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September 27, 2017

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UMC reports record-high revenues for last month

TAIPEI, Taiwan -- United Microelectronic Co. (UMC, 聯電) yesterday held its shareholders' meeting, announcing the approval of a NT$0.5 cash dividend payout for fiscal year 2013 while expressing an upbeat outlook for the third quarter on account of strong performance over May.

The company in May garnered revenue growth of 3.48 percent month-by-month, reaching the historic high of NT$11.93 billion while improving by 9.82 percent year-on-year. In the fourth quarter of last year, the company accumulated revenues of NT$30.718 billion, down 8 percent quarter-on-quarter. The company noted that the NT$0.5 cash dividend payout represents a 3-percent rating in stock dividend yield.

In addition, the company yesterday announced that its board of directors have approved plans to issue new shares through a private placement. The company specified that the next round of new issue shares will not exceed 1.269 billion shares, or 10 percent of total shares currently in circulation, while emphasizing that the subscription price for the new shares will not be set at below current market prices. The company stipulated that the private placement shares may not be sold or transferred by subscribers within three years, adding that as the cash positions are ample at UMC, the private placement shares will not be priced at the customary 15-percent discount. The private issue is primarily designed to facilitate strategic alliances and partnerships with ideal candidates and clients in the semiconductor sector.

According to the company, performance is expected to continue improving in the latter half of this year, as revenue contribution from its 28-nanometer fabrication plants climbs to 5 percent of overall sales in the fourth quarter. In addition, the company noted that capacity is expanding swiftly in its P4- and P5-phase facilities based in the Tainan Technology Industrial Park, adding that currently its 8-inch wafer facilities are straining near max capacity.

Meanwhile, in response to the concerns of shareholders' over the discouraging price performance of UMC shares in the market over the past 15 years, the company replied that its operations and financial conditions remain sound and it will continue to strive toward improving technical competency and performance results.

UMC to Jump from 28nm to 14nm fabrication

Most notably, the company indicated its intent to transition toward fabricating 14-nanometer chips from its 28-nanometer mainstay and bypass the 20-nanometer fabrication technology. Trial production runs for 14-nanometer are expected to take place in the first half of next year, said the company.

Meanwhile, CLSA Asia-Pacific Markets (里昂證卷) expressed a neutral stance toward UMC's favorable projections that revenue contributions from its 28-nanometer production will climb to 14 percent of overall sales before the end of next year, as the company is employing the less advanced PolySiOn fabrication technology, which is not as cost efficient as the HPC process employed by competitor TSMC.

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