UMC Reports Second Quarter 2018 Results

1H results lead to EPS of NT$0.58 per share; MIFS acquisition to fuel long term growth

Second Quarter 2018 Overview1:

  • Revenue: NT$38.85 billion (US$1.28 billion)
  • Gross margin: 17.2%
  • Foundry revenue from 28nm: 15%; Foundry operating margin: 8.4%
  • Foundry capacity utilization rate: 97%
  • Net Income attributable to stockholders of the parent: NT$3.66 billion (US$120 million)
  • Earnings per share: NT$0.30; earnings per ADS: US$0.049

TAIPEI, Taiwan — (BUSINESS WIRE) — July 25, 2018United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the second quarter of 2018.

Second quarter consolidated revenue was NT$38.85 billion, up 3.6% QoQ from NT$37.50 billion in 1Q18 and 3.5% YoY from NT$37.54 billion in 2Q17. Consolidated gross margin for 2Q18 was 17.2%. Net income attributable to stockholders of the parent was NT$3.66 billion, with earnings per ordinary share of NT$0.30.

Jason Wang, co-president of UMC, said, “In the second quarter, foundry revenue increased 3.6% sequentially to NT$38.77 billion. Foundry operating margin was 8.4%. Overall capacity utilization reached 97%, bringing wafer shipments to 1.85 million 8-inch equivalent wafers. The operating results from 2Q18 reflected full utilization from 8" and mature 12" technologies, driven by strong demand in computing and communications segments. This led to a first half EPS of NT$0.58 while generating NT$13.42 billion in free cash flow. To further take advantage of this healthy demand situation, our Board of Directors approved for the company to supplement UMC’s mature 12" process capacity through the full acquisition of Fujitsu’s 300mm MIFS Semiconductor fab in Japan. The Board of Directors also approved a plan for our China-based operations to apply for listing on the Shanghai Stock Exchange, led by UMC’s HeJian.”

Co-president Wang continued, “We project third quarter demand outlook to remain flat due to rising inventory levels from slower smartphone digestion and the uncertainty surrounding the ongoing US-China trade tensions. Despite the current market situation, UMC has always focused on expanding our global scale to enhance customer value by providing a diversified manufacturing base across Asia that is also strategically positioned near our Taiwan headquarters for seamless logistical support. UMC’s intention to acquire MIFS Semiconductor and list our China operations on the Shanghai Stock Exchange corresponds with this global expansion strategy and will fuel our long-term foundry competitiveness. We will continue to strive for manufacturing excellence and better position ourselves globally to create benefits for our shareholders, customers and employees.”

1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending June 30, 2018, the three-month period ending March 31, 2018, and the equivalent three-month period that ended June 30, 2017. For all 2Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the June 30, 2018 exchange rate of NT$ 30.48 per U.S. Dollar.

Summary of Operating Results

Operating Results
(Amount: NT$ million)             2Q18     1Q18     QoQ %
    2Q17     YoY %
Net Operating Revenues             38,852     37,497     3.6     37,538     3.5
Gross Profit 6,675 4,642 43.8 6,739 (0.9)
Operating Expenses (5,213) (4,850) 7.5 (5,330) (2.2)
Net Other Operating Income and Expenses 1,719 977 75.9 259 563.7
Operating Income 3,181 769 313.7 1,668 90.7
Net Non-Operating Income and Expenses (1,095) 1,088 - 448 -
Net Income Attributable to Stockholders of the Parent 3,659 3,400 7.6 2,099 74.3

EPS (NT$ per share)

0.30 0.28 0.17

(US$ per ADS)

            0.049     0.046           0.028      

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