Chipmaker UMC Reports 24.3% Drop in Q3 Revenue

United Microelectronics (UMC), a leading Taiwanese semiconductor manufacturer, has announced a 24.3 percent year-on-year decline in its third-quarter revenue, which totaled T$57.1 billion ($1.76 billion). While this represents a challenging period for the company, there is a glimmer of hope as revenue increased by 1.4 percent compared to the previous quarter.
United Microelectronics Corporation (UMC) jobUMC’s Q3 performance was marked by a 2.3 percent decrease in wafer shipments when compared to the previous quarter. Additionally, the company’s capacity utilization rate dipped from 71 percent in the second quarter to 67 percent in the third quarter.

Taipei, Taiwan-based UMC boasts a prominent clientele, including industry giants like Qualcomm from the United States and Infineon from Germany. The company has noted that it foresees gradual stabilization in demand during the fourth quarter. Recent “rush orders” for personal computers and smartphones indicate some recovery, although customers are exercising caution in their approach to inventory management.

The global semiconductor industry has faced mounting challenges as economic uncertainties have led to a reduction in demand for chips used in various devices, ranging from tablets and cellphones to automobiles.

UMC’s larger Taiwanese counterpart, TSMC (Taiwan Semiconductor Manufacturing Company), the world’s largest contract chipmaker, has expressed a more optimistic outlook, anticipating robust growth for itself in the coming year and a decrease in industry inventory levels.

UMC’s co-President, Jason Wang, shared insights on the company’s expectations for the last quarter of the year, stating, “For the fourth quarter, with the recent rush orders from PC and smartphones, we expect demand has gradually stabilized. Customers remain cautious and conservative in their inventory management, while the automotive sector continues to face challenges.”

Despite the challenging market conditions, UMC has chosen to maintain its guidance for capital spending this year, budgeting $3 billion, in contrast to last year’s $2.7 billion. The latter half of the year typically sees Taiwanese tech companies working at their peak as they fulfill orders in preparation for the year-end holiday season in Western markets, Reuters news report said.