|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||53.00 - 54.60|
|52 Week Range||14.40 - 59.40|
|Beta (5Y Monthly)||1.04|
|PE Ratio (TTM)||22.85|
|Earnings Date||Apr 28, 2021|
|Forward Dividend & Yield||0.80 (1.52%)|
|Ex-Dividend Date||Jul 15, 2020|
|1y Target Est||12.94|
United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC"), today reported unaudited net sales for the month of March 2021.
(Bloomberg) -- To understand why the $450 billion semiconductor industry has lurched into crisis, a helpful place to start is a one-dollar part called a display driver.Hundreds of different kinds of chips make up the global silicon industry, with the flashiest ones from Qualcomm Inc. and Intel Corp. going for $100 apiece to more than $1,000. Those run powerful computers or the shiny smartphone in your pocket. A display driver chip is mundane by contrast: Its sole purpose is to convey basic instructions for illuminating the screen on your phone, monitor or navigation system.The trouble for the chip industry -- and increasingly companies beyond tech, like automakers -- is that there aren’t enough display drivers to go around. Firms that make them can’t keep up with surging demand so prices are spiking. That’s contributing to short supplies and increasing costs for liquid crystal display panels, essential components for making televisions and laptops, as well as cars, airplanes and high-end refrigerators.“It’s not like you can just make do. If you have everything else, but you don’t have a display driver, then you can’t build your product,” says Stacy Rasgon, who covers the semiconductor industry for Sanford C. Bernstein.Now the crunch in a handful of such seemingly insignificant parts -- power management chips are also in short supply, for example -- is cascading through the global economy. Automakers like Ford Motor Co., Nissan Motor Co. and Volkswagen AG have already scaled back production, leading to estimates for more than $60 billion in lost revenue for the industry this year.The situation is likely to get worse before it gets better. A rare winter storm in Texas knocked out swaths of U.S. production. A fire at a key Japan factory will shut the facility for a month. Samsung Electronics Co. warned of a “serious imbalance” in the industry, while Taiwan Semiconductor Manufacturing Co. said it can’t keep up with demand despite running factories at more than 100% of capacity.“I have never seen anything like this in the past 20 years since our company’s founding,” said Jordan Wu, co-founder and chief executive officer of Himax Technologies Co., a leading supplier of display drivers. “Every application is short of chips.”The chip crunch was born out of an understandable miscalculation as the coronavirus pandemic hit last year. When Covid-19 began spreading from China to the rest of the world, many companies anticipated people would cut back as times got tough.“I slashed all my projections. I was using the financial crisis as the model,” says Rasgon. “But demand was just really resilient.”People stuck at home started buying technology -- and then kept buying. They purchased better computers and bigger displays so they could work remotely. They got their kids new laptops for distance learning. They scooped up 4K televisions, game consoles, milk frothers, air fryers and immersion blenders to make life under quarantine more palatable. The pandemic turned into an extended Black Friday onlinepalooza.Automakers were blindsided. They shut factories during the lockdown while demand crashed because no one could get to showrooms. They told suppliers to stop shipping components, including the chips that are increasingly essential for cars.Then late last year, demand began to pick up. People wanted to get out and they didn’t want to use public transportation. Automakers reopened factories and went hat in hand to chipmakers like TSMC and Samsung. Their response? Back of the line. They couldn’t make chips fast enough for their still-loyal customers.Himax’s Jordan Wu is in the middle of the tech industry’s tempest. On a recent March morning, the bespectacled 61-year-old agreed to meet at his Taipei office to discuss the shortages and why they are so challenging to resolve. He was eager enough to talk that interview was scheduled for the same morning Bloomberg News requested it, with two of his staff joining in person and another two dialing in by phone. He wore a mask throughout the interview, speaking carefully and articulately.Wu founded Himax in 2001 with his brother Biing-seng, now the company’s chairman. They started out making driver ICs (for integrated circuits), as they’re known in the industry, for notebook computers and monitors. They went public in 2006 and grew with the computer industry, expanding into smartphones, tablets and touch screens. Their chips are now used in scores of products, from phones and televisions to automobiles.Wu explained that he can’t make more display drivers by pushing his workforce harder. Himax designs display drivers and then has them manufactured at a foundry like TSMC or United Microelectronics Corp. His chips are made on what’s artfully called “mature node” technology, equipment at least a couple generations behind the cutting-edge processes. These machines etch lines in silicon at a width of 16 nanometers or more, compared with 5 nanometers for high-end chips.The bottleneck is that these mature chip-making lines are running flat out. Wu says the pandemic drove such strong demand that manufacturing partners can’t make enough display drivers for all the panels that go into computers, televisions and game consoles -- plus all the new products that companies are putting screens into, like refrigerators, smart thermometers and car-entertainment systems.There’s been a particular squeeze in driver ICs for automotive systems because they’re usually made on 8-inch silicon wafers, rather than more advanced 12-inch wafers. Sumco Corp., one of the leading wafer manufacturers, reported production capacity for 8-inch equipment lines was about 5,000 wafers a month in 2020 -- less than it was in 2017.No one is building more mature-node manufacturing lines because it doesn’t make economic sense. The existing lines are fully depreciated and fine-tuned for almost perfect yields, meaning basic display drivers can be made for less than a dollar and more advanced versions for not much more. Buying new equipment and starting off at lower yields would mean much higher expenses.“Building new capacity is too expensive,” Wu says. Peers like Novatek Microelectronics Corp., also based in Taiwan, have the same constraints.That shortfall is showing up in a spike in LCD prices. A 50-inch LCD panel for televisions doubled in price between January 2020 and this March. Bloomberg Intelligence’s Matthew Kanterman projects that LCD prices will keep rising at least until the third quarter. There is a “a dire shortage” of display driver chips, he said.Aggravating the situation is a lack of glass. Major glass makers reported accidents at their production sites, including a blackout at a Nippon Electric Glass Co.’s factory in December and an explosion at AGC Fine Techno Korea’s factory in January. Production will likely remain constrained at least through summer this year, display consultancy DSCC Co-founder Yoshio Tamura said.On April 1, I-O Data Device Inc., a major Japanese computer peripherals maker, raised the price of their 26 LCD monitors by 5,000 yen on average, the biggest increase since they began selling the monitors two decades ago. A spokeswoman said the company can’t make any profit without the increases due to rising costs for components.All of this has been a boon for business. Himax’s sales are surging and its stock price has tripled since November. The U.S.-traded shares gained 1.6% in New York Tuesday morning. Novatek’s shares closed up 5.6% in Taiwan to a record high, pushing its increase for the year to more than 60%.But Wu isn’t celebrating. His whole business is built around giving customers what they want, so his inability to meet their requests at such a critical time is frustrating. He doesn’t expect the crunch, especially for automotive components, to end any time soon.“We have not reached a position where we can see the light at the end of tunnel yet,” Wu said.(Updates with Himax shares in the third to last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- An investigation into illegal talent poaching by Beijing-based Bitmain Technologies Ltd. has revived fears Chinese companies will target Taiwan’s top engineers as their country works to build a world-class chipmaking industry.Investigators descended on the offices of Bitmain’s two Taiwan units and interviewed 19 people Tuesday in a probe into whether the crypto-mining startup had violated local laws, according to Chang Jui-chuan, a spokeswoman for the New Taipei District Prosecutors Office. The Chinese firm, which develops semiconductors for mining and other purposes, is suspected of illegally recruiting hundreds of engineers from Taiwanese firms over a period of three years. Taiwan prohibits firms from China from doing business or recruiting locally without prior approval, a measure intended to limit the influence of its political rival.The accusations against Bitmain spur concerns that Chinese firms will accelerate efforts to hire away Taiwan’s best engineers in a bid to achieve semiconductor self-sufficiency. Beijing has pledged to develop its own advanced chip manufacturing in order to dominate future technologies and cut its dependence on $300 billion of annual semiconductor imports.Read more: China to Pour More Money Into Chips, AI and 5G to Catch U.S.Taiwan’s deep pool of expertise revolves around Taiwan Semiconductor Manufacturing Co., the world’s leading chip fabricator and a supplier to most American tech giants from Apple Inc. to Nvidia Corp. U.S. and European companies like Alphabet Inc.’s Google and ASML Holding NV have set up engineering hubs and research bases to tap local talent.“China’s poaching of Taiwanese engineers undermines Taiwan’s semiconductor industry,” said Carol Lin, a law professor at the Hsinchu-based National Chiao Tung University, which is now part of the newly formed National Yang Ming Chiao Tung University. “Through the maneuver, Chinese competitors can learn about Taiwan companies’ progress. If these engineers bring trade secrets with them, Chinese rivals can have a firm grasp of Taiwan companies’ past success and failure in technological developments, and this could result in unfair competition and even endanger national security.”Beijing has denied Washington’s claims that it demands technology or talent transfers or targets the intellectual property of overseas firms. Bitmain representatives didn’t respond to multiple requests for comment.Read more: The World Is Dangerously Dependent on Taiwan for SemiconductorsBitmain’s actions are suspected of breaching Taiwan’s Act Governing Relations between the People of the Taiwan Area and the Mainland Area, Chang said. An article in the act stipulates that for-profit Chinese firms cannot set up units in Taiwan and conduct business activities -- including headhunting -- without approval from Taiwanese authorities, she added.A separate press statement from Chang’s office, while not identifying Bitmain by name, shed light on the allegations. In order to develop artificial intelligence chips, the Chinese startup created a new entity in China with a Taiwanese engineer as chairman. This engineer then recruited colleagues from his former company in Taiwan and formed a headhunting team to set up a research and development center in Taiwan, according to the statement. Chang confirmed the company in the press release was Bitmain.The team offered potential recruits double their existing salaries and advertised openly on Taiwanese job sites, the prosecutors said. The country’s top chip designer MediaTek Inc., a major rival to Qualcomm Inc., was affected by Bitmain’s recruitment drive, Taiwan’s Apple Daily reported. A MediaTek representative declined to comment.Taiwanese executives have accused Chinese rivals of aggressive poaching for years. In 2018, Taiwanese DRAM maker Nanya Technology Corp. President Lee Pei-ing said some of his engineers were being offered three to five times their current salaries by Chinese competitors. The typical practice was to first lure away a manager who would then go on to recruit more of his former colleagues, according to Lee.Beyond talent poaching, global firms with operations in Taiwan and local officials have accused Chinese companies of technology theft. In 2019, Taiwanese prosecutors indicted five people for leaking tech belonging to German chemical maker BASF SE to Jiangyin Jianghua Microelectronics Materials Co., while Micron Technology Inc. has sued Taiwan’s United Microelectronics Corp. and its Chinese partner Fujian Jinhua Integrated Circuit Co. for stealing trade secrets. Both Chinese companies have denied wrongdoing.Read more: Engineers Found Guilty of Stealing Micron Secrets for ChinaBitmain, the world’s largest crypto-mining equipment maker, has over the years tried to expand into AI chipmaking to cushion Bitcoin’s volatility, but the strategy divided its management. The company relies on TSMC’s foundry for semiconductor production.(Updates with employment forecast chart)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.