United Microelectronics (UMC) has reported net profits surged 36.4% sequentially and over 200% on year to NT$9.11 billion (US$318.4 million) in the third quarter of 2020. EPS for the quarter came to NT$0.75.

UMC saw its revenue hit a record high of NT$44.87 billion in the third quarter of 2020, when operating profits climbed 22% on quarter to NT$7.13 billion. The foundry utilized 97% of production capacity during the quarter. Gross margin and operating margin arrived at 21.8% and 15.9%, respectively.

"Work-from-home and home schooling trends continued to contribute to stable end market demand for applications in wireless connectivity, power management ICs used in smartphones as well as high-speed interface I/O controllers found in computing devices," said UMC co-president Jason Wang. "In addition to demand stability across various end markets, our 28nm revenue grew QoQ as consumer product tape-outs continued throughout the quarter."

UMC saw 28nm chip sales account for 14% of its total wafer revenue in the third quarter of 2020. "We expect to see a sustained increase in the number of 28nm tape-outs, which will further diversify our 28nm exposure to end markets and customers," Wang continued.

UMC expects to post sequential increases of 1-2% in wafer shipments and 1% in ASPs for the fourth quarter of 2020, with flat growth in gross margin. Capacity utilization is estimated at about 95%.

"Demand from consumer and computer related applications will lead to a minor increase in wafer shipments, propelled by ongoing work-from-home initiatives and home schooling," Wang noted. "Furthermore, we have seen an uptick in semiconductor demand due to more silicon content in particular applications such as newly deployed 5G smartphones, IoT devices and other consumer products."

In other news, UMC's board of directors has authorized a capital budget execution of NT$14.79 billion for capacity deployment. The board also authorized company chairman Stan Hung to tender, bid, negotiate and/or sign related documents for potential investments that could be developed for UMC's long-term growth.

By: DocMemory
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