TAIPEI, Taiwan -- Silicon foundry giant United Microelectronics Corp. today reported a 20.3% sequential drop in net sales to NT$11.96 billion ($347 million) in the third quarter compared to NT$15.08 billion ($444 million) in Q2. UMC ended up with a net loss of ($118 million) in the period, ended Sept. 30.
"This was another challenging quarter for UMC and the entire semiconductor sector, during which we saw our capacity utilization down to an historical low of 36%," said Peter Chang, vice chairman of the world's second largest pure-play silicon foundry supplier. "On the positive side, we believe that this was the bottom for us in 2001 and expect to see a quarter-over-quarter improvement in sales in the fourth quarter."
But in response to the severe slowdown, UMC today said it was cutting capital spending in 2001 to $1.1 billion from the previously announced $1.5 billion budget. The majority of the expenditures are being used for 300-mm wafer tools and advanced copper process modules for 200-mm fabs. About 83%, or $891 million, of the revised capital spending budget has been spent in the first three quarters, said the company.
UMC's loss comes at a time when other foundry suppliers are also struggling with the downturn. In Singapore, Chartered Semiconductor Manufacturing Pte. Ltd. last week reported a net loss of $118.3 million in the third quarter after sales dropped more than expected (21% sequentially from Q2) to $79.2 million.(see Oct. 22 story).
However, the world's largest silicon foundry--Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC)--reported sequential 2% growth in the third quarter and an improved net income of NT$1.24 billion ($36 million) from NT$312 million in Q2. TSMC said it was expecting 15% growth in Q4 from the third quarter, and its fab utilization was at 41% in the just-ended quarter (see Oct. 26 story).
Compared to the third quarter last year, UMC's net sales were down 59.4% from NT$29.48 billion ($867 million) in Q3 2000. UMC had a net income of $14.56 billion ($428 million).
But UMC officials believe the company has weathered the worst of the downturn. "Even in the worst quarter, our financial position continues to be particularly strong. Cash inflows from operations was NT$5 billion $147 million with NT$50 billion $1.47 billion cash on hand on Sept. 30," said UMC vice chairman Chang.
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