United Microelectronics (UMC) saw its revenues increase about 3% sequentially in the third quarter of 2012, despite having lower shipments for the quarter, according to the foundry chipmaker. UMC expects to post another shipment drop sequentially in the fourth quarter.

"Increased 40nm revenue contribution led to higher ASP, which contributed to third-quarter revenue growth," said UMC CEO Shih-Wei Sun in a statement.

However, UMC's wafer shipments for the fourth quarter are set to decrease 7-9% sequentially, with ASPs up about 2%, the foundry indicated.

UMC announced third-quarter revenues of NT$28.5 billion (US$973.22 million), up 3.3% on quarter and 13.3% on year. Sales generated from 40nm process technology accounted for 13% of company revenues in the third quarter, compared to 9% in the second quarter and 6% in third-quarter 2011.

UMC utilized 84% of its overall capacity in the third quarter of 2012, staying flat on quarter but up 10pp from a year ago. The foundry shipped about 1.13 billion 8-inch equivalent wafers in the third quarter, down from 1.14 billion in the prior quarter but up from the 1.025 million shipped in third-quarter 2011.

Despite the on-quarter increase in revenues, UMC saw its gross margin slide 0.4pp to 24% in the third quarter from the previous quarter. Net profits for the third quarter also declined 19.2% sequentially to NT$2.42 billion, or NT$0.19 per share.

Looking forward, UMC estimated that its overall capacity utilization would fall to mid to high 70% in the fourth quarter. Gross margin will slip below 20% in the fourth quarter, due to lower utilization rates and shipments, the firm said.

"We expect the present inventory adjustment to continue into early next year. The momentum of the demand recovery in 2013 will be determined by macroeconomic conditions, end demand strength and the transition progress for new products entering the market," Sun continued.

In addition, Sun noted that UMC in the third quarter successfully taped out a mobile communications IC using its 28nm HKMG (gate-last) process.

Rival TSMC saw shipments of 28nm process technology more than double during the third quarter to account for 13% of the foundry's total wafer sales. The sales proportion is forecast to exceed 20% in the fourth quarter.

By: DocMemory
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