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TSMC, UMC July sales: no better than June

Where did the recovery go

If the semiconductor industry is going to recover during the second half of the year, it had better get a move on. Initial data from the world's top two chip foundries, TSMC and UMC, suggest the turnaround hasn't started yet.

TSMC's line is that its sales bottomed out in May and June, and July's increase is the first sign of recovery. Some turnaround - July's sales of NT$8.64 billion ($249.93 million) were up a mere 1.6 per cent on June's NT$8.50 billion. TSMC reckons sales will increase during August, but whether by a significant margin remains to be seen. Certainly the June-July increase isn't much to shout about.

UMC fared rather badly, with July sales down 8.6 per cent on June's figure. The company recorded sales of NT$4.24 billion in June, but only NT$3.87 billion in July. It expects Q3 sales to decrease 10-15 per cent on Q2's total of NT$15 billion.

Clearly, demand remains low, and TSMC is arguably keeping its head above water simply by being the market leader. If UMC's results are a good measure of the market, they don't bode well for TSMC's ability to experience much growth through the rest of the quarter.

UMC today said its 300mm wafer fab, Fab 12A, is succeeding in churning out more and more chips, month on month, and should be punching out 5000 30mm wafers by year's end. Output will be increased throughout 2002, peaking at 20,000 wafers - out of a maximum capacity of 40,000 - by the end of next year.

Impressive numbers, to be sure, but as yet there's no sign anyone will want to buy any of the processors the plant will produce. ®

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