UPDATE - UMC Dec sales surge amid corporate demand recovery
Friday January 9, 4:32 am ET
By Michael Kramer
(Adds analyst comment, details)
TAIPEI, Jan 9 (Reuters) - Taiwan's UMC (Taiwan:2303.TW - News), the world's second-largest contract microchip maker, reported a 52 percent jump in December sales on Friday as improving corporate demand added fuel to a rebound in the tech sector.
The results from United Microelectronics Corp (UMC) (NYSE:UMC - News) brought its fourth-quarter revenues to their highest since an all-time high three years ago -- just before the chip sector collapsed into its worst downturn on record in 2001.
The industry's recovery picked up speed in 2003 after a lacklustre 2002, largely due to demand for consumer products such as camera phones, but analysts say corporate spending on items like telecom and networking equipment is also rising.
"I think this reflects that end-product markets are really booming," said SinoPac Securities analyst Joyce Hsu. "I think that growth will continue into the first quarter."
UMC's main competitor, Taiwan Semiconductor Manufacturing Co (TSMC) (Taiwan:2330.TW - News; NYSE:TSM - News), posted record-high fourth-quarter sales on Thursday, helping lift Taiwan's TAIEX (Taiwan:^TWII - News) share index by 0.94 percent on Friday.
UMC, which reported December results after the close of trade, gained 1.28 percent to finish at T$31.6, while TSMC jumped 3.05 percent.
UMC said December revenues grew 52 percent to T$8.35 billion (US$250 million) from T$5.5 billion in the year-ago period, and were up from T$7.7 billion in November.
December's sales brought UMC's fourth-quarter revenues to T$23.7 billion, up 35.3 percent from a year earlier and a 10.1 percent rise from the July-September quarter, according to Reuters calculations.
Last year's revenues reached T$84.86 billion, a 25.86 percent rise from 2002, UMC figures showed.
"Communications is still the biggest sector and most of the sales are still cellular phone baseband chips, but products for networking and wireline telecom should certainly be included in there," Hsu said.
TSMC said its December sales rose two-thirds from the same period last year to T$18.97 billion, lifting both fourth-quarter and 2003 revenues to record highs.
Cisco Systems Inc (NasdaqNM:CSCO - News), the world's largest maker of gear that directs Internet traffic, had said in December customers were boosting their spending plans for 2004.
Indeed, shares in Nortel Networks (Toronto:NT.TO - News) and other telecom equipment firms jumped on Wednesday after the Canadian firm struck a deal with Verizon Communications (NYSE:VZ - News), the top U.S. phone company, to supply voice over Internet technology.
The deal has raised hopes that big telephone companies -- which helped to power TSMC and UMC's last boon in 2000 with aggressive network building -- are willing to spend money on technology again.
On the consumer side, mobile phone makers said they were running short of supplies as the global economy recovers and low-priced models fly off the shelves. (US$1 = T$33.8) |
