UMC predicts 2001 loss, cuts sales forecast and plans reduction in 8-inch fabs
Semiconductor Business News
(10/05/01 09:20 a.m. EST)
TAIPEI, Taiwan --Silicon foundry supplier United Microelectronics Corp. today cut its forecast for 2001 revenues to NT$63.55 billion ($1.87 billion), a 39.5% drop from NT105.08 billion ($3.09 billion) last year. UMC also estimated a net loss of NT3.2 billion ($94 million) for the year as a result of the severe semiconductor downturn that's hitting the foundry segment hard in 2001.
The world's second largest pure-play silicon foundry company said it is maintaining its commitments and investments to leading-edge 300-mm wafer processing, but it was planning to reduce its 200-mm (8-inch) capacity by one third to cut costs. Wafer fab capacity utilization has dropped for the entire silicon foundry industry, and UMC has estimated that its plants are operating in the upper 30-percent range.
UMC today also announced it would close the company's Licensed Product Division (LPD) to protect itself from "the volatile memory market," and it will write off losses associated with this business in 2001.
While faced with weak demand for foundry services, UMC said it was still planning to increase R&D in leading-edge processes and 300-mm (12-inch) wafer technologies. The company said its R&D spending would increase 47% over last year to NT$8.75 billion ($257 million), or 14% of 2001 revenues.
UMC predicted that the bottom of the current slump would be reached in the third and fourth quarters. It said its Q3 revenues sequentially declining 15-to-20% from NT$15.0 billion ($441 million) in the second quarter. The estimated third-quarter decline would be less than the 36.4% drop in Q2 from Q1 (see July 31 story).
An update to UMC's outlook for the fourth quarter will be released on Oct. 30, when results are issued for the third quarter.
For the entire 2001 year, UMC said it expected to post an operating loss of NT$5.3 billion ($156 million), a pre-tax loss of NT$6.4 billion ($188 million), and a net loss of NT$3.2 billion ($94 million). In 2000, UMC posted a net income of $50.8 billion ($1.5 billion). |
