United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies.
However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday.
“Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not seen market demand change in the very near term,” Liu said. “Some customers are sidelined and want to take some precautionary action, but there are some customers doing the opposite. So the net-net impact for the second quarter is very limited.”
Photo: Grace Hung, Taipei Times
UMC did receive customers’ requests to accelerate its new 12-nanometer capacity expansion in collaboration with Intel Corp, as the tariff environment and escalating geopolitical tensions led to increasing reshoring interest, Liu said.
“I think most of the customers want to see the 12-nanometer solution as early as possible. They also have a very aggressive product launch time, and hope our 12-nanometer solution can catch up with their product roadmaps,” Liu said.
Since UMC has set an aggressive timeline for the US capacity expansion, “we are on track with our planned schedule,” he said, meaning that UMC would ramp up 12-nanometer chip production in 2027 at Intel’s manufacturing facility in Arizona.
However, the company refuted speculation that it was in talks with GlobalFoundries Inc to form a joint venture to avoid the US’ semiconductor tariffs.
“There’s no ongoing so-called merger activity right now,” Liu said. “But it doesn’t have to be mergers. There are many other collaborations we can still pursue to enhance shareholders’ value and returns.”
UMC yesterday reported its lowest profit in about 19 quarters, as net profit last quarter declined 8.5 percent quarterly and 25.6 percent annually to NT$7.78 billion (US$239.4 million). Earnings per share sank to NT$0.62 from NT$0.68 in the prior quarter and NT$0.84 a year earlier.
The company expects gross margin this quarter to bounce back to about 30 percent, compared with 26.7 percent last quarter, without the impact of one-time pricing reductions that usually happen at the beginning of a year.
The growing demand for chips used in communications, computers and consumer electronics is expected to drive up the factory utilization rate this quarter, compared with 69 percent last quarter, UMC said, although it remains conservative about demand for chips for cars and industrial devices, given excessive inventory.
For the whole of this year, UMC said it would grow its revenue by more than 3 percent, outpacing a low-single-digit percentage increase for the world foundry sector.
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