Taipei, Feb. 8, 2010 (CENS)--In anticipation that global market for foundry services would grow at an annual rate of 25-28% this year, United Microelectronics Corp. (UMC) said it will spend US$1.2-1.5 billion on capacity expansion this year to keep up with the recovery trend, more than double the amount it spent in 2009.

Last year, the company had total revenue of NT$88.6 billion (US$2.7 billion at US$1:NT$32), contracting 4.2% from a year earlier. The recession rate is the most moderate of all in the dry industry.

The company`s 2009 after-tax net income was NT$3.8 billion (US$121 million), or NT$0.31 per share, vaulting the company to profit zone from loss ground.

In the fourth quarter of 2009, the company saw its revenue rise 1.2% from the previous quarter to NT$27.7 billion (US$867 million), due mainly to robust orders for its 65/55-nanometer process capacities pushing up the average selling price (ASP). However, the firm`s gross profit margin declined to 25.9% as a result of the appreciation of the New Taiwan dollar against the U.S. dollar, which undermines profit of Taiwan`s U.S. dollar-denominated exports, and employee dividend pays.

UMC Chief Executive S.W. Sun estimated the company`s shipments of silicon wafers for the first quarter this year to stay on par with that of the previous quarter. Institutional investors projected the company`s revenue for this quarter to stand between NT$27 billion and NT$27.8 billion (between US$843.7 million and US$868.7 million) and capacity utilization rate for the same quarter to run at 86-89%.

In response to worries that the company`s capacity expansions might lead to over capacity, Sun said the company`s capital expenditure for this year is reasonable and inventories at retailers remain healthy now.

(by Ken Liu)