video Global financial system will be ‘shocked’ when China annexes Taiwan: Vivek Ramaswamy
Strive founder Vivek Ramaswamy discusses Paypal’s new ‘misinformation’ policy and the threat of China invading Taiwan on ‘Varney & Co.’
Taiwanese chipmaker United Microelectronics Corp (UMC) has cut this year's planned capital expenditure by almost a fifth, it said on Wednesday, citing weakening consumer demand without signs of recovery.
UMC, clients of which include U.S. company Qualcomm Inc and Germany's Infineon, has benefited from a global semiconductor shortage that has kept chipmakers' order books full over the past two years.
However, demand has slumped in recent months as soaring inflation, rising interest rates and a gloomy economic outlook have led consumers and businesses to tighten spending.
A member of the media takes video of United Microelectronics Corporation (UMC) logo at the company’s offices at Hsinchu Science Park in Hsinchu, Taiwan, September 16, 2022. REUTERS/Ann Wang (Reuters Photos) TOP WALL STREET CEOS REVIVE WARNINGS ABOUT US ECONOMIC RECESSION AS INFLATION RAGES
"Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and the Ukraine war," UMC co-president Jason Wang said in an earnings call.
Ticker Security Last Change Change % UMC UNITED MICROELECTRONICS 5.92 -0.30 -4.90%
The company has observed a prolonged downturn in smartphone and personal computer demand in a trend that will linger into the first half of next year, Wang said, adding that the decline is from a high base.
CLICK HERE TO GET THE FOX BUSINESS APP
"There's no tangible sign of recovery in the near term," he said.
The company has revised 2022 capital expenditure down to $3 billion, compared with a previous plan for $3.6 billion, said finance chief Chitung Liu.
WASHINGTON, DC August 9, 2022: US President Biden signs into law the CHIPS and Science Act of 2022, on the South Lawn of the White House in Washington, Tuesday, August 9, 2022. Left to right: Founder and CEO of SparkCharge Joshua Aviv, US President J ((Photo by Demetrius Freeman/The Washington Post via Getty Images) / Getty Images)
However, expansion in Singapore and Tainan in southern Taiwan are progressing as planned to meet long-term supply commitments, Wang said.
The company reported a 34.9% leap in third-quarter revenue to T$75.39 billion.
South Korea's SK Hynix Inc also warned on Wednesday of an "unprecedented deterioration" in memory chip demand, saying it would cut investment drastically after quarterly profit tumbled by 60%.
Employees work at the headquarters of the world’s largest semiconductor maker TSMC in Hsinchu on January 29, 2021. (Photo by Sam Yeh / AFP) (Photo by SAM YEH/AFP via Getty Images) (Photo by Sam Yeh / AFP) (Photo by SAM YEH/AFP via Getty Image / Getty Images) ARIZONA GOV. DOUG DUCEY VISITS TAIWAN FOR ANNOUNCEMENT OF $12 BILLION SEMICONDUCTOR PLANT FOR HIS STATE
Taiwanese rival TSMC, the world's largest contract chipmaker, this month reported an 80% surge in third-quarter profit, its strongest growth in two years, but cut its annual investment budget by at least 10% for 2022 and struck a more cautious note than usual on future demand.
Ticker Security Last Change Change % TSM TAIWAN SEMICONDUCTOR MANUFACTURING CO. LTD. 60.88 -0.19 -0.31%
Speaking on the latest set of U.S. export controls aimed at slowing China's progress in advanced chip manufacturing, Wang said UMC expects limited impact because the rules mainly target more advanced chips than the company produces.
However, UMC will continue to monitor developments and "take risk-management measures as necessary", he added.
Shares in UMC closed 3.4% down on Wednesday and have fallen about 41% this year.
Read Full Article