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UMC puts US$400 million cap on CapEx for 2009: fab utilization rate at 30%
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UMC posted a net loss of US$240 million in the first quarter, with revenue of US$319 million on the back of weak demand and extremely low fab utilization rates of only 30%. Capital expenditure for 2009 has been capped at no more than US$400 million, up from US$350 million in 2008. UMC spent US$46 million on CapEx in 1Q09.
The second largest foundry is using the US$400 million for technology buys in 2009, rather than any meaningful capacity additions, even though it expects a sharp rise in fab capacity utilization rates in the second quarter due to rush orders and a return to strong orders from foundry customers. UMC said that utilization rates would rise to approximately 75% in 2Q.
UMC said that spending was focused on 40nm equipment, which would give the foundry between 5,000 wafer starts and 10,000 wafer starts of 40nm capacity in 2009. The foundry said that it has 10 customers at various stages of pilot production at the 40nm node but did not expect meaningful revenue for this node until 2010.
Indeed, from a customer node perspective, UMC is seeing more activity at the 65nm node, though even this only amounts to 11% of revenue in the first quarter.
Executives noted in the call that it’s CapEx and R&D spending was sufficient for future node migrations due to the lengthening in time customers are taking to shift nodes.
