UMC expects its wafer shipments to rise 6% sequentially in the first quarter of 2013, with average selling prices (ASP) decreasing also 6%.

Hejian Technology, UMC's China-based subsidiary, will make a positive contribution to UMC's overall wafer shipments during the first quarter, said company CFO Chi Tung Liu at a February 6 investors meeting. However, ASPs will also be affected due to the lower quotes that Hejian offers, Liu indicated.

UMC announced that revenues for the fourth quarter of 2012 slid 8.5% sequentially to NT$26.09 billion (US$898.66 million), with gross margin falling 7.2pp on quarter. Nevertheless, both results came in line with company guidance, according to Po-Wen Yen, newly-appointed CEO of UMC.

Yen attributed the sales decline to the fewer wafers shipped. UMC utilized 80% of its overall capacity in fourth-quarter 2012, compared to 84% in the prior quarter.

Meanwhile, the shipment drop, as well as appreciation of the NT dollar, caused UMC's gross margin to fall in the fourth quarter, Yen continued.

UMC generated operating profits of NT$963 million in the fourth quarter of 2012, down 73.3% on quarter. Operating margin for the quarter slipped to 3.7% in the quarter.

UMC's net profits shrank 51.5% on quarter to NT$1.17 billion in fourth-quarter 2012. EPS for the quarter came to NT$0.09.

The core business will probably only be able to break even in the first quarter of 2013, Yen warned. UMC's overall utilization rate for the quarter will slip further to about 75%, Yen said.

In addition, Yen pointed out that sales generated from 40nm process technology as a proportion of company revenues reached 15% in the fourth quarter of 2012, meeting the internal target set previously. However, "UMC's 28nm ramp has been slower than anticipated," Yen stated.

UMC has set aside a capex budget of US$1.5 billion for 2013, compared to the US$1.70 allocated in 2012.

By: DocMemory
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