UMC Optimistic on Post-Christmas Demand
TAIPEI, Dec 21 (Reuters) - Taiwan's United Microelectronics Corp (UMC), the world's second
largest contract chipmaker, said on Friday it was cautiously optimistic demand could stay
strong in the months after Christmas - usually the industry's weakest season.
UMC vice chairman John Hsuan said component shipments to electronics firms were light in the weeks after
the September 11 attacks on the United States, and companies may need to replace depleted inventory.
"We hope that when Christmas is over and our customers check their inventories, they discover they need
major re-stocking," Hsuan told reporters on the sidelines of a technology seminar in Taipei. "I am personally
leaning towards a more optimistic view."
Sales in the electronics industry and its upstream semiconductor sector usually boom toward the end of the
year due to holiday demand, but taper off as the next year begins.
But with the microchip sector suffering its worst-ever year of decline in 2001 - market research firm Dataquest
estimates global semiconductor sales shrunk 33 percent in 2001 - the industry is watching to see if a recent
sales upturn is a seasonal blip or the beginning of a recovery.
Hsuan said consumer demand had been strong over the holiday season despite fears households would
keep a tight grip on pocketbooks after the September 11 attacks on the World Trade Center and Pentagon.
"In the past, if our clients had inventories after Christmas, we will find they were in no hurry to re-stock and they
all wanted to talk to you about prices," he said.
"We hope that this year the situation has changed and they have no inventories and they have no time to talk to
you about prices," Hsuan said. "Once they buy actively, our cost structure improves and prices are stable and
all this will be reflected on our profit margins."
On Friday, UMC's Taiwan-listed shares fell 5 percent to T$45.60 against a 3.76 percent drop in the benchmark
TAIEX index, but the issue remains nearly double its 52-week low of T$23.40 hit in early October.
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