rival Taiwan Semiconductor Manufacturing Co. Ltd. , which one firm said this week is expected to announce a below-seasonal guidance for Q4.
UMC's cash based capex budget for 2006 remains unchanged at $1 billion.
