FILE PHOTO: The signboard of United Microelectronics Corp (UMC) is seen in Xinchu, the south city of Taipei, Taiwan January 10, 2006. Taiwan on Monday indicted Robert Tsao, the former chairman of the world’s second-largest contract microchip maker UMC, for breach of trust over UMC’s involvement with a microchip company in China. REUTERS/Richard Chung
TAIPEI : Taiwan chipmaker United Microelectronics Corp offered a bullish outlook for this year and next on Wednesday, saying it was still having problems meeting customer demand even as notebooks and smartphones were showing some weakness.
UMC, whose clients include Qualcomm Inc and Germany’s Infineon, has like other chipmakers benefited from a global shortage of semiconductors that have filled its order books.
Co-president Jason Wang told an earnings call that this year it remained a challenge to meet demand.
While the lockdown in Shanghai and its environs to control COVID-19 had had “some effect” on demand, overall strong demand for auto chips, industrial servers and networking segments had offset softness in smartphones, note books and personal computers, he added.
“For the overall 2022, it still remains a challenge for us to meet the aggregate demand from our customers,” Wang said, as UMC reported a 34.7 per cent on-year jump in first-quarter revenue to T$63.42 billion ($2.16 billion).
“We are still seriously undersupplied to our customers.”
Gross profit rose 19 per cent quarter-on-quarter and 120 per cent year-on-year to T$27.5 billion. Its gross margin was 43.4 per cent, and operating margin 35.2 per cent.
Larger competitor TSMC has forecast an up to 37 per cent jump in current-quarter sales and said it expects chip capacity to remain very tight this year, amid a global crunch that has kept order books full and allowed chipmakers to charge premium prices.
The shortage has forced some automakers and electronics manufacturers to cut production.
UMC said in 2021 it would spend T$100 billion ($3.40 billion) over the next three years to expand capacity and would guarantee supplies and prices to its clients as part of the plan. Wang said there were problems in the supply chain, including shortages of components and labour, and equipment delays, which means some capacity expansion may not come online as scheduled.
But, looking ahead to next year, he said the company was “comfortable about our 2023 regardless of the supply dynamics”.
Shares of UMC have fallen about 32 per cent so far this year, giving the firm a market value of $18.9 billion. The stock closed down 2.95 per cent on Wednesday, compared with a 2.1 per cent drop for the benchmark index.
($1 = 29.4140 Taiwan dollars)