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UMC expects more growth in Q3

Posted: 04 Aug 2006 ?? ?Print Version ?Bookmark and Share

Keywords:United Microelectronics? wafer? foundry? XX? XX?

Foundry United Microelectronics Corp. reported a solidly profitably second quarter and predicted more of the same in Q3 with wafer shipments expected to be flat to 2 percent up and average selling prices expected to jump between 6 percent and 8 percent.

However, UMC predicted that its manufacturing capacity utilization would continue to hover at 80 percent, the level it reached in the second quarter, and said it had seen signs of inventory build-up.

UMC's revenue for 2Q 2006 was about $780 million , representing a 5.6 percent sequential increase from $740 million in 1Q 2006, and a 32.4 percent year-on-year increase from about $590 million in 2Q 2005. UMC's net income was around $185 million in 2Q, compared with net income of about $375 million the previous quarter.

"The results for Q2 were basically in line with our earlier forecast," said Jackson Hu, chairman and CEO of UMC, in a statement. "ASP increased by 1 percent, while wafer shipments increased by 4 percent. We are also happy to report that gross profit margin grew by 7 percent, with operating profit improving by 6 percent. Our gross profit and margins came in higher than we expected. This was primarily due to a higher number of shipments of leading-edge 90nm and 0.13m chips," he added.

"For the third quarter, we are expecting more than 20 percent of our revenue to come from 90nm sales. The utilization at our two 300mm fabs is also expected to improve significantly. Thus, we anticipate a steady growth in revenues and profitability for Q3. The 65nm technology node is progressing smoothly and is in the roll out stage. We believe UMC's success at 65nm and 90nm will accelerate our growth and improve profitability in the coming years," Hu said.

- Peter Clarke
EE Times

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