TAIPEI, Taiwan -- United Microelectronics Corp., the world's second largest silicon foundry company, posted a net loss of NT$1.9 billion ($53 million) on sharply lower net sales of NT$15.0 billion ($436 million) in the second quarter.
UMC's sales were 36.4% lower than NT$23.6 billion ($686 million) in the first quarter of 2001 and 38.6% below NT$24.4 billion ($709 million) in Q2 last year. A year ago, UMC posted a net income of NT$12.1 billion.
The foundry company told analysts in a conference call today that its capacity utilization is expected to be in the 30% range during the third quarter, but UMC officials believe Q3 will be the bottom of the current downturn. UMC's capacity utilization was around 45% in the second quarter.
UMC's largest rival--Taiwan Semiconductor Manufacturing Co. Ltd.--has predicted that its capacity utilization will drop to the upper-30 percent range in Q3 (see July 26 story). The third largest pure-play silicon foundry, Chartered Semiconductor Manufacturing Pte. Ltd. in Singapore, expects its fab utilization to running in the mid-20 percent range this quarter (see July 20 story).
"The second quarter results truly reflects the difficult condition the semiconductor industry as a whole is enduring," said Peter Chang, vice chairman of UMC. "In the course of this drastic down turn, UMC has been implementing cost cutting measures and pushing for aggressive technology development in order to maximize our profitability when the economic environment starts to improve."
While UMC is cutting back on expenses and employment, it is not backing off its plans for 300-mm fabrication capacity. The company said it continues to earmark $1.5 billion for capital expenditures in 2001 with a majority for 300-mm (12-inch) fabs and advanced copper-interconnect processes on 200-mm wafers.
UMC said its average selling price for processed wafers dropped 19% in the second quarter from the prior three-month period. In the quarter, ended June 30, UMC foundry fabs shipped 345,000 eigh-inch equivalent wafers, a 22% decline from 443,000 in the first quarter and a 45% drop from 629,000 in the fourth quarter of 2000. (The wafer volume does not include silicon processed by UMC's Nippon Foundry Inc. in Japan.)
The foundry supplier told analysts that it currently expects revenues to fall 15-to-20% in the third quarter from Q2. Sequential sales growth is expected to begin in the fourth quarter.