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UMC reports first loss in over ten years

Will get worse before it gets better

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Taiwanese chip foundry UMC saw profit turn into a massive loss during its most recently completed quarter, the second of its current fiscal year. And the company warned of worse to come.

UMC lost NT$1.85 billion ($53.36 million) - NT$0.16 a share - during Q2. Factor in profits and losses from various subsidiaries, a one-off inventory reduction charge of NT$1.57 billion, and the final bottom line loss balloons to NT$2.28 billion.

Looking ahead, UMC chairman Robert Tsao warned that Q3 will produce an even deeper loss, down 15-20 per cent on Q2's figure, as a slight recovery in prices will be more than offset by rising depreciation costs and a low utilisation rate among UMC's fabs.

Tsao said that sales should pick up during Q4, reining in the expanding loss, but with no real upturn anticipated through 2002, the company doesn't expect a return to 2000's level of output until 2003. ®

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