UMC loss doubles as sales halve
Not too optimistic
UMC saw profit turn to loss during its most recently completed quarter - its third - as sales fell by nearly 60 per cent to NT$11.96 billion ($346 million).
For the three months to 30 September, UMC lost NT$4.02 billion (NT$0.30 a share), well down on the NT$14.6 billion (NT$1.31 a share) it earned this time last year. It's also more the double the NT$1.9 billion loss it posted for Q2.
UMC is the world's second-largest chip foundry, behind TSMC. Its rival posted income up nearly 300 per cent quarter-on-quarter, so UMC has clearly some way to go to catch up.
Looking ahead, UMC said it anticipates a ten per cent sequential increase in sales this quarter on the back of growing "consumer electronics and PC orders", according to company deputy chairman John Hsuan. But that's unlikely to prevent the company turning in another loss, we'd say, particularly since "wireless and wire-line orders show no sign of increasing", in Hsuan's words. Certainly for the full year, UMC expects to lose NT$3.2 billion on revenue of NT$63.5 billion.
UMC will cut capital spending even further next year, reducing its budget for plant from $1.5 billion to $1.1 billion, both well below the $2.8 billion it originally intended to spend. ®