United Microelectronics Corporation (UMC) has announced operating profits declined 45.3% sequentially to NT$840 million (US$28.5 million) in the fourth quarter of 2011 with revenues sliding 3% on quarter.

UMC indicated that the sequential decrease in fourth-quarter revenues was caused by falling shipments. The foundry shipped 915,000 8-inch equivalent wafers in the fourth quarter, down from 1.025 million units in the third. Along with the fewer shipments, UMC's overall utilization rate averaged 68% compared to 74% in the prior quarter.

UMC's operating profits for the fourth quarter also tumbled 87.3% compared to NT$6.6 billion for the same period of 2010. Revenues for the fourth quarter of 2011 were down 22% from the NT$31.32 billion registered a year ago.

UMC utilized more than 90% of its capacity in the fourth quarter of 2010, and saw its shipments total 1.132 million 8-inch equivalent wafers.

UMC's net profits shrank 39.6% on quarter and 81.6% from a year earlier to NT$1.18 billion in the fourth quarter of 2011. EPS came to NT$0.09.

UMC CEO Shih-Wei Sun stated that fourth-quarter sales were in line with the company's guidance. Sun also pointed out that 40nm process accounted for more than 10% of company revenues in December, which brought revenue contribution from the node technology to 8% for the fourth quarter.

"UMC is optimistic about the demand for advanced mobile communication and computing chips. To capitalize on this opportunity, we will expand our comprehensive 28nm and 40nm foundry capacity. Our 2012 capex budget of US$2 billion will help fulfill this commitment," Sun said in a statement.

Communication products took up 60% of UMC's total revenues in the fourth quarter, up from 53% in the third. PC and communications products commanded a respective 14% and 23% of revenues, down by 3pp and 5pp, respectively. UMC noted that weak demand for LCD- and power-related ICs led to the fall in the consumer product segment during the fourth quarter.

UMC expects its consumer and computer product segments to outpace the communication segment in the first quarter of 2012, when the foundry forecast its overall wafer shipments will increase slightly on quarter. However, ASPs for the first quarter will likely see another 5% decrease, UMC said.

UMC reported net profits of NT$10.81 billion on revenues of NT$105.88 billion for 2011, showing decreases of 54.8% in profits and 12.1% in sales. EPS for the year came to NT$0.86 compared to the

By: DocMemory
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