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UMC heralds 'turnaround'

Operating profit due in Q4 on rising prices

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UMC, the world's second largest chip foundry, today announced a "fairly significant turnaround" for its business as it posted its Q3 FY2005 financial performance results.

However, big sequential gains failed to mask the fact that the company's numbers were well down on the year-ago quarter.

Revenues for the three months to 30 September 2005 totalled TWD23.58bn ($701.4m), up 21.3 per cent on the previous quarter, but 31.8 per cent down on the TWD34.58bn ($1.03bn) it recorded for Q3 FY2004.

The most recently completed quarter's net income was TWD2.17bn ($64.6m), up 624.1 per cent sequentially, but still well below Q3 FY2004's TWD10.91bn ($324.5m). Earnings per share came to TWD0.12 (1.8 cents).

The foundry made an operating loss of TWD560m ($16.7m).

UMC shipped 741,000 200mm-equivalent wafers in Q3, 17.6 per cent more than it did in Q2. In Q3 FY2004 it shipped 791,000. The company's blended ASP was up two per cent, in line with its previous guidance but hardly the "rebound" that UMC characterised it as.

Looking ahead, UMC said it expects ASPs to continue to rise during Q4, but again only by a "low single-digit percentage". Wafer shipments will rise too, by a figure in the low teens. Revenue from the company's 90nm production lines will rise sequentially by a "high teens" percentage - in Q3, 90nm accounted for 14 per cent of revenue, up from nine per cent in Q2.

Capacity utilisation should hit 85 per cent, UMC said, up from 78 per cent in Q3 and 65 per cent in Q2.

Q4 should also see the foundry returning to operating profitability, UMC added. ®

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