Taiwan's United Micro: 3Q Utilization Rate Close To 80%
Wednesday July 30, 2:26 am ET
TAIPEI -(Dow Jones)- United Microelectronics Corp. said Wednesday its average selling prices would likely be steady to higher in the current quarter compared with the April-June period.
The utilization rate, the firm added, would likely be close to 80%, a fall from 85% in the second quarter.
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Wafer shipments in the third quarter are expected to fall "low to mid single- digit" percent on quarter, said Peter Chang, a vice chairman of the world's No. 2 foundry.
He added the operating profit margin in the third quarter would likely be close to double digits.
The comments came as UMC reported a 40% drop in its net profit for the second quarter to NT$2.69 billion (US$1=NT$34.380).
Chang said revenue in the third quarter is expected to post a similar-sized fall on quarter to that of wafer shipments. Revenue in the second quarter totaled NT$21.71 billion.
He said the impact of the severe acute respiratory syndrome outbreak on the communications sector is continuing to pose problems for UMC in the third quarter. An inventory buildup of chips made for communication baseband equipment still needs to be worked out of the system, Chang said.
"SARS had the biggest impact on the communications sector, but we believe the consumer and computer segments will be comparatively better in the current quarter," said Chang.
UMC expects the communications sector to regain its health in the fourth quarter due to holiday sales.
Chang said UMC expects the consumer segment to show the strongest growth in the third quarter, adding that sales for digital video disc related products continue to be strong.
UMC makes chips for Taiwan's MediaTek Inc. , the world's largest designer of chips for optical drives such as DVD players.
UMC also expects strength in the computer segment to continue, indicated by strong demand for chips used in liquid crystal displays.
Analysts said the strong LCD monitor sales indicate Taiwan's Novatek Microelectronics Corp. , which designs chips for the LCD segment and uses UMC for manufacturing, will likely continue its strong performance through the current quarter.
Chang also said UMC expects chips produced using high-end manufacturing technology to account for 45% of revenue in the third quarter, up from 38% in the second.
UMC defines high-end technology as 0.18 microns or smaller.
A chips' transistor components and the spaces between them are measured in microns. The smaller they are and the closer they can be packed together, the more powerful the chip.
[Harry: The sequential down tick in utilization is worrisome, but the fact that utilization is still above 70 (the minimum level required to make money) is a big positive.] |
