UMC refuses to issue profit estimate
SUBTLE HINT: The company could not comment on any revision to the forecast, according to a spokesman, but added that `you can probably do the math'
BLOOMBERG
TAIPEI
United Microelectronics Corp (UMC, Áp¹q), the world's second-largest made-to-order chip producer, declined to discuss its 2001 profit estimate, after rival Taiwan Semiconductor Manufacturing Co (TSMC, ¥x¿n¹q) last week cut its full-year forecast by more than half.
"We can't comment until we do it," UMC spokesman Alex Hinnawi said of any revision to the forecast, "but you can probably do the math." In April, UMC predicted profit in 2001 would fall almost three-quarters from the previous year, to NT$13.3 billion (US$385 million). In the first six months, the company posted profit of NT$4.6 billion.
UMC reported a record NT$1.9 billion loss in the second quarter and said it expects earnings to deteriorate in the June through September quarter as sales and prices slumped.
"We expect the third quarter to be bottom," Hinnawi said.
UMC shares dived almost 7 percent to NT$25.10 yesterday. The shares have fallen 38 percent since the beginning of the year.
TSMC, the largest maker of chips for other companies, said it may show profit of NT$11 billion this year, down 57 percent from its April forecast. Its shares slid 3.6 percent to NT$45.
Taiwan's Securities and Futures Commission requires publicly traded companies to adjust their forecasts if they expect profit to miss the original estimate by more than 20 percent.
Worldwide sales of semiconductors fell 42 percent in August to US$10.5 billion as demand for chips used in products ranging from computers to mobile phones declined, the Semiconductor Industry Association said. September sales may also have declined, the group said.
Slumping sales are causing many companies to cut costs, by laying off staff, paring capital investment and shedding peripheral businesses.
UMC said it may be interested in buying chipmaking plants from some customers to hasten their shift to semiconductor design from semiconductor manufacturing.
"We're considering under certain circumstances helping customers make a transition," said Hinnawi, citing UMC Chairman Robert Tsao (±ä¿³¸Û). The Financial Times earlier reported the plan on its Web site.
UMC currently has two major types of customers: companies that only design chips and have UMC manufacture them, and companies that both design and make chips, contracting with UMC to produce chips beyond their own capacity. Hinnawi was referring to the latter group.
Cost of Sales Although such a move might increase sales for UMC, the cost of acquiring and operating additional plants wasn't outlined.
The move to nudge customers out of production altogether comes as clients such as Infineon Technologies AG and STMicroelectronics are cutting costs and firing workers to weather a slump in semiconductor sales.
Last week, Advanced Micro Devices Inc, which also contracts some chipmaking out to UMC, said it will close two older plants.
Instead, Intel Corp's main rival in computer processors will focus on its main business of specialty flash-memory chips and processors to boost profit.
It would be "quite natural" for UMC to buy chip plants from customers if the terms are favorable, the Financial Times reported, citing Tsao. |
