02.15.2001
The message from UMC's investors' conference: the sector is yet to bottom out

• UMC (2303 'Lian Dian') yesterday predicted at its investors' conference an across-the-board 25% decline in foundries' 1Q01 revenue and remains conservative on outlook in 2Q01. However, it expects to see a turnaround as early as 3Q01.

• UMC has cut 2001 CAPEX to US$1.5b, 50% lower than the guidance issued during its 3Q00 investors' conference. 90% will go to 12-inch lines and 10% to advanced copper modules. Capacity for 2001 is set at 3.28m units (8" equivalent), up 27% YoY.

• UMC hinted during the conference that it has secured new orders with pilot runs to begin in 2Q01 and volume production in 3Q01. The local press reports today, without disclosing its sources, that UMC has secured the following orders: IBM logic chips at 20k units per month; AMC flash and CPU at 10k units per month; and Qualcomm Comm IC chips for CDMA handsets at 10k units per month. If these orders materialize, they will absorb 17% of UMC's planned capacity in 2001.

• The company also announced 4Q00 financials: revenue was NT$31.8b, up 8% QoQ, but slightly short of both our estimates and the company's revised revenue forecast; pretax profit was NT$16.7b, up 15% QoQ, for a 2000 EPS of NT$4.57.

LindaLiu@Primasia.com +886-[0]2-2547-8867