Net operating revenues in 2Q18 increased 3.6% to NT$38.85 billion, including NT$38.77 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained at 44%. Gross profit increased 43.8% to NT$6.68 billion, or 17.2% of revenue. Operating expenses increased 7.5% to NT$5.21 billion. Net other operating income was NT$1.72 billion, leading to operating income of NT$3.18 billion. Net non-operating expense was NT$1.10 billion. Net income attributable to stockholders of the parent was NT$3.66 billion.

Earnings per ordinary share for the quarter was NT$0.30. Earnings per ADS was US$0.049. The basic weighted average number of outstanding shares in 2Q18 was 12,048,575,089, compared with 12,202,773,078 shares in 1Q18 and 12,208,239,978 shares in 2Q17. The diluted weighted average number of outstanding shares was 13,268,862,054 in 2Q18, compared with 13,457,161,259 shares in 1Q18 and 13,383,329,206 shares in 2Q17. The fully diluted share count on June 30, 2018 was approximately 13,644,606,000. On June 30, 2018, UMC held 600 million treasury shares acquired from the 16th, 17th and 18th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million)							2Q18			1Q18			QoQ % change			2Q17			YoY % change
Net Operating Revenues							38,852			37,497			3.6			37,538			3.5
COGS							(32,177)			(32,855)			(2.1)			(30,799)			4.5
Depreciation							(12,139)			(11,815)			2.7			(11,100)			9.4
Other Mfg. Costs							(20,038)			(21,040)			(4.8)			(19,699)			1.7
Gross Profit							6,675			4,642			43.8			6,739			(0.9)
Gross Margin (%)							17.2%			12.4%						18.0%
Operating Expenses							(5,213)			(4,850)			7.5			(5,330)			(2.2)
G&A							(1,083)			(1,017)			6.5			(1,035)			4.6
Sales & Marketing							(1,103)			(909)			21.3			(1,049)			5.1
R&D							(3,027)			(2,924)			3.5			(3,246)			(6.7)
Net Other Operating Income & Expenses							1,719			977			75.9			259			563.7
Operating Income							3,181			769			313.7			1,668			90.7

Net operating revenues grew 3.6% to NT$38.85 billion. COGS decreased 2.1% to NT$32.18 billion, as depreciation increased 2.7% to NT$12.14 billion while other manufacturing costs decreased 4.8% to NT$20.04 billion. Gross profit was NT$6.68 billion. Operating expenses increased 7.5% to NT$5.21 billion. General and Administrative (G&A) expenses increased 6.5% to NT$1.08 billion. Sales & Marketing expenses increased 21.3% to NT$1.10 billion and R&D expenses was up 3.5% to NT$3.03 billion, or 7.8% of net operating revenues. Net other operating income was NT$1.72 billion, leading to an operating income of NT$3.18 billion.