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The
semiconductor industry has come under pressure as global
economic woes dent demand for chips used in everything from
tablets to cellphones and cars. UMC's bigger Taiwanese rival
TSMC, the world's largest contract chipmaker, said last week the
semiconductor industry could be poised for recovery, predicting
healthy growth for itself next year and a drop in industry
inventory levels. In an earnings release, UMC co-President Jason
Wang said it expected demand to gradually stabilize in the last
three months of the year.
"For the fourth quarter, with the recent rush orders from PC and
smartphones, we expect demand has gradually stabilised," he
said.
"However, customers still employ a cautious and conservative
approach in maintaining lean inventory levels, while automotive
business conditions appear challenging." However, the company
kept its guidance for capital spending this year at $3 billion,
compared with $2.7 billion for last year.
The second half of the year is traditionally when Taiwanese tech
firms are busiest filling orders ahead of the year-end holiday
season in Western markets. UMC, whose clients include U.S.
company Qualcomm Inc and Germany's Infineon, reported a 24.3%
year-on-year drop in third-quarter revenue to T$57.1 billion
($1.76 billion), though that was up 1.4% from the previous
quarter. Wafer shipments dipped 2.3% quarter-on-quarter, while
capacity utilisation edged down to 67% from 71% in the second
quarter. UMC's Taipei-listed shares have risen 20.5% so far this
year, outperforming a 15.7% jump in the broader market. They
closed up 1.6% on Wednesday before the earnings announcement.
($1 = 32.3560 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Jan Harvey)
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