UMS sees utilisation rate up to 85% in 3Q

Written by Thomson Reuters

Tuesday, 03 August 2010 13:14

Singapore’s UMS Holdings , which makes equipment used by chipmakers, said on Tuesday it will ramp up utilisation at its factories to 85% in the third quarter from 65% to meet improving demand.

“We have a lot of orders from customers in the semiconductor business...We have more orders than our capacity can take,” UMS Chief Executive Officer Andy Luong told Reuters in an interview. UMS said it was poised to take advantage of the upswing in demand for semiconductor chips as global spending on electronic gadgets like smartphones and computers was increasing. Luong said he expected UMS to have a full order book for the rest of the year but did not give any revenue forecasts.

UMS reported a second-quarter net profit of $7.48 million, up from a net loss of $22.9 million in the year earlier period. The stock was down 2.27% at $0.43 at the midday break on Tuesday, but was at a year-high of $0.44 on Monday, up 159% in the year-to-date. Technology bellwether Intel reported in July second-quarter sales and net profit that beat market estimates and forecast stronger-than-expected sales for the current quarter.

The world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Co. <2330.TW> raised its 2010 capital spending forecast to US$5.9 billion ($7.9 billion) from its previous estimate of US$4.8 million, after posting a record quarterly profit in the April-June period. But this has raised concerns of a supply glut forming in late 2010 or early 2011 if Europe’s debt problems persist and weakens consumer demand for electronics products. “The increase in capacity expenditure by the big chipmakers is to meet demand for new technologies,” said Luong, adding he saw little chance of a supply glut.

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