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UMC Reports Second Quarter 2016 Results

2Q16 28nm revenue more than doubled QoQ, foresee 3Q16 28nm contribution to hit 20%

Second Quarter 2016 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — July 27, 2016 — United 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 2016.

Second quarter consolidated revenue was NT$37.00 billion, up 7.5% quarterly from NT$34.40 billion in 1Q16 and down 2.7% YoY from NT$38.01 billion in 2Q15. 2Q16 consolidated gross margin was 22.4%. Net income attributable to the stockholders of the parent was NT$2.58 billion, with earnings per ordinary share of NT$0.21.

Mr. Po-Wen Yen, CEO of UMC, said “In the second quarter of 2016, our foundry revenue increased 7.5% sequentially to NT$36.87 billion. We achieved foundry operating margin of 7.1%. Overall capacity utilization was 89%, bringing wafer shipments to 1.51 million 8-inch equivalent wafers. As the latest semi inventory cycle came to an end, 2Q16 reflected a return to semiconductor seasonality as chip demand improved. As a result, UMC experienced a surge in 28nm business, especially from communication customers. Many of the chips found in the newly released smartphone models have adopted our 28nm solutions, which helped trigger our 28nm revenue growth that began in 2Q16. For the consumer segment, UMC has also delivered other 28nm volume production ICs in areas such as DTV and set top box to help further boost 28nm utilization. The widespread adoption of our 28nm process technologies underscores the technology readiness and value that UMC provides to the IC industry.”

CEO Yen continued, “Looking into next quarter, we anticipate a slight increase to our overall foundry revenue, with 28nm revenue contribution expected to reach 20% or more. Our 40nm demand is also expected to remain stable. As our advanced node performance remains on track, we do anticipate a decline in 8” demand due to changes in customer mix and market dynamics. While we continue to expand additional 28nm capacity at Fab 12A in Tainan, UMC’s 12” Xiamen operations, 12X, is set to begin pilot production. As such, UMC will accrue higher quarterly depreciation and operating expenses. However, we expect our high 28nm utilization rate and the revenue recognition when 12X enters production at year’s end to somewhat offset a portion of the accrued depreciation and operating expense. We foresee 12X to aggressively capitalize on the fast growing Chinese semiconductor market and provide our customers with a viable solution for local foundry services in China. We believe 12X will play a key role as a critical manufacturing base as it ramps to economy of scale”

Summary of Operating Results

Operating Results
(Amount: NT$ million)   2Q16   1Q16   QoQ %
change 		  2Q15   YoY %
change
Net Operating Revenues   36,997   34,404   7.5   38,012   (2.7)
Gross Profit 8,285 5,034 64.6 8,723 (5.0)
Operating Expenses (5,859) (5,065) 15.7 (4,864) 20.5
Net Other Operating Income and Expenses 23 15 53.3 17 35.3
Operating Income (Loss) 2,449 (16) - 3,876 (36.8)
Net Non-Operating Income and Expenses (650) 46 - 1,304 -
Net Income Attributable to Stockholders of the Parent 2,583 210 1,130.0 4,600 (43.8)
EPS (NT$ per share) 0.21 0.02 0.37
(US$ per ADS)   0.033   0.003       0.057    

Consolidated revenues in 2Q16 increased 7.5% sequentially to NT$37.00 billion, including NT$36.87 billion from the foundry segment, with 17% of contribution from 28nm technologies. Gross profit reached NT$8.29 billion, or 22.4% of revenue, up 64.6% compared to 1Q16. Operating expenses increased 15.7% sequentially to NT$5.86 billion, and net other operating income was NT$23 million, leading to an operating income of NT$2.45 billion. Net non-operating expenses was NT$650 million. Net income attributable to stockholders of the parent in 2Q16 was NT$2.58 billion.

Earnings per ordinary share for the quarter was NT$0.21. Earnings per ADS was US$0.033. The basic weighted average number of outstanding shares in 2Q16 was 12,334,888,329, compared with 12,408,239,978 shares in 1Q16 and 12,572,497,200 shares in 2Q15. The diluted weighted average number of outstanding shares was 13,460,073,526 in 2Q16, compared with 12,492,270,589 shares in 1Q16 and 13,222,544,584 shares in 2Q15. The fully diluted share count on June 30, 2016 was approximately 13,749,505,000. On June 30, 2016, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

Consolidated revenues increased 7.5% sequentially to NT$37.00 billion, driven by stronger demand for 28nm and 40nm shipments. Depreciation increased 8.1% in 2Q16 mainly from 28nm capacity deployment. Other manufacturing costs decreased 7.9% to NT$17.45 billion QoQ, since in 1Q16 there were higher manufacturing costs associated with the February 6 earthquake, leading to a total of NT$28.71 billion in cost of goods sold. Gross profit increased to NT$8.29 billion, up 64.6% sequentially. Operating expenses increased 15.7%, mainly from NT$1.54 billion in G&A expense that includes 12X setup costs. Sales & marketing expenses increased 8.1% to NT$1.09 billion. R&D expenses represented 8.7% of operating revenues. Operating income in 2Q16 reached NT$2.45 billion.

COGS & Expenses
(Amount: NT$ million)   2Q16   1Q16   QoQ %
change 		  2Q15   YoY %
change
Net Operating Revenues   36,997   34,404   7.5   38,012   (2.7)
COGS (28,712) (29,370) (2.2) (29,289) (2.0)
Depreciation (11,264) (10,424) 8.1 (9,404) 19.8
Other Mfg. Costs (17,448) (18,946) (7.9) (19,885) (12.3)
Gross Profit 8,285 5,034 64.6 8,723 (5.0)
Gross Margin (%) 22.4% 14.6% 22.9%
Operating Expenses (5,859) (5,065) 15.7 (4,864) 20.5
G&A (1,541) (970) 58.9 (919) 67.7
Sales & Marketing (1,092) (1,010) 8.1 (930) 17.4
R&D (3,226) (3,085) 4.6 (3,015) 7.0
Net Other Operating

Income & Expenses

23 15 53.3 17 35.3
Operating Income (Loss)   2,449  

(16)

  -  

3,876

  (36.8)

Net non-operating expenses in 2Q16 was NT$650 million, including a NT$548 million gain on disposal of investment, which was mainly offset by a NT$504 million net investment loss and a NT$501 million exchange loss.

Non-Operating Income and Expenses
(Amount: NT$ million)   2Q16   1Q16   2Q15
Non-Operating Income and Expenses   (650)   46   1,304
Net Interest Income and Expenses (154) (57) (46)
Net Investment Gain and Loss (504) (14) (247)
Gain and Loss on Disposal of Investment 548 223 1,319
Exchange Gain and Loss (501) (167) 11
Other Gain and Loss   (39)   61   267

Cash inflow from operating activities was NT$5.62 billion. Cash outflow from investing activities totaled NT$27.11 billion, including NT$29.31 billion in CAPEX spending, resulting in a free cash outflow of NT$23.69 billion. Cash inflow from financing activities was NT$11.15 billion, primarily due to NT$13.55 billion in bank loans and NT$2.40 billion in treasury stock purchase. Net cash outflow for 2Q16 was NT$10.12 billion. Over the next 12 months, the company expects to repay NT$4.00 billion in bank loans.

Cash Flow Summary

(Amount: NT$ million)   For the 3-Month Period Ended

Jun. 30, 2016

    For the 3-Month Period Ended

Mar. 31, 2016

Cash Flow from Operating Activities   5,618     11,398
Net income before tax 1,799 30
Depreciation & Amortization 13,040 12,665
Gain on disposal of investments (548) (223)
Impairment loss on financial assets 395 90
Exchange loss (gain) on financial assets and liabilities 315 (108)
Changes in working capital (9,330) (690)
Other (53) (366)
Cash Flow from Investing Activities (27,113) (19,252)
Capital expenditures (29,307) (20,487)
Proceeds from disposal of AFS financial assets 808 642
Proceeds from disposal of financial assets measured at cost - 519
Changes in refundable deposits (581) 459
Acquisition of intangible assets (219) (452)
Other 2,186 67
Cash Flow from Financing Activities 11,152 14,538
Bank loans 13,548 910
Increase in other financial liabilities - 13,634
Treasury stock acquired (2,396) -
Other (0) (6)
Effect of Exchange Rate 227 (433)
Net Cash Flow   (10,116)     6,251

Cash and cash equivalents decreased to NT$49.43 billion, mostly due to free cash outflow of NT$23.69 billion, which was offset by NT$13.55 billion in bank loans. The days of inventory increased one day to 53 days.

Current Assets
(Amount: NT$ billion)   2Q16   1Q16   2Q15
Cash and Cash Equivalents   49.43   59.54   64.05
Notes & Accounts Receivable 24.53 19.65 21.44
Days Sales Outstanding 54 52 50
Inventories, net 17.59 15.84 16.05
Days of Inventory 53 52 49
Total Current Assets   103.60   101.92   109.22

Current liabilities increased to NT$80.05 billion, primarily reflecting the increase in short-term credit, payable on equipment and dividends payable. The reclassification of long-term bonds to short-term bonds reduced long-term credit/bonds to NT$40.47 billion. Total liabilities increased to NT$148.15 billion, leading to a debt to equity ratio of 67%.

Liabilities
(Amount: NT$ billion)   2Q16   1Q16   2Q15
Total Current Liabilities   80.05   41.63   43.49
Notes & Accounts Payable 7.58 6. 32 6.47
Short-Term Credit / Bonds 33.48 11.74 5.33
Payable on Equipment 14.94 8.25 9.30
Dividends payable 6.91 - 6.94
Other 17.14 15.32 15.45
Long-Term Credit / Bonds 40.47 48.72 50.75
Long-Term Investment Liabilities 18.80 19.28 5.98
Total Liabilities 148.15 116.49 106.87
Debt to Equity   67%   51%   48%

Analysis of Revenue2 for Foundry Segment

Revenue from North America and Asia Pacific accounted for 49% and 45% of 2Q16 sales, respectively.

Revenue Breakdown by Region
Region   2Q16   1Q16   4Q15   3Q15   2Q15
North America   49%   48%   47%   45%   46%
Asia Pacific   45%   45%   37%   41%   42%
Europe   4%   3%   6%   6%   6%
Japan   2%   4%   10%   8%   6%

Revenue from advanced 12” technologies contributed 43% of 2Q16 revenue, including 17% from 28nm and 26% from 40nm.

Revenue Breakdown by Geometry
Geometry   2Q16   1Q16   4Q15   3Q15   2Q15
28nm and below   17%   8%   11%   10%   11%
28nm<x<=40nm   26%   29%   24%   25%   22%
40nm<x<=65nm   18%   19%   23%   21%   21%
65nm<x<=90nm   4%   4%   4%   4%   6%
90nm<x<=0.13um   11%   12%   12%   14%   14%
0.13um<x<=0.18um   12%   13%   11%   11%   12%
0.18um<x<=0.35um   9%   12%   12%   12%   11%
0.5um and above   3%   3%   3%   3%   3%

Fabless customers accounted for 93% of revenue in 2Q16.

Revenue Breakdown by Customer Type
Customer Type   2Q16   1Q16   4Q15   3Q15   2Q15
Fabless   93%   91%   85%   88%   89%
IDM   7%   9%   15%   12%   11%

Revenue from the communication segment increased to 55% of sales mainly driven by strong demand in smartphone related ICs. Consumer applications constituted 27% of sales.

Revenue Breakdown by Application (1)
Application   2Q16   1Q16   4Q15   3Q15   2Q15
Computer   11%   15%   11%   11%   12%
Communication   55%   48%   52%   55%   55%
Consumer   27%   30%   29%   27%   28%
Others   7%   7%   8%   7%   5%

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) increased in 2Q16.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q16_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer shipments increased 5.7% to 1,514K in 2Q16. Quarterly capacity increased 1.8% QoQ to 1,723K, leading to an overall utilization rate of 89% for 2Q16.

Wafer Shipments
    2Q16   1Q16   4Q15   3Q15   2Q15
Wafer Shipments
(8” K equivalents) 		  1,514   1,432   1,384   1,467   1,536
 
Quarterly Capacity Utilization Rate
    2Q16   1Q16   4Q15   3Q15   2Q15
Utilization Rate   89%   82%   83%   89%   94%
Total Capacity
(8” K equivalents) 		  1,723   1,692   1,690   1,685   1,659

Capacity4 for Foundry Segment

Overall capacity in the second quarter increased to 1,723K 8-inch equivalent wafers. Estimated capacity in the third quarter will increase by approximately 3.0% sequentially to 1,774K 8-inch equivalent wafers, mainly due to capacity deployment at Fab 12A and Fab 12i.

Annual Capacity in

thousands of wafers

    Quarterly Capacity in

thousands of wafers

FAB   Geometry
(um) 		  2015   2014   2013   2012 FAB   3Q16E   2Q16   1Q16   4Q15
WTK 6"   3.5 – 0.45   311   -   -   - WTK   106   106   105   99
Fab 6A 6"   3.5 – 0.45   111   448   448   481 Fab 8A   207   207   206   204
Fab 8A 8"   0.5 – 0.25   813   813   813   815 Fab 8C   87   87   87   87
Fab 8C 8"   0.35 – 0.11   347   347   347   360 Fab 8D   86   86   85   86
Fab 8D 8"   0.13 – 0.09   341   358   382   371 Fab 8E   105   105   104   105
Fab 8E 8"   0.5 – 0.18   418   418   418   449 Fab 8F   102   100   97   98
Fab 8F 8"   0.18 – 0.11   388   388   388   389 Fab 8S   84   84   84   84
Fab 8S 8"   0.18 – 0.11   335   335   335   348 Fab 8N   188   188   187   183
Fab 8N 8"   0.5 – 0.13   667   547   469   - Fab 12A   233   214   205   206
Fab 12A 12"   0.18 – 0.028   793   700   651   579 Fab 12i   148   144   144   144
Fab 12i 12”   0.13 – 0.040   572   573   550   537 Total   1,774   1,723   1,692   1,690
Total(1)   6,617   6,323   6,107   5,514        

YoY Growth Rate

  5%   4%   11%   4%

2012 figures account for UMC parent company only.

(1)One 6-inch wafer is converted into 0.5625(62/82) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(122/82) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

CAPEX spending in 2Q16 totaled US$904 million, bringing first half spending to US$1.5 billion. Full year 2016 CAPEX plan is budgeted for US$2.2 billion.

Capital Expenditure by Year - in US$ billion
Year   2015   2014   2013   2012   2011
CAPEX   $ 1.9   $ 1.4   $ 1.1   $ 1.7   $ 1.6

2011~2012 figures account for UMC parent company only.

 

2016 CAPEX Plan

8"   12"   Total
5%   95%   US$2.2 billion

Third Quarter of 2016 Outlook & Guidance

Quarter-over-Quarter Guidance:

Recent Developments / Announcements

Jun 7, 2016  

Shareholders Approve NT$0.55 Cash Dividend at Annual Shareholders’ Meeting

May 24, 2016 UMC Holds 2016 Japan Technology Forum
May 12, 2016 UMC Statement Regarding Recent Taiwan Earthquake
Apr 29, 2016 UMC Fab 12i Receives ISO 22301 BCM Certification
Apr 27, 2016 UMC 1Q 2016 Financial Results

Please visit UMC’s website for further details regarding the above announcements

Conference Call / Webcast Announcement

Wednesday, July 27, 2016

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:

USA Toll Free: 1-800 871-3110, 1-888 700-7397

Taiwan Number: 02-2192-8016

Other Areas: +886-2-2192-8016

Access Code: UMC

A live webcast and replay of the 2Q16 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s robust foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include volume production 28nm gate-last High-K/Metal Gate technology, ultra-low power platform processes specifically engineered for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for production of ICs found in cars. UMC’s 10 wafer fabs are strategically located throughout Asia and are able to produce over 500,000 wafers per month. The company employs more than 17,000 people worldwide, with offices in Taiwan, mainland China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

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, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

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 Jun 30, 2016, the three-month period ending Mar 31, 2016, and the equivalent three-month period that ended Jun 30, 2015. For all 2Q16 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Jun 30, 2016 exchange rate of NT$ 32.27 per U.S. Dollar.

2 Revenue in this section represents wafer sales

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

4 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.

- FINANCIAL TABLES TO FOLLOW -

 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of June 30, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
 
June 30, 2016
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 1,532 49,425 13.4%
Financial assets at fair value through profit or loss, current 21 666 0.2%
Notes & Accounts receivable, net 760 24,533 6.7%
Inventories, net 545 17,593 4.8%
Other current assets 353 11,386 3.1%
Total current assets 3,211 103,603 28.2%
 
Non-current assets
Funds and investments 1,182 38,146 10.4%
Property, plant and equipment 6,440 207,826 56.5%
Other non-current assets 561 18,102 4.9%
Total non-current assets 8,183 264,074 71.8%
Total assets 11,394 367,677 100.0%
 
Liabilities
Current liabilities
Short-term loans 681 21,991 6.0%
Financial liabilities at fair value through profit or loss, current 0 3 0.0%
Payables 1,175 37,932 10.3%
Dividends payable 214 6,907 1.9%
Current portion of long-term liabilities 356 11,494 3.1%
Other current liabilities 55 1,723 0.5%
Total current liabilities 2,481 80,050 21.8%
 
Non-current liabilities
Bonds payable 1,063 34,309 9.3%
Long-term loans 191 6,166 1.7%
Other non-current liabilities 856 27,625 7.5%
Total non-current liabilities 2,110 68,100 18.5%
Total liabilities 4,591 148,150 40.3%
 
Equity
Equity attributable to the parent company
Capital 3,912 126,243 34.3%
Additional paid-in capital 1,270 40,988 11.1%
Retained earnings, unrealized gain or loss on available-for-sale

financial assets and exchange differences on translation of

foreign operations

1,709 55,142 15.1%
Treasury stock (146) (4,719) (1.3%)
Total equity attributable to the parent company 6,745 217,654 59.2%
Non-controlling interests 58 1,873 0.5%
Total equity 6,803 219,527 59.7%
Total liabilities and equity 11,394 367,677 100.0%
 
 
 
 
 
 
           
Note：New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2016 exchange rate of NT $32.27 per U.S. Dollar.
 
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
               
 
Year over Year Comparison Quarter over Quarter Comparison
Three-Month Period Ended Three-Month Period Ended
June 30, 2016 June 30, 2015 Chg. June 30, 2016 March 31, 2016 Chg.
US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %
Net operating revenues 1,146 36,997 1,178 38,012 (2.7%) 1,146 36,997 1,066 34,404 7.5%
Operating costs (889) (28,712) (908) (29,289) (2.0%) (889) (28,712) (910) (29,370) (2.2%)
Gross profit 257 8,285 270 8,723 (5.0%) 257 8,285 156 5,034 64.6%
22.4% 22.4% 22.9% 22.9% 22.4% 22.4% 14.6% 14.6%
Operating expenses
- Sales and marketing expenses (34) (1,092) (29) (930) 17.4% (34) (1,092) (31) (1,010) 8.1%
- General and administrative expenses (48) (1,541) (29) (919) 67.7% (48) (1,541) (30) (970) 58.9%
- Research and development expenses (100) (3,226) (93) (3,015) 7.0% (100) (3,226) (96) (3,085) 4.6%
Subtotal (182) (5,859) (151) (4,864) 20.5% (182) (5,859) (157) (5,065) 15.7%
Net other operating income and expenses 1 23 1 17 35.3% 1 23 1 15 53.3%
Operating income (loss) 76 2,449 120 3,876 (36.8%) 76 2,449 (0) (16) -
6.6% 6.6% 10.2% 10.2% 6.6% 6.6% (0.1%) (0.1%)
 
Net non-operating income and expenses (20) (650) 41 1,304 - (20) (650) 1 46 -
Income from continuing operations before

income tax

56 1,799 161 5,180 (65.3%) 56 1,799 1 30 5,896.7%
4.9% 4.9% 13.6% 13.6% 4.9% 4.9% 0.1% 0.1%
 
Income tax benefit (expense) (7) (220) (20) (635) (65.4%) (7) (220) 1 49 -
Net income 49 1,579 141 4,545 (65.3%) 49 1,579 2 79 1,898.7%
4.3% 4.3% 12.0% 12.0% 4.3% 4.3% 0.2% 0.2%
 
Other comprehensive income (loss) (30) (977) (155) (5,006) (80.5%) (30) (977) (18) (583) 67.6%
 
Total comprehensive income (loss) 19 602 (14) (461) - 19 602 (16) (504) -
 
Net income attributable to:
　　Stockholders of the parent 80 2,583 143 4,600 (43.8%) 80 2,583 7 210 1,130.0%
　　Non-controlling interests (31) (1,004) (2) (55) 1,725.5% (31) (1,004) (5) (131) 666.4%
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 51 1,635 (11) (369) - 51 1,635 (11) (356) -
　　Non-controlling interests (32) (1,033) (3) (92) 1,022.8% (32) (1,033) (5) (148) 598.0%
 
Earnings per share-basic 0.007 0.21 0.011 0.37 0.007 0.21 0.001 0.02
Earnings per ADS (2) 0.033 1.05 0.057 1.85 0.033 1.05 0.003 0.10
Weighted average number of shares
outstanding (in millions) 12,335 12,572 12,335 12,408
 
                                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2016 exchange rate of NT $32.27 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions 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 Six-Month Period Ended
June 30, 2016 June 30, 2016
US$ NT$ % US$ NT$ %
Net operating revenues 1,146 36,997 100.0% 2,213 71,401 100.0%
Operating costs (889) (28,712) (77.6%) (1,800) (58,082) (81.3%)
Gross profit 257 8,285 22.4% 413 13,319 18.7%
 
 
Operating expenses
- Sales and marketing expenses (34) (1,092) (2.9%) (65) (2,101) (3.0%)
- General and administrative expenses (48) (1,541) (4.2%) (78) (2,511) (3.5%)
- Research and development expenses (100) (3,226) (8.7%) (196) (6,311) (8.8%)
Subtotal (182) (5,859) (15.8%) (339) (10,923) (15.3%)
Net other operating income and expenses 1 23 0.0% 1 36 0.0%
Operating income 76 2,449 6.6% 75 2,432 3.4%
 
Net non-operating income and expenses (20) (650) (1.7%) (18) (602) (0.8%)
Income from continuing operations before

income tax

56 1,799 4.9% 57 1,830 2.6%
 
 
Income tax expense (7) (220) (0.6%) (6) (172) (0.3%)
Net income 49 1,579 4.3% 51 1,658 2.3%
 
Other comprehensive income (loss) (30) (977) (2.7%) (48) (1,560) (2.2%)
 
Total comprehensive income (loss) 19 602 1.6% 3 98 0.1%
 
Net income attributable to:
　　Stockholders of the parent 80 2,583 7.0% 87 2,793 3.9%
　　Non-controlling interests (31) (1,004) (2.7%) (36) (1,135) (1.6%)
 
Comprehensive income (loss) attributable to:
　　Stockholders of the parent 51 1,635 4.4% 40 1,279 1.8%
　　Non-controlling interests (32) (1,033) (2.8%) (37) (1,181) (1.7%)
 
Earnings per share-basic 0.007 0.21 0.007 0.23
Earnings per ADS (2) 0.033 1.05 0.036 1.15
 
Weighted average number of shares

outstanding (in millions)

12,335 12,372
                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2016 exchange rate of NT $32.27 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Six-Month Period Ended June 30, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
 
US$ NT$
Cash flows from operating activities :
Net income before tax 57 1,830
Depreciation & Amortization 797 25,706
Gain on disposal of investments (24) (770)
Share of loss of associates and joint ventures 10 326
Impairment loss on financial assets 15 485
Changes in notes & accounts receivable (164) (5,290)
Changes in prepayments (219) (7,082)
Changes in payables 78 2,529
Changes in assets, liabilities and others (23) (718)
Net cash provided by operating activities 527 17,016
 
Cash flows from investing activities :
Proceeds from disposal of available-for-sale financial assets 45 1,450
Proceeds from disposal of financial assets measured at cost 16 519
Acquisition of property, plant and equipment (1,543) (49,794)
Acquisition of intangible assets (21) (672)
Others 66 2,133
Net cash used in investing activities (1,437) (46,364)
 
Cash flows from financing activities :
Increase in short-term loans 520 16,787
Proceeds from long-term loans 62 2,000
Repayments of long-term loans (134) (4,329)
Increase in other financial liabilities 422 13,634
Treasury stock acquired (74) (2,396)
Others (0) (6)
Net cash provided by financing activities 796 25,690
 
Effect of exchange rate changes on cash and cash equivalents (5) (207)
Net decrease in cash and cash equivalents (119) (3,865)
 
Cash and cash equivalents at beginning of period 1,651 53,290
 
Cash and cash equivalents at end of period 1,532 49,425
 
       
Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2016 exchange rate of NT $32.27 per U.S. Dollar.
 


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Bowen Huang / David Wong, + 886-2-2658-9168, ext. 16900
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