United Microelectronics Corp. reduced its capital spending forecast by 9% to $3 billion as the semiconductor foundry grapples with deteriorating demand and falling utilization rates.
The Taiwanese contract chipmaker projects its factory utilization to decline to between 66% and 69% in the fourth quarter, down from 71% in the previous period. The company’s gross margin is set to slip below 30% for the first time since early 2021.
While computing segment orders showed resilience, weakness in automotive and industrial sectors continues to weigh on the company’s performance, co-president Jason Wang said at an online investor conference. The firm’s shares fell 0.5% to NT$48.15 ($1.50) in Taipei trading.
UMC expects wafer shipments to remain flat quarter-on-quarter, with dollar-based average selling prices holding steady. However, the strengthening Taiwan dollar will impact revenue when converted to the local currency.
The company pushed back equipment installation at its new Singapore facility, though it maintains its target to begin mass production there in 2026. Management expressed optimism about a potential recovery in 2025, forecasting utilization rates could return to 80% as automotive inventory levels normalize by mid-next year.
