UPDATE 1-UMC April sales show stronger chip demand

* April sales T$9.32 bln vs T$6.88 bln year ago

* Stock up 0.34 percent before results
(Adds details)

TAIPEI, May 7 (BestGrowthStock) – Taiwan’s UMC (2303.TW: ), the world’s
No.2 contract chip maker, posted a 36 percent annual rise in
April sales on Friday, providing further evidence of reviving
demand for computers and other consumer gadgets.

Last month, both UMC (UMC.N: ) and sector leader TSMC (2330.TW: )
(TSM.N: ) flagged a stronger second quarter with the help of
advanced process technology to produce more powerful chips for
their customers. [ID:nTOE63P06O]

Since the cost of chip manufacturing has risen, many major
chipmakers in the United States, Europe and Japan have outsourced
production, good news for chip foundries such as TSMC and UMC.

UMC’s sales results came after the Taipei stock market closed
on Friday. The stock rose 0.34 percent, while the main TAIEX
share index (.TWII: ) lost 0.16 percent. TSMC, whose April sales
are due out on Monday, finished down 0.17 percent.

In a report released last week, HSBC said UMC shares look
cheap based on a price-to-book ratio of 1.2 times.

Meanwhile, analysts say UMC’s plan to raise $411 million
could pave the way for the world’s No.2 chip foundry to seek the
new technology and markets it needs to keep up with TSMC.
[ID:nTOE64404U] [ID:nTOE64500H]

United Microelectronics Corp (UMC) garnered sales of T$9.32
billion ($294 million) last month, up from T$6.88 billion the
same month a year ago but slightly lower than March’s level.

Sales amounted to T$36.03 billion in January-April, doubling
from the year-ago period, it said.

(For a graphic on UMC’s sales, click

UMC supplies chips to chip designers without their own
plants, accounting for nearly 80 percent of its total sales last
year. It counts Taiwan’s Mediatek (2454.TW: ) and U.S. Xilinx
(XLNX.O: ) among its major clients.

Stock Market Report

(Editing by Ken Wills)

UPDATE 1-UMC April sales show stronger chip demand