United Microelectronics Corp (UMC) losses deepened in the third quarter, as fewer orders from its key communications customers muted demand for its advanced process technologies
The contract chip maker registered $149m in pre-tax losses in the third quarter, up 68% from the second quarter. After adding in a tax credit, UMC's loss decreased to $117m. The company said it expects to lose $93m for the entire year, which means it will be in the red again for the fourth quarter. However, the company does expect operational revenue to be positive.
UMC vice chairman Peter Chang said ongoing sluggishness in the semiconductor industry continues to hamper the company's sales, especially in communications chips, but he also noted that the worse was over. Sales are expected to grow by about 10% during the fourth quarter. Approximately 40%to possibly 45% of its manufacturing lines will operate, up from a record low of 36% in the third quarter.
As a sign of the times, the company intends to lower its capital expenditures this year, from $1.5bn to $1.1bn. It gave no firm indication of next year's budget. Last week, UMC's main rival - Taiwan Semiconductor Manufacturing Co - said it would reduce capital spending by "a considerable extent" from this year's $2.1bn.
In Singapore, Chartered Semiconductor Manufacturing, the world's third-largest foundry, lowered its capital budget once again to $550m from $700m. Both TSMC and Chartered posted pre-tax losses last week, although TSMC managed a $35m profit after a tax credit.
Although TSMC chairman Morris Chang was slightly upbeat about the first quarter of 2002, saying it should be no worse than the current quarter, UMC said it was too early to offer predictions.