Published:2012/2/9 20:47:00 Author:Phyllis From:SeekIC
United Microelectronics Corp. (UMC) said it plans to spend about $2 billion on capital expenditures in 2012, up 25 percent from the roughly $1.6 billion it spent on capital expenditures in 2011.
UMC’s capital spending budget increase comes after Intel Corp. and Samsung Electronics Co. Ltd. announced last month that they plan to spend more on capital expenditures than industry observers expected. Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), UMC’s biggest rival in the pure play foundry space announced last month it plans to spend about $6 billion on capex this year. Globalfoundries Inc., another key UMC competitor, has said plans to spend about $3 billion on capex this year.
UMC’s fourth quarter 2011 sales of NT$24.43 billion, down 3 percent from the third quarter and down 22 percent compared to the fourth quarter of 2010. The company reported a net income for the quarter of NT$1.18 billion, down 40 percent from the previous quarter and down 82 percent from the fourth quarter of 2010.
Though UMC’s sales declined in the fourth quarter, they came in ahead of consensus analysts’ expectations and were within the range of the company’s own guidance.
Since the first quarter of the year is traditionally slow, UMC’s quarterly revenue is expected to decrease slightly from the previous quarter. The company said they expect to maintain operating profitability through continuous cost reduction and efficiency enhancement measures.
UMC reported that its capacity utilization rate fell to 68 percent in the fourth quarter, down from 74 percent in the third quarter and 94 percent in the fourth quarter of 2010.
UMC said it was optimistic about the demand for advanced mobile communication and computing chips and would expand its 40- and 28-nm manufacturing capacity in order to capitalize on the opportunity.
United Microelectronics Corp. is sampling a 28-nm application processor amid indications that the roll out of the leading-edge process technology is going better than expected. Both Globalfoundries and TSMC are reported to have had problems with the ramp up of their leading edge manufacturing process technologies, although TSMC has denied this, saying that yield improvement on its 28-nm processes is on course.
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