Taiwan chipmaker UMC sees 'uncertain' demand, Prepares for AI

Taiwanese chipmaker United Microelectronics Corp (UMC) said on Wednesday that it sees "uncertain" demand, plans as its gears up for artificial intelligence (AI).

Taiwan chipmaker UMC sees 'uncertain' demand, Prepares for AI

Taiwanese chipmaker United Microelectronics Corp (UMC) said on Wednesday (26th July 2023) that it sees "uncertain" demand in the third quarter but stuck to its 2023 capital spending plans as its gears up to meet customer demand for artificial intelligence (AI).

The semiconductor industry has come under pressure as global economic woes dent demand for chips used in everything from cars to cellphones.

UMC's bigger Taiwanese rival TSMC, the world's largest contract chipmaker, last week forecast a drop of around 10% in 2023 sales and flagged investment spending at the low end of estimates.

Speaking on an earnings call, UMC co-President Jason Wang said while they had seen "spots of limited recovery" in the second quarter, overall end market sentiment remained weak.

"Looking into the third quarter, wafer demand outlook is uncertain given prolonged inventory correction in the supply chain," he added.

However, the company kept its guidance for capital spending this year at $3 billion, compared with $2.7 billion for last year.

"We are gearing up to offer the necessary silicon interposer technology and capacity to fulfil emerging AI market demand from customers," Wang said.

UMC, whose clients include U.S. company Qualcomm Inc and Germany's Infineon, reported a 21.9% year-on-year fall in second-quarter revenue to T$56.3 billion ($1.80 billion), though that was up 3.8% from the previous quarter.

Wafer shipments were flat quarter-on-quarter, while capacity utilisation edged up to 71% from 70% in the first quarter.

@ Thomson Reuters 2023

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