- Q4 revenue +14.8% y/y, -10% q/q
- Capex 2023 3 billion dollars compared to 2.7 billion dollars in 2022
- Persistent “difficult environment” in the first quarter
TAIPEI, Jan 16 (Reuters) – Taiwanese chipmaker United Microelectronics Corp (UMC) (2303.TW) said on Monday it was implementing strict cost controls due to weak demand and weak outlook, another sign of the tech industry’s pain.
UMC, whose customers include U.S. Qualcomm Inc (QCOM.O) and Germany’s Infineon (IFXGn.DE), has benefited from a global semiconductor shortage that has kept chipmakers’ order books full. over the past two years or so.
But demand has slumped in recent months as soaring inflation, rising interest rates and a bleak global economic outlook have led consumers and businesses to cut spending.
“Given the weak global economic outlook for 2023, we expect the current challenging environment to persist through the first quarter as customer inventory days are still higher than normal while visibility of orders remains weak,” co-chairman Jason Wang said on an earnings call.
“To manage this period of weakness, the company is implementing strict cost control measures and deferring certain capital expenditures where possible.” I
The company’s 2022 capital expenditure was $2.7 billion, less than the $3 billion previously forecast, with 2023 expenditure set at $3 billion, Chief Financial Officer Chitung Liu said. adding that new capacity would come online in the third quarter in the city of Tainan in southern Taiwan.
The auto industry, which has been hit hard by the global chip shortage, is expected to be a “key growth catalyst” this year and beyond, given the shift to electric vehicles, Wang added.
The company reported a 14.8% year-on-year increase in fourth-quarter revenue to T$67.84 billion ($2.24 billion), though it was down 10% compared to the previous quarter, as wafer shipments fell 14.8% quarter-on-quarter.
Taiwan’s biggest rival TSMC (2330.TW), the world’s biggest contract chipmaker, reported a 78% rise in fourth-quarter profit last week, but warned first-quarter revenue would plummet. up to 5% and would reduce the annual investment.
Shares of UMC closed 1.1% lower on Monday, underperforming a 0.7% rise in the broader market (.TWII). They have gained 10.3% so far this year, giving the company a market value of $18.7 billion.
($1 = 30.3030 Taiwan dollars)
Reporting by Ben Blanchard; Editing by Edmund Blair
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