UMC to sell off chip kit after Q2 loss

And decides to sue journalists

United Microelectronics Corp (UMC) has posted net losses of NT$1.9 billion ($46.1 million) for Q2 and warned of choppier waters ahead.

Losses at the Taiwanese chipmaker compared to a NT$12.1 billion profit for the same period in 2000. Sales dropped 39 per cent to NT$15 billion.

UMC also said it would sell chip-making equipment with an output of around 80,000 eight-inch wafers per month - or a third of its eight-inch wafer capacity.

It will concentrate on 12-inch silicon wafers.

It said conditions were likely to get worse before rebounding at the end of the year, and forecast a sales drop of between 15 per cent and 20 per cent from the second quarter. Net losses are also expected to widen.

Meanwhile, the company is to sue two journalists after accusing them of spreading false rumours about layoffs.

The Taiwanese chipmaker claims the duo from The Economic Daily News deliberately put false information in articles to affect the company's shareprice, Reuters reports.

It has filed a criminal suit with the Taipei district prosecutor's office and cited: "a series of maliciously fabricated and false reports of so-called major layoffs at this company".

The articles appeared on July 17 and 18, and stated that the company planned to reduce its workforce by between 500 and 1,000 employees. They quoted unnamed UMC sources.

Whereas contract chipmaker UMC confirmed it had cut 266 staff this month, it denied set plans to lay off the other 500 to 1,000 workers. ®

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