Taiwan's Utd Micro Warns Of Lower Cap Spending In '01 -FT
SINGAPORE (Dow Jones)--Taiwan's United Microelectronics (2303.TW), the world's second biggest "foundry" producer of made-to-order computer chips, expects capital expenditure this year to be nearly one-third less than previously forecast, underlining recent weakness in semiconductor demand, according to a report on the Financial Times Web site Thursday.
Peter Chang, United Microelectronic's chief operating officer, said Wednesday he expected 2001 capital expenditure to be about $2 billion, down from the forecast $2.9 billion and well below the 2000 figure of about $3.3 billion, according to the report.
However, Chang said in the report that UMC was well placed to prosper, despite a fall in orders for both chips used in personal computers and telecommunications equipment.
Shares in UMC and other chipmakers have been hard hit in recent weeks by weak demand caused by a downturn in the personal computer market and the failure of sales of mobile telephones and equipment to meet overheated expectations.
UMC had previously resisted cutting its capital expenditure plans since its status as a "pure-play foundry" - a chipmaker that specializes entirely in making integrated circuits to order - gives the Taiwanese chipmaker a wide mix of products and makes it relatively resistant to downturns.
The Financial Times quoted Chairman John Hsuan as saying UMC hadn't scrapped any capital expenditure but would delay by up to nine months spending on expansion and upgrading of fabrication plants processing eight-inch silicon wafers.
Chang said UMC considered the current semiconductor downturn "very positive" in the longer term, since many integrated electronics companies would be increasingly reluctant to shoulder the huge risk of investment in advanced 12-inch fabrication plants, or fabs, according to the report.
UMC has yet to release detailed forecasts for 2001, but Hsuan said the company's performance in the year to date was in line with its prediction last year that first quarter sales were likely to be down 10-15% compared with the fourth quarter of 2000, but up 40% year-on-year.
UMC announced this week that December sales hit NT$10.27 billion ($1=NT$32.605), bringing total revenues for the year to NT$105bn. |
