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May 29, 2017

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UMC to see Q4 shipments decline by 7-9 percent

United Microelectronics Corp. (UMC), the world's second largest made-to-order chipmaker, yesterday forecast shipments would decline by 7 to 9 percent in the fourth quarter compared to the third.

The firm made the remarks during its quarterly investors' meeting yesterday, in which UMC announced third quarter sales of NT$28.53 billion, a rise of 3.3 percent quarter-on-quarter and 13.3 percent year-on-year.

Gross profit margin for the July-September period was 24 percent, with an operating profit margin of 12.7 percent. Net profit was NT$2.42 billion, or earnings per share of NT$0.19. The earnings figures were in line with the firm's own prediction.

For the first three quarters, sales totaled NT$79.91 billion, a decline of 1.9 percent from the same period last year. Gross profit margin was 22.7 percent. Net profit was NT$6.742 billion, a decline of 30 percent year-on-year and translating into earnings per share of NT$0.53.

Sun Shih-wei, chief executive of UMC, said that the global semiconductor industry is in the middle of an inventory adjustment period, which would cause the firm's capacity utilization to decline from the third quarter's 84 percent to between 75 percent and 79 percent in the fourth.

Shipments, meanwhile, are expected to decline by 7 to 9 percent in the current quarter. Yet with an increase in products made with advanced technologies, the average sales price would increase by 2 percent from the third quarter. Together these factors will combine to lower fourth quarter sales by 6 to 8 percent compared to the third, Sun said.

Gross profit margin for October to December would fall to between 17 and 19 percent, he said.

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