Taiwan Chipmaker UMC Sees Further Growth For Sector Into 2023

Taiwanese chipmaker United Microelectronics Corp (UMC) said on Wednesday it sees continued growth for the industry into next year, even as soaring inflation and recession fears cool demand for consumer electronics.

"After two very strong years in the semi market - we call it a supercycle - and hitting the recent turbulence and disruption from the market, and after this rising macro uncertainty, higher inflationary cost issues, we still foresee the foundry industry growing in 2023," co-president Jason Wang told an earnings call.

"It will be more moderate, but it is going to be another growth year."

UMC, whose clients include Qualcomm Inc and Germany's Infineon, benefited from a global chip shortage that has kept chipmakers' order books full over the past two years.

While companies such as Micron Technology Inc have recently signalled waning demand for chips, prompting investor concern that the industry may slide into a down cycle, UMC said stable demand in its networking, industrial, and auto segments helped offset softening demand for smartphones and notebooks.

"We foresee our Q3 loading will be full," Wang said, as UMC reported a 41.5% year-on-year jump in second-quarter revenue to a record high of T$72.06 billion ($2.4 billion).

"Despite the rising uncertainty of the macro outlook, our view of the 2022 foundry industry growth of 20 percent plus remains unchanged. And our target is to grow in line or higher than the foundry industry."

Earlier this month, Taiwan's TSMC, the world's largest contract chipmaker, forecast revenue growth for the current quarter potentially at its highest in 10 quarters, citing surging long-term demand, including for chips used in data centres and electric vehicles.

U.S. chipmaker Intel Corp said this month it had informed customers of plans to increase prices for many of its chip products due to rising costs.

($1 = 29.9460 Taiwan dollars)