Taiwan chipmaker UMC cautiously optimistic for this year, ups capex

United Microelectronics

31/01/2024 10:34

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      UMC says 'cautiously optimistic' about this year
    

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      Q4 revenue -19% y/y, -3.7% q/q
    

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      2024 capex guidance $3.3 bln vs 2023 capex $3 bln
    

  
       TAIPEI, Jan 31 (Reuters) - Taiwanese chipmaker United
Microelectronics Corp (UMC) said on Wednesday it was "cautiously
optimistic" for demand this year even with macroeconomic
uncertainty, as it increased capital spending by 10% compared
with 2023.
    The semiconductor industry has come under pressure as global
economic woes dent demand for chips used in everything from
tablets to cellphones and cars.
    On an earnings call, UMC  2303.TW   UMC.N  co-President
Jason Wang said they expected overall wafer demand in the first
quarter to "increase mildly".
    "We are cautiously optimistic about 2024. However,
visibility for 2024 is still relatively limited due to macro
uncertainties, consumer spending, higher interest rates,
inflationary pressures," he said.
    "Our primary focus for 2024 is to continue to enhance the
company's resilience to weather this market turbulence and then
embrace the market upturn."
    The company raised by 10% its capital spending for this year
to $3.3 billion, mostly for expansion plans in Singapore and
southern Taiwan's Tainan, compared with $3 billion for last
year.
    UMC last week announced a collaboration with IBM  IBM.N  to
develop a semiconductor process platform for relatively mature
12 nanometre technology with production in Arizona expected to
start in 2027.
    UMC's much bigger Taiwanese rival TSMC  2330.TW   TSM.N ,
the world's largest contract chipmaker, earlier this month gave
a bullish outlook on the back of the boom in artificial
intelligence (AI), sending global stock markets soaring.
    UMC focuses on maturer nodes, unlike TSMC which is investing
big in the most advanced 2 and 1 nanometre technology.
    UMC, whose clients include U.S. company Qualcomm Inc
 QCOM.O  and Germany's Infineon  IFXGn.DE , reported a 19%
year-on-year drop in fourth-quarter revenue to T$54.96 billion 
($1.76 billion), down 3.7% from the previous quarter.
    Wafer shipments fell 2.5% quarter on quarter, while capacity
utilisation edged down to 66% from 67%.
    UMC's Taipei-listed shares have slid 6.8% so far this year,
underperforming a 0.2% dip in the broader market  .TWII . They
closed down 1.2% on Wednesday before the earnings announcement.
    
    ($1 = 31.2730 Taiwan dollars)

 (Reporting by Ben Blanchard; editing by David Evans)
 ((ben.blanchard@thomsonreuters.com;))