LONDON – Foundry chipmaker United Microelectronics Corp. (UMC) posted steady results in the fourth quarter, but the foundry vendor sees a slowdown in the first quarter of 2011 with both wafer shipments and average selling price (ASP) per wafer falling.
UMC (Hsinchu, Taiwan) said it made a net income of NT$6.42 billion (about $220.77 million) on fourth-quarter revenue of NT$31.32 billion (about $1.79 billion), down 4.1 percent sequentially from the third quarter of 2010 and up 12.9 percent on the same quarter a year before. The profit was down quarter-on-quarter but up by 46.1 percent on the year before quarter.
UMC's 2010 total revenue of NT$120,431 million (about $4.12 billion) was a record, up 35.9 percent on 2009. The annual net profit increased to NT$23,899 million (about $823 million) from NT$3,874 (about $133 million) in 2009.
In the fourth quarter revenue from 65-nm and below increased to 35 percent of total revenue, with 40-nm accounting for 5 percent of UMC's Q4 revenue contribution.
The overall utilization rate for the quarter was 94 percent, down from 99 percent in the previous quarter and 86 percent in 4Q10. Utilization fell despite the fact that wafer shipments decreased 5.8 percent sequentially to 1,132K in 4Q10, compared to 1,202K 8-inch equivalent wafers shipped in 3Q10. The blended average selling price (ASP) increased in US dollar terms during 4Q10, mainly due to product mix shifting to more advanced technology.
"After experiencing growth momentum for over a year and a half at UMC, we anticipate revenue for the first quarter of 2011 to decline slightly due to appreciation of NT dollar, certain customers undergoing product and technology-node transitions, and other seasonal adjustments. UMC is optimistic about demand for high-end chips this year, with revenue contribution from 40-nm growing quarterly in 2011 to become a main revenue driver. We will also begin 28-nm customer-product pilot around the middle of this year," said Shih-Wei Sun, CEO of UMC.
The company forecasts wafer shipments will decline sequentially by a low single-digit percentage but be compounded by a wafer ASP in U.S. dollars that will decline in the low-to-mid single-digit percentage.
Capacity utilization is set to stay at 90 percent and UMC expects the consumer sector to be relatively weaker than the computer and communication segments.
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