October 8, 2001 – Taipei, Taiwan – United Microelectronics Corporation (UMC) has revised its annual financial forecast for 2001.
Due to a worse than expected semiconductor industry downturn and slow economic recovery, for fiscal year 2001, UMC expects to post net sales of NT$63.55 billion, an operating loss of NT$5.3 billion, a pre-tax loss of NT$6.4 billion and net loss of NT$3.2 billion, resulting in a net loss per share of approximately NT$0.24.
Weakness in the global communication market has been the primary reason leading to the downward revision of UMC’s financial forecast, according to the company. Its strength in the communication segment has resulted in a significant negative impact on near-term performance. Not only has volume demand from communication customers shown a significant decline, ASP per wafer is also under pressure given that communication customers are the key clientele for leading-edge capacity, UMC said.
Secondly, UMC remains committed to retaining industry leadership in the area of advanced technology, and it continues to make progress in the deployment of deep sub-micron processes and the 300mm manufacturing platform. R&D expenses is expected to grow 47% year over year to reach NT$8.75 billion or 14% of our revenues in 2001. Although our short-term financial performance is affected by the increase in R&D expenses, UMC expects the long-term payoff to be rewarding.
Furthermore, UMC has taken this downturn as an opportunity to enhance its competitiveness. Other than its plan to reduce its 200mm wafer capacity by one-third, UMC has closed its Licensed Product Division in order to protect itself from the volatile memory market, according to the company. Write-off losses associated with the closure of LPD have caused the deterioration of its financial performance in 2001.