UMC Q1 net income drops 88%, sales down 5%

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 4/30/2007

Taipei, Taiwan-based semiconductor wafer foundry United Microelectronics Corp. (UMC) today reported to Taiwan Stock Exchange that sales for its Q1 ended March 31 were $671.8 million (22.4 billion Taiwan New Dollars) 5.4 percent lower than $709.8 million (23.6 billion TWD) in Q1 2006.

However, the foundry’s Q1 net income fell 88.1 percent to $43.8 million (1.5 billion TWD) from $368.9 million (12.3 billion TWD) in Q1 2006 – it’s lowest quarterly net income since Q2 2005.

News reports reminded that analysts had expected UMC to post weak Q1 results because its clients are still working to resolve the inventory oversupply issue that has impacted the industry.

UMC rival Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s top semiconductor foundry reported last week that its Q1 net profit dropped 42 percent from Q1 2006 as customers continued to clear inventories during a traditionally slow season.

UMC is scheduled to release further details on its Q1 results on May 2.