UMC reports Q2 2010 results

TAIWAN: United Microelectronics Corp. (UMC) has announced its unconsolidated operating results for the second quarter of 2010.

Revenue increased 11.3 percent quarter-over-quarter to NT$29.75 billion, from NT$26.72 billion in 1Q10, and increased 31.5 percent year-over-year, from NT$22.63 billion in 2Q09. Gross margin was 29.6 percent, operating margin was 18.3 percent, net income was NT$5.27 billion, and earnings per ordinary share were NT$0.42.

Dr. Shih-Wei Sun, CEO of UMC, said: "Capacity utilization for the second quarter of 2010 was full, with shipments growing to a record 1,156 thousand 8-inch equivalent wafers. Revenue this quarter exceeded expectations, due to UMC's accelerated ramp-up of advanced process capacity and optimization of product mix.

"Revenue contribution from 65nm and below products grew more than 50 percent compared to the previous quarter, with 40nm output reaching 3 percent of revenue. As such, UMC achieved a five-year high in operating income and an annualized ROE of more than 10 percent this quarter. Demand is expected to remain robust for advanced processes, driven by new applications and technology migration. Therefore, we are optimistic about third-quarter growth, anticipate rising revenues and profit, and maintain a healthy outlook for mid to long-term demand."

Dr. Sun continued: "UMC's successful efforts to customize advanced technology development and optimize product mix have led to an expanded customer base, increased sales, and greater profit capability. To continue boosting competitiveness and pursuing steady growth, UMC plans its capital expenditures based on careful assessments of mid to long-term demand and capacity expansion risks, according to our "customer-driven" perspective, so as to capture the robust growth momentum in addressable foundry markets. UMC plans to raise this year's capital expenditures to $1.8 billion to satisfy customer demand for advanced technology and capacity."

Dr. Sun emphasized: "This invested CAPEX is being used to expand advanced capacity. Currently, advanced process equipment procurement and installation are proceeding smoothly. Singapore's Fab12i has been accelerating its 65/55nm capacity expansion to better serve our foundry customers this year.

"Fab 12A's Phase 3 cleanroom, already completed in July ahead of schedule and moving forward briskly with equipment installation, is expected to start production by year-end and increase 40nm production output at an accelerated pace next year. This expansion will gradually build up economy of scale and usher in a new wave of growth, producing a win-win situation with customers and boosting shareholders' return on equity."