Taiwan’s UMC gives bullish outlook on robust chip call for

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The signboard of United Microelectronics Corp (UMC) is observed in Xinchu, the south town of Taipei, Taiwan January 10, 2006. Taiwan on Monday indicted Robert Tsao, the previous chairman of the arena’s second-largest contract microchip maker UMC, for breach of accept as true with over UMC’s involvement with a microchip corporate in China. REUTERS/Richard Chung

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TAIPEI, April 27 (Reuters) – Taiwan chipmaker United Microelectronics Corp introduced a bullish outlook for this 12 months and subsequent on Wednesday, announcing it was once nonetheless having issues assembly buyer call for whilst notebooks and smartphones have been appearing some weak point.

UMC (2303.TW), whose shoppers come with Qualcomm Inc (QCOM.O) and Germany’s Infineon (IFXGn.DE), has like different chipmakers benefited from an international scarcity of semiconductors that experience crammed its order books.

Co-president Jason Wang informed an profits name that this 12 months it remained a problem to satisfy call for.

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Whilst the lockdown in Shanghai and its environs to regulate COVID-19 had had “some impact” on call for, general robust call for for auto chips, commercial servers and networking segments had offset softness in smartphones, be aware books and private computer systems, he added.

“For the whole 2022, it nonetheless stays a problem for us to satisfy the mixture call for from our shoppers,” Wang stated, as UMC reported a 34.7% on-year bounce in first-quarter income to T$63.42 billion ($2.16 billion).

“We’re nonetheless severely undersupplied to our shoppers.”

Gross benefit rose 19% quarter-on-quarter and 120% year-on-year to T$27.5 billion. Its gross margin was once 43.4%, and running margin 35.2%.

Higher competitor TSMC (2330.TW) has forecast an as much as 37% bounce in current-quarter gross sales and stated it expects chip capability to stay very tight this 12 months, amid an international crunch that has saved order books complete and allowed chipmakers to rate top class costs. learn extra

The dearth has pressured some automakers and electronics producers to chop manufacturing.

UMC stated in 2021 it could spend T$100 billion ($3.40 billion) over the following 3 years to amplify capability and would ensure provides and costs to its shoppers as a part of the plan. learn extra

Wang stated there have been issues within the provide chain, together with shortages of parts and labour, and kit delays, because of this some capability enlargement won’t come on-line as scheduled.

However, having a look forward to subsequent 12 months, he stated the corporate was once “comfy about our 2023 irrespective of the provision dynamics”.

Stocks of UMC have fallen about 32% up to now this 12 months, giving the company a marketplace worth of $18.9 billion. The inventory closed down 2.95% on Wednesday, when put next with a 2.1% drop for the benchmark index (.TWII).

($1 = 29.4140 Taiwan greenbacks)

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Reporting by way of Sarah Wu and Ben Blanchard; Enhancing by way of Kim Coghill

Our Requirements: The Thomson Reuters Accept as true with Ideas.

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