SAN FRANCISCO—Taiwanese foundry United Microelectronics Corp. (UMC) Wednesday (Oct. 26) reported double-digit sales declines in the third quarter on both a sequential and annual basis and said it expects capacity utilization to slip to below 70 percent in the fourth quarter, down from more than 90 percent at the beginning of the year.
UMC (Hsinchu, Taiwan) reported third quarter sales of NT$25.19 billion (about $835.2 million), down 10.5 percent from the previous quarter and down 22.9 percent from the third quarter of 2010. The company reported a net income of NT$1.95 billion (about $64.7 million), down 39 percent from the second quarter and down 78 percent from the third quarter of 2010.
UMC said it shipped 1.03 million 8-inch equivalent wafers in the third quarter, with average selling prices remaining flat compared with the second quarter. Overall capacity utilization slipped to 74 percent from 87 percent in the second quarter, UMC said, with 40 percent of the company's revenue coming from 65-nm and below.
UMC said it expects fourth quarter wafer shipments to decline about 10 percent compared with the third quarter. The company said it expects wafer average selling prices to increase by about 5 percent in the fourth quarter. UMC also expects capacity utilization to further decline to around 65 to 69 percent.
UMC's capacity utilization has steadily declined from a peak of more than 99 percent in the third quarter of 2010. In the first quarter of this year, the company reported capacity utilization of 90 percent.
Shih-Wei Sun, CEO of UMC, said the company expects the rate of its revenue declines to each in the fourth quarter. However, Sun said, UMC will proceed with caution amid continued semiconductor industry weakness and conservative order patterns among customers.
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