United Microelectronics Corp.'s (UMC's) revenue of NT$11.9 billion (US$396.6 million) for May marked a new high, showing signs of brighter markets in Q2.
Industry executives estimate the company to see Q2 revenue rise 12-14% from the previous quarter and attain the gross margin goal of 25%. Based on the gross margin goal, industry executives put the company's Q2 earnings at NT$3.7-4 billion (US$123-133 million), more than double that in Q1.
The company has decided to pay shareholders dividend of NT$0.5 per share in cash from 2013 operations.
The company's production lines overall will be running close to 90% capacity throughout the second quarter, with 200mm wafer factories at full capacity, according to chief financial officer (CFO), C.T. Liu, who said the company's operation will continue improving in Q3.
Tight capacity is compelling the company to draw up expansion plan for its 200mm wafer fabs. Considering the expansion at its Taiwan factories unlikely due to limited space, the company has recently boosted output at its China subsidiary, the HeJian Technology (Suzhou) Co., Ltd., to around 50,000 silicon wafers a month from 44,000 wafers. Company executives say that UMC may add capacity through acquisitions.
In Q2, the company has sold out all of its 40nm process capacity mostly thanks to brisk orders from mobile chip vendors. In the meantime, it has landed contracts from Qualcomm Inc. and MediaTek Inc. for its 28nm process foundry service as result of its considerable improvement in defect-free output ratio of the advanced process.
While declining to comment on reports about Qualcomm's and MediaTek's contracts, Liu says that the company will end Q4 with 5% of its production on 28nm process, up from the current 1%.
Knowing Taiwan Semiconductor Manufacturing Co. (TSMC), world's No.1 pure silicon foundry, will migrate to 16nm FinFET process next year and vigorously boost its 20nm process capacity this year, UMC has decided to directly shift to 14nm FinFET process from 28nm process and begin pilot production on the latest process in H1, 2015. (KL)
Results and Forecast of UMC's Quarter Revenue and Earnings
|Financial item\ Quarter|| Q2/'13
|| Q2/'14 (f)
| Gross margin ratio (%)
| After-tax net income
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