Taiwan UMC Earnings Impress, But Tough Times Ahead
By Dermot Doherty
Of DOW JONES NEWSWIRES
TAIPEI (Dow Jones)--Taiwanese chipmaker United Microelectronics Corp.
(Q.UME) Wednesday announced robust earnings growth for 2000, but warned the
going will get tougher in the months ahead amid an industry downturn.
Still, analysts say they expect UMC to weather the rough times better than
its more dominant arch-rival Taiwan Semiconductor Manufacturing Co. (TSM).
"UMC sent out a clear message that they won't underperform TSMC in this
downturn, which it did last time (in 1998)," said Liu Chitung, head of
regional technology research at UBS Warburg in Taipei.
Liu noted that UMC "had a smaller increase in capacity last year and has
more diverse (geographic) market exposure." That should enable the company
to partially stem any quarter-on-quarter sales decline during the first
three months of 2001.
UMC said net profit soared to NT$50.8 billion in 2000, up from NT$10.5
billion in 1999, translating into an earnings-per-share of NT$4.57.
The impressive growth came amid strong demand from the personal computer and
communications markets in the first half of 2000, as well as the
accelerating trend within the semiconductor industry towards outsourcing.
Last year's bottom line also got a boost from the inclusion of profits from
several affiliates that were amalgamated into UMC in early 2000.
Net profit during the fourth quarter of 2000, meanwhile, came in at NT$16.7
billion, a 15% increase over the NT$14.6 billion notched up during the
previous three-month period.
Significantly, the head of UMC's U.S. operations, Jim Kupek, said the
company expects to perform better than its competitors during the
January-March period.
"Overall (revenues) for foundries will be down 25% in the first quarter from
the fourth quarter (of 2000)," Kupek said. "But we think we'll do slightly
better than that."
UMC said sales growth during the first and second quarters will likely remain flat |
