Taiwan chipmaker UMC sees 'uncertain' demand, gearing up for AI

United Microelectronics

26/07/2023 11:32

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      Wafer demand 'uncertain' in Q3
    

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      UMC says gearing up to meet AI demand
    

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      Q2 revenue -21.9% y/y, +3.8% q/q
    

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      2023 capex guidance unchanged at $3 bln
    

  
       TAIPEI, July 26 (Reuters) - Taiwanese chipmaker United
Microelectronics Corp (UMC) said on Wednesday that it sees
"uncertain" demand in the third quarter but stuck to its 2023
capital spending plans as its gears up to meet customer demand
for artificial intelligence (AI).
    The semiconductor industry has come under pressure as global
economic woes dent demand for chips used in everything from cars
to cellphones.
    UMC's bigger Taiwanese rival TSMC  2330.TW   TSM.N , the
world's largest contract chipmaker, last week forecast a drop of
around 10% in 2023 sales and flagged investment spending at the
low end of estimates.
    Speaking on an earnings call, UMC  2303.TW  UMC.N 
co-President Jason Wang said while they had seen "spots of
limited recovery" in the second quarter, overall end market
sentiment remained weak. 
    "Looking into the third quarter, wafer demand outlook is
uncertain given prolonged inventory correction in the supply
chain," he added.
    However, the company kept its guidance for capital spending
this year at $3 billion, compared with $2.7 billion for last
year.
    "We are gearing up to offer the necessary silicon interposer
technology and capacity to fulfil emerging AI market demand from
customers," Wang said.
    UMC, whose clients include U.S. company Qualcomm Inc
 QCOM.O  and Germany's Infineon  IFXGn.DE , reported a 21.9%
year-on-year fall in second-quarter revenue to T$56.3 billion 
($1.80 billion), though that was up 3.8% from the previous
quarter.
    Wafer shipments were flat quarter-on-quarter, while capacity
utilisation edged up to 71% from 70% in the first quarter.
    UMC's Taipei-listed shares have risen around 11% so far this
year, compared with a 21% jump in the broader market  .TWII .
They closed down 1.2% on Wednesday.

($1 = 31.2140 Taiwan dollars)

 (Writing by Ben Blanchard; editing by Christina Fincher)
 ((ben.blanchard@thomsonreuters.com;))