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UMC reports US$717 million loss as fab utilization rates hit 48%
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UMC followed the other major pure-play foundries in reporting a significant decline in revenue and fab utilization rates for the 4Q08 as the economic recession impacted orders from semiconductor customers. Although UMC claimed to have reduced fab utilization breakeven to 60% in Q4, losses mounted to US$717 million as utilization rates hit only 48%. UMC had previously guided utilization rates would decline to approximately 55% for the fourth quarter. This is the second sequential quarter that UMC has posted losses.
"The global economic recession in 4Q08 also impacted UMC, characterized by a sharp drop in customer demand during the quarter,” commented Dr. Shih-Wei Sun, CEO of UMC. “For the quarter, wafer shipments dropped to 567 thousand 8-inch equivalent wafers. Customers still remain conservative about end market demand and are strictly controlling their purchase orders and inventory levels.”
UMC said that capital expenditure for 2008 was US$349 million, which was lower than the original CapEx guidance of US$400-500 million. This is the second sequential year that UMC has underspent guided capital spending plan. UMC noted that the shortfall in spending was due to the lack of demand.
Although executives felt that a bottom may have been reached in demand, UMC is holding CapEx for 2009 at a US$400 million maximum, relatively flat to 2008.
