No UMC deal
UMC's Step-Up to Made-to-Order Processors Aimed at Profit Boost
05/01/01 09:20 PM
Source: Bloomberg News
URL: investor.cnet.com
Taipei, May 2 (Bloomberg) -- United Microelectronics Corp., the world's second-largest make-to-order chipmaker, said it will move up the chip chain to begin manufacturing processors, the ''brains'' of computers, in an effort to offset falling prices of less sophisticated integrated circuits.
''Processors would be the highest profit margin for us,'' said Alex Hinnawi, a UMC spokesman.
UMC on Monday said its first customer for processors, which are among the hardest chips to manufacture, will be Palo Alto, California-based Sun Microsystems Inc., one of the world's biggest makers of server computers that run corporate networks and Web sites.
''We're making central processors for Sun's workstations,'' Hinnawi said.
The shift in strategy comes as UMC struggles to boost profit amid slumping orders and prices. Net income in the first quarter of this year tumbled 13 percent from a year earlier to NT$6.5 billion ($197 million) as customers such as San Jose-based Xilinx Inc. pared orders.
Hinnawi denied a report on the Ctech Web site today that UMC also has a contract to make processors for Advanced Micro Devices Inc., the Sunnyvale, California-based second-largest maker of the brain chips, after Intel Corp.
UMC shares rose as much as NT$3.50, or 6.7 percent, in early trading. They've risen 15 percent this year, compared with a 13 percent gain in Taiwan's main TWSE Index. |
