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UMC's Q1 revenues rise by 20%

Posted: 02 May 2006     Print Version  Bookmark and Share

Keywords:Peter Clarke  United Microelectronics Corp.  UMC  revenue  Nvidia 

Revenues United Microelectronics Corp. (UMC) climbed 20 per cent year-on-year to about Rs.2,729.75 ($610 million) and made an operational profit of about Rs.9.40 crore ($2.1 million) in the company's Q1 financial results, which were widely interpreted to indicate a return to form.

Chip orders from a "graphic chip customer" thought to be NVidia Corp., that are due to begin being fulfilled in Q2 boosted analysts' impressions of the results and UMC's disposal of shares in an investment company worth about Rs.1476.75 crore ($330 million) provided a massive kicker to an otherwise marginal net profit.

UMC chairman and CEO Jackson Hu said that with good forward visibility he expected the Q2 to produce double-digit percentage revenue growth and a large improvement in profitability.

Ironically, despite the good impression of the results and high demand for foundry services, the results showed manufacturing capacity utilisation at UMC dipped in Q1, to 79 per cent from 86 per cent in the previous quarter as wafer shipments declined from 810,000 8-inch equivalents to 754,000 8-inch equivalents.

The company's net income was about Rs.1,364.88 crore ($305 million) on revenue of about Rs.2.729.75 crore ($610 million) in Q1 of 2006. The operational income was about Rs.9.40 crore ($2.1 million) and made about Rs.1,588.63 crore ($355 million) on the disposal of assets. These included gains from the sale of Hsun Chieh Investments Corp. and MediaTek shares amounting to about Rs.1,476.75 crore ($330 million) and about Rs.62.65 crore ($14 million) respectively.

"Demand in Q1 was very close to our original expectations," Hu said in a statement. "In fact, it was even slightly better. Our performance in the quarter was at the upper range of our guidance, with revenue reaching NT Rs.1,09,190 crore ($24.4 billion) and profitability beating our earlier projections."

He added, "We are also seeing strong demand for 65nm technologies, and are progressing smoothly in the roll-out of this process. UMC led all foundries with the delivery of its first 65nm customer product back into June 2005. We are currently producing these 65nm chips at Fab 12A in small volume quantities and expect to receive eleven product tape-outs from eight customers by the end of this summer."

- Mark LaPedus
EE Times

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