Taiwan chipmaker UMC sees demand stabilising, with 'rush' PC, smartphone orders

United Microelectronics

25/10/2023 10:06

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      UMC sees gradually stabilising demand in Q4
    

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      UMC says customers still cautious
    

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      Q3 revenue -24.3% y/y, +1.4% q/q
    

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      2023 capex guidance unchanged at $3 bln
    

  
       TAIPEI, Oct 25 (Reuters) - Taiwanese chipmaker United
Microelectronics Corp (UMC) said on Wednesday it sees gradually
stabilising demand in the fourth quarter with recent "rush
orders" for personal computers and smartphones, but added that
customers remain cautious.
    The semiconductor industry has come under pressure as global
economic woes dent demand for chips used in everything from
tablets to cellphones and cars.
    UMC's bigger Taiwanese rival TSMC  2330.TW   TSM.N , the
world's largest contract chipmaker, said last week the
semiconductor industry could be poised for recovery, predicting
healthy growth for itself next year and a drop in industry
inventory levels.
    In an earnings release, UMC  2303.TW  UMC.N  co-President
Jason Wang said it expected demand to gradually stabilise in the
last three months of the year.
    "For the fourth quarter, with the recent rush orders from PC
and smartphones, we expect demand has gradually stabilised," he
said.
    "However, customers still employ a cautious and conservative
approach in maintaining lean inventory levels, while automotive
business conditions appear challenging."
    However, the company kept its guidance for capital spending
this year at $3 billion, compared with $2.7 billion for last
year.
    The second half of the year is traditionally when Taiwanese
tech firms are busiest filling orders ahead of the year-end
holiday season in Western markets.     
    UMC, whose clients include U.S. company Qualcomm Inc
 QCOM.O  and Germany's Infineon  IFXGn.DE , reported a 24.3%
year-on-year drop in third-quarter revenue to T$57.1 billion 
($1.76 billion), though that was up 1.4% from the previous
quarter.
    Wafer shipments dipped 2.3% quarter-on-quarter, while
capacity utilisation edged down to 67% from 71% in the second
quarter.
    UMC's Taipei-listed shares have risen 20.5% so far this
year, outperforming a 15.7% jump in the broader market  .TWII .
They closed up 1.6% on Wednesday before the earnings
announcement.
    ($1 = 32.3560 Taiwan dollars)

 (Reporting by Ben Blanchard; Editing by Jan Harvey)
 ((ben.blanchard@thomsonreuters.com;))