United Microelectronics (UMC) expects revenues to decrease sequentially in the third quarter of 2011, affected by fewer wafer shipments.

Utilization rate for the quarter is estimated at low-70%, down from 87% in the second quarter, according to the contract chipmaker.

Along with lower revenues and utilization rate, UMC's operating margin will slip to low single digits in the third quarter, UMC said.

UMC has expressed caution about its outlook for the second half of 2011 on worries that global macroeconomic factors may dampen consumer demand.

Despite the cloudy outlook, UMC's planned capex budget for 2011 of US$1.8 billion remains unchanged, Sun indicated. Capex will support the company's advanced production ramp as well as R&D, Sun added.

"UMC's volume production 40nm process is expected to reach 10% of revenue by the nd of 2011," Sun said. "We are also smoothly developing our 28nm process and design IP platform, with the first of several 28nm customer products entering pilot production in the third quarter of 2011."

UMC reported NT$28.15 billion (US$980.5 million) in revenues for the second quarter of 2011, up 0.1% on quarter but down 5.4% on year. Gross margin and operating margin for the quarter stood at 23.9% and 11.8%, respectively.

UMC said that its second-quarter 2011 results came in line with its guidance, with wafer shipments up 2.2% sequentially to 1.15 million 8-inch equivalent wafers.

By: DocMemory
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