TAIPEI, Jan 31 (Reuters) – Taiwanese chipmaker United Microelectronics Corp (UMC) said on Wednesday it was “cautiously optimistic” for demand this year even with macroeconomic uncertainty, as it increased capital spending by 10% compared with 2023.
The semiconductor industry has come under pressure as global economic woes dent demand for chips used in everything from tablets to cellphones and cars.
On an earnings call, UMC co-President Jason Wang said they expected overall wafer demand in the first quarter to “increase mildly”.
“We are cautiously optimistic about 2024. However, visibility for 2024 is still relatively limited due to macro uncertainties, consumer spending, higher interest rates, inflationary pressures,” he said.
“Our primary focus for 2024 is to continue to enhance the company’s resilience to weather this market turbulence and then embrace the market upturn.”
The company raised by 10% its capital spending for this year to $3.3 billion, mostly for expansion plans in Singapore and southern Taiwan’s Tainan, compared with $3 billion for last year.
UMC last week announced a collaboration with IBM to develop a semiconductor process platform for relatively mature 12 nanometre technology with production in Arizona expected to start in 2027.
UMC’s much bigger Taiwanese rival TSMC , the world’s largest contract chipmaker, earlier this month gave a bullish outlook on the back of the boom in artificial intelligence (AI), sending global stock markets soaring.
UMC focuses on maturer nodes, unlike TSMC which is investing big in the most advanced 2 and 1 nanometre technology.
UMC, whose clients include U.S. company Qualcomm Inc and Germany’s Infineon, reported a 19% year-on-year drop in fourth-quarter revenue to T$54.96 billion ($1.76 billion), down 3.7% from the previous quarter.
Wafer shipments fell 2.5% quarter on quarter, while capacity utilisation edged down to 66% from 67%.
UMC’s Taipei-listed shares have slid 6.8% so far this year, underperforming a 0.2% dip in the broader market. They closed down 1.2% on Wednesday before the earnings announcement.
($1 = 31.2730 Taiwan dollars) (Reporting by Ben Blanchard; editing by David Evans)