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United Microelectronics (UMC), a Taipei-based contract chip maker, provided further evidence this morning of just how slow things are in the semiconductor sector.

UMC posted Q4 revenues of $566 million, a bit below the Street consensus of $569.4 million, down 25.1% sequentially and off 32.9% year over year. The company suffered a loss of 27.6 cents a share in the quarter, much worse than the Street consensus view of a loss of 2 cents, although some of that difference reflects a variety of special one-time charges.

United Microelectronics (UMC), a Taiwan-based contact chip manufacturer, said its sales in November were down 23.8% from October, and 33.4% from the same month last year. The company said it now expects Q4 revenue of NT$18.2 billion to NT$18.7 billion, with gross profit margin of 7%-9%. The company had previously been expecting 10% gross margins in the quarter. The company said its guidance reflects “weak semiconductor demand resulting from the global economic recession and wafer shipments being pushed out.”

Given mounting evidence of weakness in the chip sector, you can imagine some difficult times ahead in the contract fab business, as well. And that explains today’s move by Merrill Lynch analyst Daniel Helyer, who cut estimates today on 10 contract semiconductor manufacturers.

Taiwan-based contract chip maker United Microelectronics (UMC) confirmed that Taiwanese prosecutors have been to its offices as part of an investigation into the company’s investments, according to Reuters.