SAN JOSE, Calif. -- Taiwan foundry provider United Microelectronics Corp. (UMC) saw its profits fall as the company cut its capital spending in 2008.
UMC said its sales hit NT$24 billion ($790 million) in the first quarter, down 13.1 percent from the previous period but up 4.2 percent from a year ago.
Net income was NT$206 million ($7 million) in the first quarter, down 84.8 percent from the previous period and down 85.9 percent from the like period a year ago.
UMC also plans to cut its capital spending. In 2008, capital spending is expected to range from $500-to-$700 million, down from $900 million in 2007.
Overall utilization rate for the first quarter was 73 percent. The compares to 86 percent in the previous quarter and 74 percent a year ago.
UMC (Hsinchu) said 807 thousand 8-inch equivalent wafers were shipped in the first quarter, which was a 12.4 percent decrease from the 921 thousand 8-inch equivalent wafers that were shipped in the previous quarter.
"Q1 has traditionally been a slow season for the foundry industry, and this past quarter was no different due to an inventory adjustment situation," said UMC Chairman and CEO Jackson Hu, in a statement.
For Q2, the picture is mixed. Wafer shipments are expected to increase by approximately 10 percent. But wafer ASPs will decrease by approximately 2 percentage points.
UMC's capacity utilization rate is expected to be approximately 80 percent in Q2. The communication segment is expected to the strongest followed by the
consumer and computer segments, according to UMC.