United Microelectronics Corp.’s sales see first rise in nine months amid chip upturn

Showing its confidence in rising chip demand for new computers, mobile phones and other consumer gadgets, United Microelectronics Corp. (UMC) has forecast third-quarter sales will grow by a fifth from the second quarter.

Another positive factor is a growing number of global integrated device manufacturers (IDMs) reluctant to invest in new factories, known in the industry as fabs, are increasingly outsourcing manufacturing to made-to-order chip foundries in Asia to cut costs, analysts say.

UMC and sector leader Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) mainly supply fabless chip designers and IDM customers, firms like Texas Instruments Inc. that own their own plants but are increasingly outsourcing production to focus on design and marketing.

UMC garnered sales of NT$10.053 billion last month, bringing total sales to NT$58.175 billion in the first seven months of the year, down 2 percent from the year-ago period, the Taiwan company said in a statement.

July sales rose from NT$9.202 billion in the same month a year ago and were 15 percent higher than June’s NT$8.745 billion.

“Judging from July’s sales, UMC should be on track to reach its third-quarter sales growth target,” said Nomura semiconductor analyst Rick Hsu, who has a “buy” rating on UMC.

In Taipei, investors piled into the two big foundries yesterday before UMC announced the sales results.

Shares of UMC closed 2.51 percent higher at NT$18.35 Wednesday, while those of TSMC, whose July sales are due out on Friday, gained 2.45 percent at NT$62.80, in line with the main TAIEX’s 2.68 percent gain.

TSMC has also sounded an upbeat note for the third quarter, the onset of annual peak manufacturing season for Taiwan’s tech exporters.

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