UMC's Aug. Revenue Hits 20-Month High

Sep 10, 2012 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken Liu, CENS
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Taipei, Sept. 10, 2012 (CENS)--United Microelectronics Corp. (UMC) recently announced it raked in revenue of NT$9.79 billion (US$326.6 million at US$1:NT$30) in August, hitting a 20-month high and increasing 1.9% from a month earlier and 19.5% year on year.

The August result top industry executives' expectations and represented a third month-on-month increase in a row this year. Nevertheless, the company's Jan.-Aug. revenue of NT$70.79 billion (US$2.35 billion) represented a 3.4% decrease from the same period last year although the contraction rate sharply shrank from previous annual rate.

The company had revenue of NT$27.6 billion (US$920 million) in the second quarter, and estimated its wafer shipments and average selling prices for the third quarter would slightly increase from the second quarter.

Industry executives pointed out that the company's revenue for the third quarter would be able to rise by over of 5% from the second quarter as long as its revenue for September can stay above NT$9.7 billion (US$323.3 million). They made the estimate based on the company's total revenue of NT$19.4 billion (US$637 million) for July and August.

Based on the announced results, industry executives estimated that UMC's gross profit margin for the third quarter is likely to stand between 25% and 26% and its capacity utilization rate would rise above 85%.

Industry executives ascribed the company's revenue increase in recent months mostly to rush orders from customers. They pointed out that consumer-premise equipment suppliers ramped up rush orders in August for fear that they might be out of stock in the upcoming high seasons, a contrast to their hesitancy to place orders in July.

UMC's 300mm fabs have recently received increased orders for 28nm and 40/45nm process foundry service from prime customers, including Qualcomm, MediaTek and Texas Instruments (TI).

UMC executives pointed out that the company's revenue from 40nm process sales will increase to account for 15% of the company's total revenue in the third quarter, up from the second-quarter's 9%. The surge rate exceeds the company's original expectation.
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