Taiwan chipmaker UMC says some happy to use China capacity others shun

United Microelectronics

26/04/2023 12:09

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      Some customers taking advantage of shift away from China
    

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      Q1 revenue -14.5% y/y, -20.1% q/q
    

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      2023 will be a 'challenging year
    

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      2023 capex guidance unchanged at $3 bln
    

  
    By Sarah Wu and Ben Blanchard
       TAIPEI, April 26 (Reuters) - A shift away from
made-in-China chips amid Sino-U.S. tensions has opened up
capacity that some customers are happy to use, Taiwanese
chipmaker United Microelectronics Corp (UMC) said on Wednesday.
    Many Western companies are reviewing their supply chains and
reliance on China as a manufacturing base, with Washington
stepping up curbs in particular aimed at hobbling Beijing's chip
ambitions and slowing its technological and military advances.
    Asked on an earnings call about U.S. and European chip
designers shifting orders away from Chinese factories, UMC
 2303.TW  UMC.N  co-President Jason Wang said their customers
were starting to "evaluate their supply chain resilience".
    UMC could benefit from that, given the company makes chips
in Taiwan, China, Singapore and Japan, Wang added. 
        "We are seeing some customers are moving products to
other locations outside of China, but at the same time we also
see some customers asking to take advantage of the China gap
that creates," he said, without naming the companies.
    Global tech demand has slumped in recent months as soaring
inflation, rising interest rates and a gloomy world economic
outlook have led consumers and businesses to tighten spending.
    UMC  2303.TW  UMC.N , whose clients include U.S. company
Qualcomm Inc  QCOM.O  and Germany's Infineon  IFXGn.DE ,
reported a 14.5% year-on-year fall in first-quarter revenue to
T$54.2 billion ($1.77 billion), down 20.1% from the previous
quarter with wafer shipments dropping 17.5% quarter-on-quarter.
    "2023 will be a challenging year," Wang said. "The recovery
will be much slower than we anticipated."
    However, the company kept its guidance for capital spending
this year of $3 billion, compared with $2.7 billion for last
year, and said it saw strong demand from automotive chips driven
by electric vehicles and autonomous driving.
    Bigger Taiwanese rival TSMC  2330.TW   TSM.N , the world's
largest contract chipmaker, last week reported a surprise 2%
rise in first-quarter profit but forecast a 16% plunge in sales
for the second quarter amid an inventory glut and as a weakening
global economy has clouded the demand outlook.
    ($1 = 30.6960 Taiwan dollars)

 (Reporting by Sarah Wu and Ben Blanchard
Editing by Bernadette Baum)
 ((ben.blanchard@thomsonreuters.com;))