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UMC Reports Second Quarter 2017 Results

Company recognizes revenue contribution from 14nm shipments in 2Q17

Second Quarter 2017 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — July 26, 2017 — 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 2017.

Second quarter consolidated revenue was NT$37.54 billion, up from NT$37.42 billion in 1Q17 and up 1.5% YoY from NT$37.00 billion in 2Q16. 2Q17 consolidated gross margin was 18.0%. Net income attributable to the stockholders of the parent was NT$2.10 billion, with earnings per ordinary share of NT$0.17.

Jason Wang, newly appointed co-president of UMC, said, “In the second quarter of 2017, UMC’s foundry revenue was NT$37.45 billion. Stable chip demand led to a utilization rate of 96%, bringing wafer shipments to 1.74 million 8-inch equivalents. Gross margin was 18.1%. We experienced robust demand for our mature technologies on both 8” and 12” manufacturing, led by strength in the computing and communication segments.”

President Wang continued, “Looking into the third quarter, demand for our mature technologies remains firm. However, due to a softened outlook for 28nm, we project a sequentially flat quarter. Our 28nm HKMG business has become increasingly vulnerable due to high exposure among a few key customers. As a result, we are seeing the possibility that the decline of our 28nm HKMG business will extend into the second half of 2017.”

Co-president SC Chien added, “Recently, UMC’s board of directors appointed Mr. Jason Wang and I as co-presidents. I will take the lead in fab operations and technology development, while president Wang will be responsible for business management and corporate strategy. We will both implement measures to strengthen our foundry competitiveness in core manufacturing and drive operational efficiencies to enhance financial performance. Our goal is to unlock UMC’s value and lead to positive cash flow.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)     2Q17   1Q17   QoQ %
change 		  2Q16   YoY %
change
Net Operating Revenues     37,538   37,418   0.3   36,997   1.5
Gross Profit 6,739 7,428 (9.3 ) 8,285 (18.7 )
Operating Expenses (5,330 ) (6,211 ) (14.2 ) (5,859 ) (9.0 )
Net Other Operating Income and Expenses 259 154 68.2 23 1,026.1
Operating Income (Loss) 1,668 1,371 21.7 2,449 (31.9 )
Net Non-Operating Income and Expenses 448 (304 ) - (650 ) -
Net Income Attributable to Stockholders of the Parent 2,099 2,286 (8.2 ) 2,583 (18.7 )

EPS (NT$ per share)

0.17 0.19 0.21

(US$ per ADS)

    0.028     0.031         0.035      

Net operating revenues remained flat in 2Q17 at NT$37.54 billion, including NT$37.45 billion from the foundry segment. Revenue contribution from 14nm, 28nm and 40nm totaled 46%. Gross profit declined 9.3% to NT$6.74 billion, or 18.0% of revenue. Operating expenses decreased 14.2% to NT$5.33 billion. Net other operating income was NT$259 million, leading to an operating income of NT$1.67 billion. Net non-operating income was NT$448 million. Net income attributable to stockholders of the parent was NT$2.10 billion.

Earnings per ordinary share for the quarter was NT$0.17. Earnings per ADS was US$0.028. The basic weighted average number of outstanding shares in 2Q17 was 12,208,239,978, compared with 12,208,239,978 shares in 1Q17 and 12,334,888,329 shares in 2Q16. The diluted weighted average number of outstanding shares was 13,383,329,206 in 2Q17, compared with 13,418,016,296 shares in 1Q17 and 13,460,073,526 shares in 2Q16. The fully diluted share count on June 30, 2017 was approximately 13,799,408,000. On June 30, 2017, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million)     2Q17   1Q17   QoQ %
change 		  2Q16   YoY %
change
Net Operating Revenues     37,538   37,418   0.3   36,997   1.5
COGS (30,799 ) (29,990 ) 2.7 (28,712 ) 7.3
Depreciation (11,100 ) (11,032 ) 0.6 (11,264 ) (1.5 )
Other Mfg. Costs (19,699 ) (18,958 ) 3.9 (17,448 ) 12.9
Gross Profit 6,739 7,428 (9.3 ) 8,285 (18.7 )
Gross Margin (%) 18.0 % 19.9 % 22.4 %
Operating Expenses (5,330 ) (6,211 ) (14.2 ) (5,859 ) (9.0 )
G&A (1,035 ) (1,050 ) (1.4 ) (1,541 ) (32.8 )

Sales & Marketing

(1,049 ) (1,170 ) (10.3 ) (1,092 ) (3.9 )
R&D (3,246 ) (3,991 ) (18.7 ) (3,226 ) 0.6
Net Other Operating

Income & Expenses

259 154 68.2 23 1,026.1
Operating Income

(Loss)

    1,668     1,371     21.7     2,449     (31.9 )

Net operating revenues remained at NT$37.54 billion. COGS increased to NT$30.80 billion, as depreciation was flat. Other manufacturing costs increased 3.9% to NT$19.70 billion, partly from higher wafer shipments. Gross profit was NT$6.74 billion. Operating expenses declined 14.2% to NT$5.33 billion. Sales & Marketing declined 10.3% to NT$1.05 billion. R&D expense decreased 18.7% to NT$3.25 billion, or 8.6% of net operating revenues. Net other operating income was NT$259 million, leading to an operating income of NT$1.67 billion.

Non-Operating Income and Expenses
(Amount: NT$ million)     2Q17   1Q17   2Q16
Non-Operating Income and Expenses     448   (304 )   (650 )
Net Interest Income and Expenses (502 ) (472 ) (154 )
Net Investment Gain and Loss (44 ) 166 (504 )
Gain and Loss on Disposal of Investment 272 488 548
Exchange Gain and Loss 807 (517 ) (501 )
Other Gain and Loss     (85 )   31     (39 )

Net non-operating income in 2Q17 increased to NT$448 million, which primarily resulted from a NT$807 million in exchange gain and a NT$272 million gain in disposal of investments.

Cash Flow Summary

(Amount: NT$ million)    

For the 3-Month
Period Ended
Jun. 30, 2017

 

For the 3-Month
Period Ended
Mar. 31, 2017

Cash Flow from Operating Activities     14,817   13,311
Net income before tax 2,116 1,067
Depreciation & Amortization 13,093 13,292
Gain on disposal of investments (272 ) (488 )
Impairment loss on financial assets 109 287
Exchange gain on financial assets and liabilities (625 ) (624 )
Changes in working capital 1,051 580
Income tax paid (232 ) (451 )
Other (423 ) (352 )
Cash Flow from Investing Activities (8,105 ) (16,293 )
Capital expenditures (8,333 ) (17,654 )
Proceeds from disposal of AFS financial assets 583 701
Acquisition of intangible assets (295 ) (378 )
Other (60 ) 1,038
Cash Flow from Financing Activities 707 7,845
Bank loans 8,054 783
Bonds Issued - 8,300
Redemption of bonds (7,500 ) -
Other 153 (1,238 )
Effect of Exchange Rate (97 ) (1,630 )
Net Cash Flow     7,322     3,233  

Cash inflow from operating activities reached NT$14.82 billion. Cash outflow from investing activities totaled NT$8.11 billion, including NT$8.33 billion in CAPEX spending for the foundry segment, resulting in a free cash outflow of NT$6.48 billion. Cash inflow from financing activities was NT$707 million, mainly due to a NT$8.05 billion in bank loans offset by a NT$7.50 billion in redemption of bonds. Net cash inflow in 2Q17 was NT$7.32 billion. Over the next 12 months, the company expects to repay NT$1.44 billion in bank loans.

Current Assets
(Amount: NT$ billion)     2Q17   1Q17   2Q16
Cash and Cash Equivalents     68.13   60.81   49.43
Notes & Accounts Receivable 22.23 20.88 24.53
Days Sales Outstanding 52 54 54
Inventories, net 16.28 16.26 17.59
Days of Inventory 48 51 53
Total Current Assets     120.08   111.54   103.60

Cash and cash equivalents increased to NT$68.13 billion, mainly due a decrease in CAPEX spending in the foundry segment. Days of inventory decreased to 48 days.

Liabilities
(Amount: NT$ billion)     2Q17   1Q17   2Q16
Total Current Liabilities     87.70   66.87   80.05
Notes & Accounts Payable 6.65 6.44 7.58
Short-Term Credit / Bonds 48.19 36.34 33.48
Payable on Equipment 5.28 6.41 14.94
Dividends payable 6.11 - 6.91
Other 21.47 17.68 17.14
Long-Term Credit / Bonds 51.24 62.31 40.47
Long-Term Investment Liabilities 19.92 19.47 18.80
Total Liabilities 172.62 162.70 148.15
Debt to Equity     81 %   75 %   67 %

Current liabilities increased to NT$87.70 billion, which included an increase in short-term credit/bonds NT$48.19 billion and a NT$6.11 billion in dividends payable. Long-term credit/bonds decreased to NT$51.24 billion. Total liabilities increased to NT$172.62 billion, leading to a debt to equity ratio of 81%.

Analysis of Revenue2 for Foundry Segment

Revenue Breakdown by Region
Region   2Q17   1Q17   4Q16   3Q16   2Q16
North America   42%   41%   48%   52%   49%
Asia Pacific   47%   50%   45%   42%   45%
Europe   7%   5%   4%   4%   4%
Japan   4%   4%   3%   2%   2%

Revenue from North American and European customers increased to 42% and 7% of sales respectively. Revenue contribution from Asia Pacific customers decreased to 47%.

Revenue Breakdown by Geometry
Geometry   2Q17   1Q17   4Q16   3Q16   2Q16
14nm and below   1%   0%   -   -   -
14nm<x<=28nm   17%   17%   22%   21%   17%
28nm<x<=40nm   28%   29%   26%   27%   26%
40nm<x<=65nm   12%   13%   14%   15%   18%
65nm<x<=90nm   5%   4%   3%   4%   4%
90nm<x<=0.13um   12%   11%   11%   11%   11%
0.13um<x<=0.18um   12%   13%   11%   11%   12%
0.18um<x<=0.35um   10%   10%   10%   8%   9%
0.5um and above   3%   3%   3%   3%   3%

14nm represented 1% of 2Q17 revenue, while 28nm contribution remains at 17%. 40nm accounted for 28% of sales.

Revenue Breakdown by Customer Type
Customer Type   2Q17   1Q17   4Q16   3Q16   2Q16
Fabless   91%   93%   93%   93%   93%
IDM   9%   7%   7%   7%   7%

Revenue from fabless customers declined to 91% in 2Q17.

Revenue Breakdown by Application (1)
Application   2Q17   1Q17   4Q16   3Q16   2Q16
Computer   14%   12%   13%   12%   11%
Communication   48%   51%   53%   55%   55%
Consumer   29%   28%   26%   26%   27%
Others   9%   9%   8%   7%   7%

Revenue from consumer and computer segments grew to 29% and 14% respectively. Communication business decreased to 48%.

(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) remained unchanged in 2Q17.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q17_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer Shipments
    2Q17   1Q17   4Q16   3Q16   2Q16
Wafer Shipments
(8” K equivalents) 		  1,741   1,678   1,656   1,569   1,514
 
Quarterly Capacity Utilization Rate
    2Q17   1Q17   4Q16   3Q16   2Q16
Utilization Rate   96%   96%   94%   89%   89%
Total Capacity
(8” K equivalents) 		  1,816   1,742   1,794   1,774   1,723

Wafer shipments increased to 1,741K in 2Q17. Quarterly capacity increased 4.2% QoQ to 1,816K, leading to an overall utilization rate of 96% in 2Q17.

Capacity4 for Foundry Segment

Overall capacity in the second quarter was 1,816K 8-inch equivalent wafers. Estimated capacity in the third quarter will increase to 1,861K 8-inch equivalent wafers, primarily due to capacity expansion at Fab 12X and enhancements to production capabilities at Fab 8C, Fab 8F and Fab 8S.

Annual Capacity in

thousands of wafers

    Quarterly Capacity in

thousands of wafers

FAB   Geometry
(um) 		  2016   2015   2014   2013 FAB   3Q17E   2Q17   1Q17   4Q16
WTK   6"   3.5 – 0.45   423   421   448   448 WTK   106   106   104   106
Fab 8A   8"   0.5 – 0.25   827   813   813   813 Fab 8A   207   207   204   207
Fab 8C   8"   0.35 – 0.11   348   347   347   347 Fab 8C   92   87   86   87
Fab 8D   8"   0.13 – 0.09   342   341   358   382 Fab 8D   86   86   84   86
Fab 8E   8"   0.5 – 0.18   419   418   418   418 Fab 8E   105   105   103   105
Fab 8F   8"   0.18 – 0.11   401   388   388   388 Fab 8F   107   102   100   102
Fab 8S   8"   0.18 – 0.11   336   335   335   335 Fab 8S   87   84   83   84
Fab 8N   8"   0.5 – 0.11   750   667   547   469 Fab 8N   188   188   185   188
Fab 12A   12"   0.13 – 0.028   885   793   700   651 Fab 12A   247   247   226   233
Fab 12i   12”   0.13 – 0.040   584   572   573   550 Fab 12i   134   134   137   148
Fab 12X   12”   0.040   9   -   -   - Fab 12X   33   19   10   9
Total(1)   6,983   6,617   6,323   6,107 Total   1,861   1,816   1,742   1,794
YoY Growth Rate   6%   5%   4%   11%        

(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

Capital Expenditure by Year - in US$ billion
Year   2016   2015   2014   2013   2012
CAPEX   $ 2.8   $ 1.9   $ 1.4   $ 1.1   $ 1.7

2012 figures account for UMC parent company only.

 

2017 CAPEX Plan

8"   12"   Total
11%   89%   US$1.7 billion

CAPEX spending in 2Q17 totaled US$275 million. Full year 2017 CAPEX plan is budgeted for US$1.7 billion.

Third Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

Recent Developments / Announcements

Jun 14, 2017  

UMC Restructures Executive Team

Jun. 8, 2017

UMC Shareholders Approve NT$0.50 Cash Dividend at Annual General Meeting

Apr. 26, 2017

UMC1Q 2017 Financial Results

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

Conference Call / Webcast Announcement

Wednesday, July 26, 2017

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 2Q17 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 comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 19,000 people worldwide, with offices in Taiwan, 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, 2017, the three-month period ending Mar. 31, 2017, and the equivalent three-month period that ended Jun. 30, 2016. For all 2Q17 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Jun. 30, 2017 exchange rate of NT$ 30.42 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, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
       
 
June 30, 2017
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 2,240 68,134 17.7 %
Financial assets at fair value through profit or loss, current 26 800 0.2 %
Notes & Accounts receivable, net 731 22,226 5.8 %
Inventories, net 535 16,285 4.2 %
Other current assets 415   12,633   3.2 %
Total current assets 3,947   120,078   31.1 %
 
Non-current assets
Funds and investments 1,180 35,907 9.3 %
Property, plant and equipment 6,994 212,772 55.1 %
Other non-current assets 562   17,060   4.5 %
Total non-current assets 8,736   265,739   68.9 %
Total assets 12,683   385,817   100.0 %
 
Liabilities
Current liabilities
Short-term loans 726 22,088 5.7 %
Financial liabilities at fair value through profit or loss, current 3 85 0.0 %
Payables 923 28,072 7.2 %
Dividends payable 201 6,112 1.6 %
Current portion of long-term liabilities 858 26,105 6.8 %
Other current liabilities 172   5,234   1.4 %
Total current liabilities 2,883   87,696   22.7 %
 
Non-current liabilities
Bonds payable 601 18,280 4.7 %
Long-term loans 1,083 32,957 8.5 %
Other non-current liabilities 1,108   33,688   8.8 %
Total non-current liabilities 2,792   84,925   22.0 %
Total liabilities 5,675   172,621   44.7 %
 
Equity
Equity attributable to the parent company
Capital 4,150 126,243 32.7 %
Additional paid-in capital 1,343 40,854 10.6 %

Retained earnings, unrealized gain or loss on available-for-sale
financial assets and exchange differences on translation of
foreign operations

 

1,640 49,887 12.9 %
Treasury stock (155 ) (4,719 ) (1.2 %)
Total equity attributable to the parent company 6,978 212,265 55.0 %
Non-controlling interests 30   931   0.3 %
Total equity 7,008   213,196   55.3 %
Total liabilities and equity 12,683   385,817   100.0 %
 
               
Note：New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2017 exchange rate of NT $30.42 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, 2017 June 30, 2016 Chg. June 30, 2017 March 31, 2017 Chg.
US$ NT$ US$ NT$ %   US$ NT$ US$ NT$ %  
Net operating revenues 1,234 37,538 1,216 36,997 1.5 % 1,234 37,538 1,230 37,418 0.3 %
Operating costs (1,012 ) (30,799 ) (944 ) (28,712 ) 7.3 % (1,012 ) (30,799 ) (986 ) (29,990 ) 2.7 %
Gross profit 222   6,739   272   8,285   (18.7 %) 222   6,739   244   7,428   (9.3 %)
18.0 % 18.0 % 22.4 % 22.4 % 18.0 % 18.0 % 19.9 % 19.9 %
Operating expenses
- Sales and marketing expenses (34 ) (1,049 ) (36 ) (1,092 ) (3.9 %) (34 ) (1,049 ) (38 ) (1,170 ) (10.3 %)
- General and administrative expenses (34 ) (1,035 ) (50 ) (1,541 ) (32.8 %) (34 ) (1,035 ) (35 ) (1,050 ) (1.4 %)
- Research and development expenses (107 ) (3,246 ) (106 ) (3,226 ) 0.6 % (107 ) (3,246 ) (131 ) (3,991 ) (18.7 %)
Subtotal (175 ) (5,330 ) (192 ) (5,859 ) (9.0 %) (175 ) (5,330 ) (204 ) (6,211 ) (14.2 %)
Net other operating income and expenses 8   259   1   23   1,026.1 % 8   259   5   154   68.2 %
Operating income 55 1,668 81 2,449 (31.9 %) 55 1,668 45 1,371 21.7 %
4.4 % 4.4 % 6.6 % 6.6 % 4.4 % 4.4 % 3.7 % 3.7 %
 
Net non-operating income and expenses 15   448   (22 ) (650 ) -   15   448   (10 ) (304 ) -  
Income from continuing operations before

income tax

70 2,116 59 1,799 17.6 % 70 2,116 35 1,067 98.3 %
5.6 % 5.6 % 4.9 % 4.9 % 5.6 % 5.6 % 2.9 % 2.9 %
 
Income tax benefit (expense) (21 ) (638 ) (7 ) (220 ) 190.0 % (21 ) (638 ) 14   430   -  
Net income 49 1,478 52 1,579 (6.4 %) 49 1,478 49 1,497 (1.3 %)
3.9 % 3.9 % 4.3 % 4.3 % 3.9 % 3.9 % 4.0 % 4.0 %
 
Other comprehensive income (loss) 45   1,396   (32 ) (977 ) -   45   1,396   (98 ) (2,997 ) -  
 
Total comprehensive income (loss) 94   2,874   20   602   377.4 % 94   2,874   (49 ) (1,500 ) -  
 

Net income attributable to:

Stockholders of the parent

69 2,099 85 2,583 (18.7 %) 69 2,099 75 2,286 (8.2 %)

Non-controlling interests

(20 ) (621 ) (33 ) (1,004 ) (38.1 %) (20 ) (621 ) (26 ) (789 ) (21.3 %)
 
Comprehensive income (loss) attributable to:

Stockholders of the parent

115 3,488 54 1,635 113.3 % 115 3,488 (20 ) (599 ) -

Non-controlling interests

(21 ) (614 ) (34 ) (1,033 ) (40.6 %) (21 ) (614 ) (29 ) (901 ) (31.9 %)
 
Earnings per share-basic 0.006   0.17   0.007   0.21   0.006   0.17   0.006   0.19  
Earnings per ADS (2) 0.028   0.85   0.035   1.05   0.028   0.85   0.031   0.95  
Weighted average number of shares
outstanding (in millions) 12,208   12,335   12,208   12,208  
 
                                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2017 exchange rate of NT $30.42 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, 2017 June 30, 2017
US$ NT$ %   US$ NT$ %  
Net operating revenues 1,234 37,538 100.0 % 2,464 74,956 100.0 %
Operating costs (1,012 ) (30,799 ) (82.0 %) (1,998 ) (60,788 ) (81.1 %)
Gross profit 222   6,739   18.0 % 466   14,168   18.9 %
 
 
Operating expenses
- Sales and marketing expenses (34 ) (1,049 ) (2.8 %) (73 ) (2,220 ) (3.0 %)
- General and administrative expenses (34 ) (1,035 ) (2.8 %) (68 ) (2,085 ) (2.8 %)
- Research and development expenses (107 ) (3,246 ) (8.6 %) (238 ) (7,237 ) (9.6 %)
Subtotal (175 ) (5,330 ) (14.2 %) (379 ) (11,542 ) (15.4 %)
Net other operating income and expenses 8   259   0.6 % 13   412   0.6 %
Operating income 55 1,668 4.4 % 100 3,038 4.1 %
 
Net non-operating income and expenses 15   448   1.2 % 5   146   0.1 %

Income from continuing operations before
income tax

 

70 2,116 5.6 % 105 3,184 4.2 %
 
 
Income tax expense (21 ) (638 ) (1.7 %) (7 ) (209 ) (0.2 %)
Net income 49 1,478 3.9 % 98 2,975 4.0 %
 
Other comprehensive income (loss) 45   1,396   3.8 % (53 ) (1,601 ) (2.2 %)
 
Total comprehensive income (loss) 94   2,874   7.7 % 45   1,374   1.8 %
 

Net income attributable to:

Stockholders of the parent

69 2,099 5.6 % 144 4,385 5.9 %

Non-controlling interests

(20 ) (621 ) (1.7 %) (46 ) (1,410 ) (1.9 %)
 

Comprehensive income (loss) attributable to:

Stockholders of the parent

115 3,488 9.3 % 95 2,888 3.9 %

Non-controlling interests

(21 ) (614 ) (1.6 %) (50 ) (1,514 ) (2.1 %)
 
Earnings per share-basic 0.006   0.17   0.012   0.36  
Earnings per ADS (2) 0.028   0.85   0.059   1.80  
 
Weighted average number of shares

outstanding (in millions)

12,208   12,208  
                       
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2017 exchange rate of NT $30.42 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, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
   
US$ NT$
Cash flows from operating activities :
Net income before tax 105 3,184
Depreciation & Amortization 867 26,385
Gain on disposal of investments (25 ) (761 )
Exchange gain on financial assets and liabilities (41 ) (1,249 )
Changes in other current assets (25 ) (764 )
Changes in other current liabilities 41 1,239
Changes in assets, liabilities and others 3   94  
Net cash provided by operating activities 925 28,128
 
Cash flows from investing activities :
Acquisition of available-for-sale financial assets (23 ) (691 )
Proceeds from disposal of available-for-sale financial assets 42 1,284
Proceeds from capital reduction and liquidation of investments 65 1,980
Acquisition of property, plant and equipment (854 ) (25,987 )
Acquisition of intangible assets (22 ) (673 )
Others (10 ) (311 )
Net cash used in investing activities (802 ) (24,398 )
 
Cash flows from financing activities :
Increase in short-term loans 86 2,604
Proceeds from bonds issued 273 8,300
Redemption of bonds (247 ) (7,500 )
Proceeds from long-term loans 306 9,308
Repayments of long-term loans (101 ) (3,076 )
Acquisition of subsidiaries (40 ) (1,228 )
Others 4   144  
Net cash provided by financing activities 281 8,552
 
Effect of exchange rate changes on cash and cash equivalents (57 ) (1,727 )
Net Increase in cash and cash equivalents 347 10,555
 
Cash and cash equivalents at beginning of period 1,893   57,579  
 
Cash and cash equivalents at end of period 2,240   68,134  
 
       
Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2017 exchange rate of NT $30.42 per U.S. Dollar.


Contact:

UMC
Michael Lin / David Wong, +886-2-2658-9168, ext. 16900
Investor Relations
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