Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (50147)	8/3/2001 8:56:45 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

UMC to Shift from 8-Inch to 12-Inch Wafer Production August 3, 2001 (TAIPEI) -- Against the background of the continuing slump in the global semiconductor industry, Chairman Robert Tsao of United Microelectronics Corp. announced worse-than-expected, first-half results after the closing of the July 31 stock market session. Tsao expected continuing high stockpiles of chip-related products and dwindling orders from long-term clients to force the company to downwardly adjust its capacity utilization in the third quarter to around 30 percent, from just below 40 percent in the second quarter. He thus forecast the situation would lead to a further narrowing of third-quarter revenues, which he expected to be down 15 percent to 20 percent compared to the previous quarter. In accordance with drastic market change and the remaining pessimistic market forecast, Tsao announced the company had decided to slash its eight-inch wafer foundry scale by one third in the following eight months, and concentrate the company's efforts in expanding its 12-inch capacity. He said he believes that the more sophisticated technology wafer processing will be the winning point in the industry once it recovers. Though Tsao did not make it clear whether the company will move its idle 8-inch facilities, estimated at 80,000 pieces wafer production monthly, local industry observers believe that China will be its destination. UMC has been closely managing investment affairs regarding China in the past months, and is believed to have been associating with Hon Hai as a strategic partner for vertical integration production in China. It is also widely believed that Hon Hai would be in the market to buy UMC's 8-inch wafer production facilities. As far as the foundry industry's medium-term and long-term prospects are concerned, Tsao was cautious, saying that the industry might not experience a market recovery before 2003. Tsao announced in the briefing that the company registered a NT$3.53 billion loss in both business and non-business performance in the second quarter, though its losses narrowed to NT$1.854 billion after the tax rebate. Accumulated after-tax profits are expected to be NT$0.4 per share, continuing to lag behind the NT$0.51 per share achieved by Taiwan Semiconductor Manufacturing Co., Ltd. Despite its sagging business performance, Tsao disclosed that UMC remained cash-abundant, with some NT$50 billion in cash and cash-equivalent assets in hand. On the assumption that the corporation will continue to receive income of around NT$1 billion per month, its debt ratio is expected to continue to slide down under 30 percent in the following months, showing that it remains financially healthy. Related story: UMC Suffers Heavy Losses in Q2 (Commercial Times, Taiwan)