United Microelectronics Corp (UMC, 聯電) expects revenue to remain stable this quarter amid slightly better-than-expected demand for its computer segment, bucking the usual seasonal downturn during the final quarter of the year, the company told an online investor conference on Wednesday.
That was based on UMC’s expectations that wafer shipments would remain flat this quarter. In addition, the average sales price would be unchanged this quarter, which it attributed to its optimized and differentiated technology offerings.
UMC’s revenue last quarter rose to NT$60.49 billion (US$1.89 billion), the strongest level in about seven quarters. Communication chips were the biggest revenue source, accounting for 42 percent of the chipmaker’s total sales last quarter. Consumer chips came next with a 31 percent share, while computer chips only made up 13 percent.
Photo: Grace Hung, Taipei Times
“With regards to the fourth-quarter outlook, we are seeing demand stabilizing across the end market and a clear downward trend in inventory levels,” UMC co-president Jason Wang (王石) said.
“For the fourth quarter, we expect the trend in the computing segment would be slightly better quarter-on-quarter than we originally expected. However, that would be offset by a mild decline in the communication and consumer segments,” Wang said.
Gross margin is to drop to about 30 percent this quarter, which would be the lowest in one-and-a-half years, down from 33.8 percent last quarter. UMC attributed the decline to higher depreciation costs on facilities and manufacturing equipment.
Depreciation costs are to swell 20 percent year-on-year this year, and the uptrend would extend into next year, UMC said.
When the depreciation costs start to wane and drop to the normal range after next year, the gross margin would rebound to 40 percent, Wang said.
UMC aims to keep its margin of earnings before interest, taxes, depreciation and amortization stable at about 42 or 43 percent, he said.
Lower equipment utilization is also a factor weighing down gross margin, which is to slide to 66 to 68 percent this quarter from 71 percent last quarter, due to a larger capacity base.
UMC on Wednesday trimmed its estimated capital spending for this year to US$3 billion from an earlier estimate of US$3.3 billion.
UMC said that its partnership with Intel Corp on developing 12-nanometer technology remains on track. The first 12-nanometer chip is to come out in 2026, the chipmaker said.
As for its progress in offering silicon interposers that are used in the older version of advanced chip-on-wafer-on-substrate packaging technology, Wang said UMC has doubled its interposer capacity to 6,000 wafers a month.
UMC has engaged with multiple customers to supply interposers next year and is in discussions with customers to increase supply, he said.
The company on Wednesday posted its best quarterly net profit since last year at NT$14.47 billion, up 5 percent sequentially from NT$13.79 billion. On an annual basis, net profit contracted 9.4 percent from NT$15.97 billion.
The revenue contribution from its 22-nanometer and 28-nanometer technology rose to 35 percent from 33 percent in the prior quarter.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS