UMC warns it will post a loss for 2001
By Faith Hung
EBN
(10/05/01, 10:17:58 AM EST)
HSINCHU, Taiwan -- United Microelectronics Corp. today said it expects to post a loss for the year as the worldwide IC industry extends its slump.
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Weakness in the global communication market has been the primary reason leading to the downward revision of our financial forecast,” the Hsinchu-based company said in a released statement. “Not only has volume demand from our communication customers shown a significant decline, ASP [average selling price] per wafer is also under pressure given that communication customers are the key clientele for our leading-edge capacity.”
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As a result of its anticipated loss, UMC said it is planning to slash its 8-in.-wafer fab capacity by one third to counter what it said was slow demand and idle capacity. 'The company is also closing its Licensed Product Division (LPD), where the company made memory chips, in a move to protect it from the volatile memory market.
In an effort to cut costs and keep its market position, UMC is focusing on the deployment of deep sub-micron processes and the most advanced 300mm manufacturing platform. The foundry sees its R&D expenses rising 47% this year to $253.6 million, or 14% of the revised sales forecast.
TSMC will also remain focused on the 300mm platform. Its Fab 12 is running test production on 0.15-micron process technology, and is slated to have an installed capacity of 4,500 wafers per month in the fourth quarter. The shell of another 300mm fab facility is nearly complete, but plans to equip the plant have been delayed due to poor demand.
Only about 40% of TSMC's production lines are running, while UMC has idled all but 35% of its production capacity. <.b>Chartered Semiconductor Manufacturing Ltd., a rival foundry based in Singpaore, is only running at about 20% of production capacity, according to analysts.
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