SAN FRANCISCO—Taiwanese semiconductor foundry United Microelectronics Corp. Wednesday (Oct. 31) reported third quarter sales in line with analysts' expectations, but said it expects wafer shipments to decline in the fourth quarter due to excess inventory in the supply chain.
UMC's reported its third quarter results days after its larger rival, Taiwan Semiconductor Manufacturing Co. Ltd., surprised analysts by reporting record third quarter sales and profit.
UMC (Hsinchu, Taiwan) reported third quarter sales of NT$28.53 billion (about $973.2 million), up 3 percent from the previous quarter and up 13 percent from the third quarter of 2011. The company reported a net income of NT$2.42 billion (about $82.46 million) down 19 percent from the second quarter and up 24 percent compared with the third quarter of 2011.
UMC's third quarter sales were mostly in line with consensus analysts' expectations and the company's own sales target for the quarter.
For the fourth quarter, UMC said it expects wafer shipments to decline by 8 percent as customers burn off excess inventory. The company expects the inventory glut to continue into next year.
"The momentum of the demand recovery in 2013 will be determined by macroeconomic conditions, end demand strength and the transition progress for new products entering the market," said Shih-Wei Sun, CEO of UMC, in a statement.
UMC said its capacity utilization rate in the third quarter held steady at 84 percent, flat with the second quarter. The company's planned $2 billion in capital expenditure in 2012 remain unchanged, the company said. The percentage of the company's revenue from 40-nm and below process geometries grew to 13 percent in the third quarter, up from 9 percent the previous quarter, UMC said.