UMC Reports 2008 Third Quarter Results: Weak Global Economic Conditions Impact Business Performance (Revenue down 2%)

 

Note 5: Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp up.

CAPEX

CAPEX plans for 2008 are revised down to US$400-500 million. By the end of the third quarter, UMC's year-to-date CAPEX totaled US$308 million.

 


    UMC Capital Expenditure by Year -- in US$ billion

    Year         2007      2006       2005      2004      2003      2002
    CAPEX        $0.9      $1.0     $0.7(1)     $1.5      $0.4      $0.8



    2008 CAPEX Plan

               8"fab      12"fab        12"R&D                    Total
    UMC          16%         52%           32%       US$400-500 million

    (1) 2005 CAPEX contained UMC 2005 full year CAPEX and UMCi CAPEX during
        1Q05.


    Recent Developments / Announcements

    Oct. 27, 2008 UMC Announces Foundry Industry's First 28nm SRAMs
    Sep. 29, 2008 UMC Names Arthur Kuo as Senior Vice President of UMC-USA
    Sep. 08, 2008 UMC Selected as a Global Index Component for Down Jones
                  Sustainability Indexes
    Aug. 27, 2008 UMC Announces Share Buy-Back Program
    Aug. 04, 2008 UMC's Embedded DRAM, URAM(TM) Proven in 65nm Customer
                  Silicon

 

Please visit UMC's website http://www.umc.com/english/news/index.asp for further details regarding the above announcements.

 

    Fourth Quarter of 2008 Outlook & Guidance
    Quarter-over-quarter Guidance:

    -- Wafer Shipments: to decrease by approximately 25% points
    -- Wafer ASP in NT$: to increase by approximately 5% points
    -- Capacity Utilization Rates: approximately 55%
    -- Profitability: gross profit margin to be approximately 10%
    -- Sales breakdown by three major applications remains unchanged
    -- 2008 Capex Budget: US$400-500 million

    Conference Call / Webcast Announcement
    Wednesday, October 29, 2008
    Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 12:00 Noon (London)

    Dial-in numbers and Access Codes:
    USA Toll Free:             1 866 549 1292
    Hong Kong and Other Areas: +852 3005 2050

    Access Code: UMC

 

A live webcast and replay of the 3Q08 results announcement will be available at http://www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC) (TSE: 2303) is a leading global semiconductor foundry that provides advanced technology and manufacturing services for applications spanning every major sector of the IC industry. UMC's customer-driven foundry solution allow chip designers to leverage the strength of the company's leading-edge processes, which include production proven 65nm, 45/40nm, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. The company employs approximately 13,000 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web at http://www.umc.com .

Safe Harbor Statements

Except for statements in respect of historical matters, the statements in this release contain "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward- looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors, including, among other things: our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; the risks associated with international global business activities; our dependence upon key personnel; general economic and political conditions, including those related to the semiconductor, communications, consumer electronics and computer industries; possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; reduced end-user purchases relative to expectations and orders; fluctuations in foreign currency exchange rates; and those risks identified in the section entitled "Risk Factors" in UMC's Annual Report on Form 20-F ("20-F") for the year ended December 31, 2007 filed with the U.S. Securities and Exchange Commission on May 2, 2008.

The financial statements included in this release are unaudited and unconsolidated, and prepared and published in accordance with ROC GAAP. Investors are cautioned that there are many differences between ROC GAAP and US GAAP, as described in note 35 to the financial statements on 20-F.

The forward-looking statements in this release reflect the current belief of UMC as of the date of this release and UMC undertakes no obligation to update these forward-looking statements for events or circumstances that occur after such date or to reflect the occurrence of unanticipated events.

 

                       -- FINANCIAL TABLES TO FOLLOW --



                       UNITED MICROELECTRONICS CORPORATION
                 Unaudited Condensed Unconsolidated Balance Sheet
                               As of Sep 30, 2008
       Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                          Sep 30, 2008

                                                US$          NT$           %
     ASSETS
     Current Assets
      Cash and Cash Equivalents                 782       25,194       11.2%
      Financial assets at fair value
       through profit or loss, current           60        1,939          0.9%
            Notes  &  Accounts  Receivable                              438              14,120                6.3%
            Inventories                                                              365              11,762                5.2%
            Other  Current  Assets                                              58                1,877                0.8%
                  Total  Current  Assets                                  1,703              54,892              24.4%

          Non-Current  Assets
            Funds  and  Long-term  Investments                  1,616              52,061              23.2%
            Property,  Plant  and  Equipment                      3,326            107,171              47.7%
            Intangible  Assets                                                  116                3,745                1.7%
            Other  Assets                                                            207                6,654                3.0%
                  Total  Non-Current  Assets                          5,265            169,631              75.6%
          TOTAL  ASSETS                                                          6,968            224,523            100.0%

          LIABILITIES
          Current  Liabilities
            Financial  liabilities  at  fair  value
              through  profit  or  loss,  current                        6                    176                0.1%
            Payables                                                                    441              14,221                6.3%
            Other  Current  Liabilities                                      7                    239                0.1%
                  Total  Current  Liabilities                            454              14,636                6.5%

          Non-Current  Liabilities
            Bonds  Payable                                                          233                7,496                3.3%
            Other  Liabilities                                                  115                3,721                1.7%
                  Total  Non-Current  Liabilities                    348              11,217                5.0%
          TOTAL  LIABILITIES                                                    802              25,853              11.5%

          STOCKHOLDERS'  EQUITY
          Capital  Stock                                                        4,203            135,435              60.3%
          Additional  Paid-in  Capital                              1,872              60,321              26.9%
          Retained  Earnings,  Unrealized  Gain
            on  Financial  Assets  and
            Translation  Adjustment                                        372              11,995                5.3%
          Treasury  Stock                                                        (281)            (9,081)            (4.0%)
          TOTAL  STOCKHOLDERS'  EQUITY                              6,166            198,670              88.5%
          TOTAL  LIABILITIES  AND  STOCKHOLDERS'
            EQUITY                                                                    6,968            224,523            100.0%

          Note:  New  Taiwan  Dollars  have  been  translated  into  U.S.  Dollars  at
                      the  September  30,  2008  exchange  rate  of  NT  $32.22  per  U.S.
                      Dollar.

                      All  figures  are  in  ROC  GAAP.



                                        UNITED  MICROELECTRONICS  CORPORATION
                        Unaudited  Condensed  Unconsolidated  Income  Statement
            Figures  in  Million  of  New  Taiwan  Dollars  (NT$)  and  U.S.  Dollars  (US$)
                                          Except  Per  Share  and  Per  ADS  Data

                                                                                        Year  over  Year  Comparison

                                                                                  Three-Month  Period  Ended

                                                                                Sep  30,  2008        Sep  30,  2007              %
                                                                                US$            NT$        US$            NT$          Chg.
        Net  Sales                                                      768      24,748        963      31,028      (20.2%)
        Cost  of  Goods  Sold                                  (633)  (20,380)    (708)  (22,805)    (10.6%)
        Net  Gross  Profit                                        135        4,368        255        8,223      (46.9%)
                                                                            17.6%        17.6%    26.5%        26.5%              --
        Operating  Expenses
            --  Sales  &  Marketing                              21            673          29            922      (27.0%)
            --  General  &  Administrative                20            639          23            753      (15.1%)
            --  Research  &  Development                    65        2,109          72        2,313        (8.8%)
                                                                                106        3,421        124        3,988      (14.2%)
        Operating  Income  (Loss)                            29            947        131        4,235      (77.6%)
                                                                              3.8%          3.8%    13.6%        13.6%              --

        Net  Non-Operating  Income
          (Expenses)                                                  (65)    (2,105)      179        5,764    (136.5%)
        Income  (Loss)  from  continuing
          operations  before  income  tax              (36)    (1,158)      310        9,999    (111.6%)
                                                                            (4.7%)      (4.7%)  32.2%        32.2%              --

        Income  Tax  (Expense)  Benefit                  (8)        (255)      (23)        (766)    (66.7%)
        Net  Income  (Loss)                                      (44)    (1,413)      287        9,233    (115.3%)
                                                                            (5.7%)      (5.7%)  29.8%        29.8%              --

        Earnings  per  Share                              (0.003)      (0.11)  0.017          0.55              --
        Earnings  per  ADS  (2)                          (0.017)      (0.55)  0.085          2.75              --
        Weighted  Average  Number  of  Shares
          Outstanding  (in  millions)                      --      13,130          --      15,412              --




                                        UNITED  MICROELECTRONICS  CORPORATION
                        Unaudited  Condensed  Unconsolidated  Income  Statement
            Figures  in  Million  of  New  Taiwan  Dollars  (NT$)  and  U.S.  Dollars  (US$)
                                          Except  Per  Share  and  Per  ADS  Data


                                                                                Quarter  over  Quarter  Comparison

                                                                            Three-Month  Period  Ended

                                                                            Sep  30,  2008        Jun  30,  2008                  %
                                                                            US$            NT$        US$            NT$              Chg.
        Net  Sales                                                  768      24,748        783      25,238            (1.9%)
        Cost  of  Goods  Sold                              (633)  (20,380)    (603)  (19,443)            4.8%
        Net  Gross  Profit                                    135        4,368        180        5,795          (24.6%)
                                                                        17.6%        17.6%    23.0%        23.0%                  --
        Operating  Expenses
            -  Sales  &  Marketing                            21            673          19            620              8.6%
            -  General  &  Administrative              20            639          23            744          (14.1%)
            -  Research  &  Development                  65        2,109          65        2,090              0.9%
                                                                            106        3,421        107        3,454            (1.0%)
        Operating  Income  (Loss)                        29            947          73        2,341          (59.5%)
                                                                          3.8%          3.8%      9.3%          9.3%                  --

        Net  Non-Operating  Income
          (Expenses)                                              (65)    (2,105)          3            120    (1,854.2%)
        Income  (Loss)  from  continuing
          operations  before  income  tax          (36)    (1,158)        76        2,461        (147.1%)
                                                                        (4.7%)      (4.7%)    9.8%          9.8%                  --

        Income  Tax  (Expense)  Benefit              (8)        (255)        (2)          (64)        298.4%
        Net  Income  (Loss)                                  (44)    (1,413)        74        2,397        (158.9%)
                                                                        (5.7%)      (5.7%)    9.5%          9.5%                  --

        Earnings  per  Share                          (0.003)      (0.11)  0.006          0.18                  --
        Earnings  per  ADS  (2)                      (0.017)      (0.55)  0.028          0.90                  --
        Weighted  Average  Number  of  Shares
          Outstanding  (in  millions)                  --      13,130          --      13,172                  --

        Note:
        (1)  New  Taiwan  Dollars  have  been  translated  into  U.S.  Dollars  at  the
                September  30,  2008  exchange  rate  of  NT$32.22  per  U.S.  Dollar.
                All  figures  are  in  ROC  GAAP.
        (2)  1  ADS  equals  5  common  shares.



                                              UNITED  MICROELECTRONICS  CORPORATION
                              Unaudited  Condensed  Unconsolidated  Income  Statement
            Figures  in  Million  of  New  Taiwan  Dollars  (NT$)  and  U.S.  Dollars  (US$)
                                                Except  Per  Share  and  Per  ADS  Data

                                                              For  the  Three-Month
                                                                    Period  Ended                    For  the  year  Ended
                                                                    Sep  30,  2008                          Sep  30,  2008

                                                                US$            NT$            %            US$            NT$            %
        Net  Sales                                      768      24,748    100.0%      2,296      73,989    100.0%
        Cost  of  Goods  Sold                  (633)  (20,380)  (82.4%)  (1,870)  (60,250)  (81.4%)
        Net  Gross  Profit                        135        4,368      17.6%          426      13,739      18.6%


        Operating  Expenses
            -  Sales  &  Marketing                21            673        2.7%            62        2,009        2.7%
            -  General  &
              Administrative                        20            639        2.6%            63        2,019        2.7%
            -  Research  &
              Development                              65        2,109        8.5%          193        6,233        8.5%
                                                                106        3,421      13.8%          318      10,261      13.9%
        Operating  Income  (Loss)            29            947        3.8%          108        3,478        4.7%

        Net  Non-Operating  Income
          (Expenses)                                  (65)    (2,105)    (8.5%)        (59)    (1,914)    (2.6%)
        Income  (Loss)  from
          continuing  operations
          before  income  tax                    (36)    (1,158)    (4.7%)          49        1,564        2.1%

        Income  Tax  (Expense)
          Benefit                                          (8)        (255)    (1.0%)        (12)        (374)    (0.5%)
        Net  Income  (Loss)                      (44)    (1,413)    (5.7%)          37        1,190        1.6%

        Earnings  per  Share              (0.003)      (0.11)          --      0.003          0.09            --
        Earnings  per  ADS  (2)          (0.017)      (0.55)          --      0.014          0.45            --

        Weighted  Average  Number
          of  Shares  Outstanding
          (in  millions)                              --      13,130            --            --      13,158            --

        Note:
        (1)  New  Taiwan  Dollars  have  been  translated  into  U.S.  Dollars  at  the
                September  30,  2008  exchange  rate  of  NT$32.22  per  U.S.  Dollar.    All
                figures  are  in  ROC  GAAP.
        (2)  1  ADS  equals  5  common  shares.



                                              UNITED  MICROELECTRONICS  CORPORATION
                        Unaudited  Condensed  Unconsolidated  Statement  of  Cash  Flows
                                            For  The  Nine  Months  Ended  Sep  30,  2008
              Figures  in  Million  of  New  Taiwan  Dollars  (NT$)  and  U.S.  Dollars  (US$)

                                                                                                              USD                      NTD

        Cash  flows  from  operating  activities
          Net  Income                                                                                  37                  1,190
          Depreciation  &  Amortization                                              876                28,233
          Loss  on  decline  in  market  value
            and  obsolescence  of  inventories                                      11                      369
          Cash  dividends  received  under  the
            equity  method                                                                          15                      493
          Investment  loss  accounted  for
            under  the  equity  method                                                        2                        50
          Loss  on  valuation  of  financial
            assets  and  liabilities                                                        85                  2,744
          Impairment  loss                                                                      103                  3,308
          Gain  on  disposal  of  investments                                      (55)              (1,787)
          Gain  on  disposal  of  property,
            plant  and  equipment                                                              (1)                    (26)
          Exchange  gain  on  financial  assets
            and  liabilities                                                                      (0)                      (8)
          Exchange  gain  on  long-term  liabilities                          (5)                  (179)
          Amortization  of  bond  discounts                                            0                          7
          Amortization  of  deferred  income                                        (4)                  (124)
          Change  in  assets,  liabilities  and  others                    (69)              (2,224)
        Net  cash  provided  by  operating  activities                    995                32,046

        Cash  flows  from  investing  activities:
          Proceeds  from  disposal  of
            available-for-sales  financial  assets                            60                  1,939
          Acquisition  of  financial  assets
            measured  at  cost                                                                    (7)                  (216)
          Acquisition  of  long-term
              investments  accounted  for  under
              the  equity  method                                                              (45)              (1,445)
          Proceeds  from  liquidation  of
            long-term  investments                                                            6                      198
          Acquisition  of  property,  plant
            and  equipment                                                                      (308)              (9,951)
          Proceeds  from  disposal  of
            property,  plant  and  equipment                                            3                      107
          Increase  in  deferred  charges                                            (19)                  (628)
          Decrease  in  other  assets  --  others                                    0                          2
        Net  cash  used  in  investing  activities                          (310)              (9,994)

        Cash  flows  from  financing  activities:
                Redemption  of  bonds                                                      (705)            (22,717)
                Cash  dividends                                                                (291)              (9,383)
                Payment  of  employee  bonus                                              (9)                  (286)
                Remuneration  paid  to  directors
                  and  supervisors                                                                (0)                    (12)
                Purchase  of  treasury  stock                                          (65)              (2,087)
                Decrease  in  deposits-in                                                  (0)                      (6)
        Net  cash  used  in  financing  activities                      (1,070)            (34,491)

        Effect  of  exchange  rate  changes  on
          cash  and  cash  equivalents                                                      5                      180
        Net  decrease  in  cash  and  cash  equivalents                  (380)            (12,259)

        Cash  and  cash  equivalents  at
          beginning  of  period                                                          1,162                37,453

        Cash  and  cash  equivalents  at  end  of  period                  782                25,194


        Note:  (1)  New  Taiwan  Dollars  have  been  translated  into  U.S.  Dollars  at  the
                            September  30,  2008  exchange  rate  of  NT$32.22  per  U.S.  Dollar.
                            All  figures  are  in  ROC  GAAP.

        Contacts:

          Bowen  Huang  or  I  Cheng  Lu
          UMC,  Investor  Relations
          Tel:      +886-2-2700-6999  ext.  6957
          Email:  bowen_huang@umc.com  or  i_cheng_lu@umc.com
 

Web site: http://www.umc.com/



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