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UMC Reports Third Quarter 2018 Results

3Q18 reaches record high revenue of NT$39.39 billion; 14nm FinFET accounted for 5% of sales

Third Quarter 2018 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — October 24, 2018 — United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the third quarter of 2018.

Third quarter consolidated revenue was NT$39.39 billion, up 1.4% QoQ from NT$38.85 billion in 2Q18 and 4.5% YoY from NT$37.70 billion in 3Q17. Consolidated gross margin for 3Q18 was 17.6%. Net income attributable to stockholders of the parent was NT$1.72 billion, with earnings per ordinary share of NT$0.14.

Jason Wang, co-president of UMC, said, “In the third quarter, foundry revenue reached a record high of NT$39.33 billion, up 1.4% from 2Q18. Foundry operating margin was 6.4%. Utilization rate reached 94%, bringing wafer shipments to 1.8 million 8-inch equivalent wafers. Loading across 8" and mature 12" technologies continued to operate at full capacity, as the company generated NT$10.16 billion of free cash flow during the quarter. In addition, we saw an increase in computing related applications, which offset the decline in the communication segment. From a long-term perspective, we believe numerous essential semiconductor components will continue to strengthen our specialty technology business. For example, Allegro Microsystems, a leader in high-performance power and sensor solutions, signed a multi-year manufacturing agreement with UMC to ensure long-term capacity support for their growing wafer requirements in industrial and automotive segments.”

Co-president Wang continued, “Looking into the next quarter, we are seeing a softening of wafer demand from customers, partly due to continued softness in entry and mid-end smartphones. The recent escalation of trade tensions, rising global crude oil prices and continuous weakening of emerging market currencies could further increase uncertainties in the broader economy. Meanwhile, we will continue the execution of our strategy to invest in return-driven goals while moderating the expansion of advanced technologies. We are confident that UMC’s globalization efforts will increase our customers’ competitive edge through geopolitical risk mitigation while enhancing shareholder value to preserve the best interests of all our stakeholders.”

 
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 September 30, 2018, the three-month period ending June 30, 2018, and the equivalent three-month period that ended September 30, 2017. For all 3Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2018 exchange rate of NT$ 30.53 per U.S. Dollar.
 

Summary of Operating Results

 
Operating Results
(Amount: NT$ million)       3Q18   2Q18  

QoQ %
change

  3Q17  

YoY %
change

Net Operating Revenues       39,387   38,852   1.4   37,698   4.5
Gross Profit 6,922 6,675 3.7 6,592 5.0
Operating Expenses (5,702) (5,213) 9.4 (5,404) 5.5
Net Other Operating Income and Expenses 1,215 1,719 (29.3) 441 175.5
Operating Income 2,435 3,181 (23.5) 1,629 49.5
Net Non-Operating Income and Expenses (1,606) (1,095) 46.7 1,236 -
Net Income Attributable to Stockholders of the Parent 1,720 3,659 (53.0) 3,473 (50.5)
EPS (NT$ per share) 0.14 0.30 0.28
(US$ per ADS)       0.023   0.049       0.046    
 

Net operating revenues in 3Q18 increased 1.4% to NT$39.39 billion, including NT$39.33 billion from the foundry segment. Revenue contribution from 40nm and below technologies declined to 40%. Gross profit increased 3.7% to NT$6.92 billion, or 17.6% of revenue. Operating expenses increased 9.4% to NT$5.70 billion. Net other operating income was NT$1.21 billion, leading to operating income of NT$2.44 billion. Net non-operating expense was NT$1.61 billion. Net income attributable to stockholders of the parent was NT$1.72 billion.

Earnings per ordinary share for the quarter was NT$0.14. Earnings per ADS was US$0.023. The basic weighted average number of outstanding shares in 3Q18 was 12,053,892,152, compared with 12,048,575,089 shares in 2Q18 and 12,208,239,978 shares in 3Q17. The diluted weighted average number of outstanding shares was 13,354,955,886 in 3Q18, compared with 13,268,862,054 shares in 2Q18 and 13,441,188,010 shares in 3Q17. The fully diluted share count on September 30, 2018 was approximately 13,725,383,000. On September 30, 2018, UMC held 200 million treasury shares acquired from the 17th share buy-back programs.

Detailed Financials Section

Net operating revenues grew 1.4% to NT$39.39 billion. COGS increased 0.9% to NT$32.47 billion, as depreciation declined 4.9% to NT$11.55 billion while other manufacturing costs increased 4.4% to NT$20.92 billion. Gross profit was NT$6.92 billion. Operating expenses increased 9.4% to NT$5.70 billion. General and Administrative (G&A) expenses increased 28% to NT$1.39 billion. Sales & Marketing expenses declined 10.5% to NT$0.99 billion and R&D expenses were up 10% to NT$3.33 billion, or 8.5% of net operating revenues. Net other operating income was NT$1.21 billion, leading to an operating income of NT$2.44 billion.

 
COGS & Expenses
(Amount: NT$ million)       3Q18   2Q18   QoQ %
change 		  3Q17   YoY %
change
Net Operating Revenues       39,387   38,852   1.4   37,698   4.5
COGS (32,465) (32,177) 0.9 (31,106) 4.4
Depreciation (11,549) (12,139) (4.9) (11,145) 3.6
Other Mfg. Costs (20,916) (20,038) 4.4 (19,961) 4.8
Gross Profit 6,922 6,675 3.7 6,592 5.0
Gross Margin (%) 17.6% 17.2% 17.5%
Operating Expenses (5,702) (5,213) 9.4 (5,404) 5.5
G&A (1,386) (1,083) 28.0 (991) 39.9
Sales & Marketing (987) (1,103) (10.5) (1,070) (7.8)
R&D (3,329) (3,027) 10.0 (3,343) (0.4)
Net Other Operating

Income & Expenses

1,215 1,719 (29.3) 441 175.5
Operating Income       2,435   3,181   (23.5)   1,629   49.5
 

Net non-operating expense in 3Q18 was NT$1.61 billion, primarily resulting from NT$961 million in exchange loss and NT$507 million in net interest expense.

 
Non-Operating Income and Expenses
(Amount: NT$ million)       3Q18   2Q18   3Q17
Non-Operating Income and Expenses       (1,606)   (1,095)   1,236
Net Interest Income and Expenses (507) (505) (538)
Net Investment Gain and Loss (126) 105 1,016
Exchange Gain and Loss (961) (720) 776
Other Gain and Loss       (12)   25   (18)
 

Cash inflow from operating activities was NT$15.77 billion. Cash outflow from investing activities totaled NT$5.48 billion, including NT$5.61 billion in CAPEX spending for the foundry segment, resulting in free cash flow of NT$10.16 billion. Cash outflow from financing activities totaled NT$3.25 billion, mainly from NT$8.56 billion in the payment of cash dividends, which was partly offset by cash inflows of NT$3.11 billion from bank loans and NT$2.20 billion in treasury stock sold to employees. Net cash inflow in 3Q18 was NT$6.33 billion. Over the next 12 months, the company expects to repay NT$3.01 billion in bank loans.

 

Cash Flow Summary

(Amount: NT$ million)      

For the 3-Month
Period Ended
Sep. 30, 2018

 

For the 3-Month
Period Ended
Jun. 30, 2018

Cash Flow from Operating Activities       15,772   14,264
Net income before tax 829 2,086
Depreciation & Amortization 12,973 13,373
Net loss of financial assets

and liabilities at FVTPL

797 112
Exchange loss on financial assets and liabilities 1,126 1,516
Changes in working capital 158 (1,354)
Interest paid (94) (911)
Income tax paid (134) (86)
Other 117 (472)
Cash Flow from Investing Activities (5,476) (6,077)
Capital expenditures (5,612) (3,901)
Acquisition of investments accounted for under the equity method - (840)
Changes in refundable deposits 58 (980)
Acquisition of intangible assets (169) (130)
Other 247 (226)
Cash Flow from Financing Activities (3,253) (10,795)
Bank loans 3,114 (8,859)
Treasury stock acquired - (2,534)
Treasury stock sold to employees 2,204 -
Cash dividends (8,557) -
Other (14) 598
Effect of Exchange Rate (716) 657
Net Cash Flow       6,327   (1,951)
 

Cash and cash equivalents increased to NT$81.52 billion. Days of inventory increased one day to 50 days.

 
Current Assets
(Amount: NT$ billion)       3Q18   2Q18   3Q17
Cash and Cash Equivalents       81.52   75.19   69.94
Notes & Accounts Receivable 25.61 27.01 22.61
Days Sales Outstanding 61 61 54
Inventories, net 17.59 17.66 17.10
Days of Inventory 50 49 49
Total Current Assets       140.15   137.08   124.71
 

Current liabilities decreased to NT$51.43 billion. Total liabilities decreased to NT$160.11 billion, leading to a debt to equity ratio of 75%.

 
Liabilities
(Amount: NT$ billion)       3Q18   2Q18   3Q17
Total Current Liabilities       51.43   59.17   82.36
Notes & Accounts Payable 6.89 7.41 6.61
Short-Term Credit / Bonds 20.33 17.23 48.74
Payable on Equipment 2.59 3.61 5.23
Dividends payable - 8.56 -
Other 21.62 22.36 21.78
Long-Term Credit / Bonds 67.46 67.76 52.36
Long-Term Investment Liabilities 20.16 20.79 20.34
Total Liabilities 160.11 170.11 169.74
Debt to Equity       75%   81%   79%
 

Analysis of Revenue2 for Foundry Segment

Revenue from Asia Pacific increased to 52%, while sales contribution from North American customers declined to 34%. Revenue from Japan remained at 3%.

 
Revenue Breakdown by Region
Region       3Q18   2Q18   1Q18   4Q17   3Q17
North America       34%   37%   42%   43%   43%
Asia Pacific       52%   51%   47%   45%   47%
Europe       11%   9%   8%   9%   8%
Japan       3%   3%   3%   3%   2%
 

Business from 14nm increased to 5% of 3Q18 revenue, while 28nm contribution declined to 13%.

 
Revenue Breakdown by Geometry
Geometry       3Q18   2Q18   1Q18   4Q17   3Q17
14nm and below       5%   3%   2%   2%   1%
14nm<x<=28nm       13%   15%   12%   15%   15%
28nm<x<=40nm       22%   26%   30%   28%   29%
40nm<x<=65nm       12%   12%   13%   12%   12%
65nm<x<=90nm       10%   7%   6%   5%   6%
90nm<x<=0.13um       11%   11%   11%   12%   12%
0.13um<x<=0.18um       14%   13%   13%   13%   12%
0.18um<x<=0.35um       10%   10%   10%   10%   10%
0.5um and above       3%   3%   3%   3%   3%
 

Revenue from fabless customers increased to 93% of revenue.

 
Revenue Breakdown by Customer Type
Customer Type       3Q18   2Q18   1Q18   4Q17   3Q17
Fabless       93%   92%   92%   91%   90%
IDM       7%   8%   8%   9%   10%
 

The communication segment declined to 43% of sales, while revenue from consumer applications remained at 28%. Computer related applications represented 19% of revenue.

 
Revenue Breakdown by Application (1)
Application       3Q18   2Q18   1Q18   4Q17   3Q17
Computer       19%   16%   14%   13%   14%
Communication       43%   47%   47%   49%   47%
Consumer       28%   28%   29%   29%   31%
Others       10%   9%   10%   9%   8%
 
 
(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.
 
2 Revenue in this section represents wafer sales
 

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) in 3Q18 increased marginally.

(To view ASP trend, visit http://www.umc.com/english/investors/3Q18_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

In 3Q18, wafer shipments declined 2.3% to 1,804K. Quarterly capacity increased 1.0% QoQ to 1,938K, resulting in an overall utilization rate of 94%.

 
Wafer Shipments
        3Q18   2Q18   1Q18   4Q17   3Q17
Wafer Shipments
(8” K equivalents) 		      1,804   1,846   1,747   1,670   1,748
 
 
Quarterly Capacity Utilization Rate
        3Q18   2Q18   1Q18   4Q17   3Q17
Utilization Rate       94%   97%   94%   90%   96%
Total Capacity
(8” K equivalents) 		      1,938   1,918   1,858   1,886   1,861
 
 
3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity
 

Capacity4 for Foundry Segment

Total capacity in the third quarter reached 1,938K 8-inch equivalent wafers. We anticipate our fourth quarter capacity to grow by approximately 1% QoQ to 1,958K 8-inch equivalent wafers, which included capacity expansion at Fab 8C and Fab 8D.

 

Annual Capacity in
thousands of wafers

     

Quarterly Capacity in
thousands of wafers

FAB   Geometry
(um) 		  2017   2016   2015   2014 FAB   4Q18E   3Q18   2Q18   1Q18
WTK   6"   3.5 – 0.45   422   423   421   448 WTK   93   93   106   104
Fab 8A   8"   0.5 – 0.25   825   827   813   813 Fab 8A   207   207   207   204
Fab 8C   8"   0.35 – 0.11   357   348   347   347 Fab 8C   108   92   92   91
Fab 8D   8"   0.13 – 0.09   341   342   341   358 Fab 8D   90   86   86   85
Fab 8E   8"   0.5 – 0.18   418   419   418   418 Fab 8E   105   105   105   103
Fab 8F   8"   0.18 – 0.11   417   401   388   388 Fab 8F   108   108   108   107
Fab 8S   8"   0.18 – 0.11   347   336   335   335 Fab 8S   93   93   93   92
HJ   8"   0.5 – 0.11   753   750   667   547 HJ   194   194   194   190
Fab 12A   12"   0.13 – 0.014   970   885   793   700 Fab 12A   250   250   250   246
Fab 12i   12"   0.13 – 0.040   537   584   572   573 Fab 12i   144   144   136   131
USCXM   12"   0.040 – 0.028   97   9   -   - USCXM   51   51   46   35
Total(1)   7,304   6,983   6,617   6,323 Total   1,958   1,938   1,918   1,858
YoY Growth Rate   5%   6%   5%   4%        
 
 
(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.
 
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.
 

CAPEX for Foundry Segment

CAPEX spending in 3Q18 was US$183 million, bringing the first nine months of 2018 capital expenditures to US$509 million. Full year 2018 CAPEX is budgeted for US$1.1 billion.

 
Capital Expenditure by Year - in US$ billion
Year   2017   2016   2015   2014   2013
CAPEX   $ 1.4   $ 2.8   $ 1.9   $ 1.4   $ 1.1
 
 

 

2018 CAPEX Plan

8"

 

12"

 

Total

33%

 

67%

 

US$1.1 billion

 

Fourth Quarter of 2018 Outlook & Guidance

Quarter-over-Quarter Guidance:

Recent Developments / Announcements

 
Sep. 13, 2018      

UMC Selected as a DJSI Global Component for 11(th) Consecutive Year

 
Aug. 20, 2018

UMC Shareholders Approve Agenda Items at Company's 2018 First Extraordinary General Meeting

 
Jul. 31, 2018

Allegro MicroSystems and UMC Sign Long-Term Foundry Agreement

 
Jul 25, 2018

UMC 2Q 2018 Financial Results

 

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

Conference Call / Webcast Announcement

 
Wednesday, October 24, 2018
 
Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)
 
Dial-in numbers and Access Codes:
USA Toll Free:       1-866 836-0101
Taiwan Number: 02-2192-8016
Other Areas: +886-2-2192-8016
 
Access Code: UMC
 

A live webcast and replay of the 3Q18 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 world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and 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 over 600,000 wafers per month. The company employs more than 20,000 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.

 

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of September 30, 2018
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

 
 
      September 30, 2018
US$   NT$   %
Assets
Current assets
Cash and cash equivalents 2,670 81,520 21.9%
Financial assets at fair value through profit or loss, current 14 422 0.1%
Contract assets, current 11 338 0.1%
Notes & Accounts receivable, net 839 25,610 6.9%
Inventories, net 576 17,589 4.7%
Other current assets 481 14,674 3.9%
Total current assets 4,591 140,153 37.6%
 
Non-current assets
Funds and investments 1,188 36,278 9.7%
Property, plant and equipment 5,821 177,716 47.7%
Other non-current assets 607 18,522 5.0%
Total non-current assets 7,616 232,516 62.4%
Total assets 12,207 372,669 100.0%
 
Liabilities
Current liabilities
Short-term loans 485 14,818 4.0%
Hedging financial liabilities, current 2 64 0.0%
Contract liabilities, current 65 1,979 0.5%
Payables 777 23,714 6.4%
Current portion of long-term liabilities 180 5,510 1.5%
Other current liabilities 176 5,348 1.4%
Total current liabilities 1,685 51,433 13.8%
 
Non-current liabilities
Bonds payable 1,271 38,788 10.4%
Long-term loans 939 28,670 7.7%
Other non-current liabilities 1,350 41,220 11.1%
Total non-current liabilities 3,560 108,678 29.2%
Total liabilities 5,245 160,111 43.0%
 
Equity
Equity attributable to the parent company
Capital 4,069 124,243 33.3%
Additional paid-in capital 1,319 40,270 10.8%

Retained earnings, unrealized gains or losses on financial assets measured at fair value through other comprehensive income, exchange differences on translation of foreign operations and gains or losses on hedging Instruments

1,640 50,068 13.5%
Treasury stock (82) (2,516) (0.7%)
Total equity attributable to the parent company 6,946 212,065 56.9%
Non-controlling interests 16 493 0.1%
Total equity 6,962 212,558 57.0%
Total liabilities and equity 12,207 372,669 100.0%
 
 
Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 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  
September 30, 2018   September 30, 2017   Chg. September 30, 2018   June 30, 2018 Chg.
US$   NT$ US$   NT$ % US$   NT$ US$   NT$ %
Net operating revenues 1,290 39,387 1,235 37,698 4.5% 1,290 39,387 1,273 38,852 1.4%
Operating costs (1,063) (32,465) (1,019) (31,106) 4.4% (1,063) (32,465) (1,054) (32,177) 0.9%
Gross profit 227 6,922 216 6,592 5.0% 227 6,922 219 6,675 3.7%
17.6% 17.6% 17.5% 17.5% 17.6% 17.6% 17.2% 17.2%
Operating expenses
- Sales and marketing expenses (32) (987) (35) (1,070) (7.8%) (32) (987) (36) (1,103) (10.5%)
- General and administrative expenses (46) (1,386) (32) (991) 39.9% (46) (1,386) (36) (1,083) 28.0%
- Research and development expenses (109) (3,329) (110) (3,343) (0.4%) (109) (3,329) (99) (3,027) 10.0%
Subtotal (187) (5,702) (177) (5,404) 5.5% (187) (5,702) (171) (5,213) 9.4%
Net other operating income and expenses 40 1,215 14 441 175.5% 40 1,215 56 1,719 (29.3%)
Operating income 80 2,435 53 1,629 49.5% 80 2,435 104 3,181 (23.5%)
6.2% 6.2% 4.3% 4.3% 6.2% 6.2% 8.2% 8.2%
 
Net non-operating income and expenses (53) (1,606) 41 1,236 - (53) (1,606) (36) (1,095) 46.7%
Income from continuing operations before

income tax

27 829 94 2,865 (71.1%) 27 829 68 2,086 (60.3%)
2.1% 2.1% 7.6% 7.6% 2.1% 2.1% 5.4% 5.4%
 
Income tax benefit (expense) (21) (632) (13) (401) 57.6% (21) (632) 11 331 -
Net income 6 197 81 2,464 (92.0%) 6 197 79 2,417 (91.8%)
0.5% 0.5% 6.5% 6.5% 0.5% 0.5% 6.2% 6.2%
 
Other comprehensive income (loss) (51) (1,568) (35) (1,068) 46.8% (51) (1,568) 87 2,641 -
 
Total comprehensive income (loss) (45) (1,371) 46 1,396 - (45) (1,371) 166 5,058 -
 
Net income attributable to:

Stockholders of the parent

56 1,720 114 3,473 (50.5%) 56 1,720 120 3,659 (53.0%)

Non-controlling interests

(50) (1,523) (33) (1,009) 50.9% (50) (1,523) (41) (1,242) 22.6%
 
Comprehensive income (loss) attributable to:

Stockholders of the parent

9 279 79 2,402 (88.4%) 9 279 206 6,297 (95.6%)

Non-controlling interests

(54) (1,650) (33) (1,006) 64.0% (54) (1,650) (40) (1,239) 33.2%
 
Earnings per share-basic 0.005 0.14 0.009 0.28 0.005 0.14 0.010 0.30
Earnings per ADS (2) 0.023 0.70 0.046 1.40 0.023 0.70 0.049 1.50
Weighted average number of shares
outstanding (in millions) 12,054 12,208 12,054 12,049
 
 
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 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$) and U.S. Dollars (US$)
 
 
      For the Three-Month Period Ended
September 30, 2018 		  For the Nine-Month Period Ended
September 30, 2018
US$   NT$   % US$   NT$   %
Net operating revenues 1,290 39,387 100.0% 3,791 115,735 100.0%
Operating costs (1,063) (32,465) (82.4%) (3,194) (97,496) (84.2%)
Gross profit 227 6,922 17.6% 597 18,239 15.8%
 
 
Operating expenses
- Sales and marketing expenses (32) (987) (2.5%) (98) (2,999) (2.6%)
- General and administrative expenses (46) (1,386) (3.5%) (114) (3,485) (3.0%)
- Research and development expenses (109) (3,329) (8.5%) (304) (9,280) (8.0%)
Subtotal (187) (5,702) (14.5%) (516) (15,764) (13.6%)
Net other operating income and expenses 40 1,215 3.1% 128 3,911 3.3%
Operating income 80 2,435 6.2% 209 6,386 5.5%
 
Net non-operating income and expenses (53) (1,606) (4.1%) (53) (1,615) (1.4%)
Income from continuing operations before

income tax

27 829 2.1% 156 4,771 4.1%
 
 
Income tax benefit (expense) (21) (632) (1.6%) 29 872 0.8%
Net income 6 197 0.5% 185 5,643 4.9%
 
Other comprehensive income (loss) (51) (1,568) (4.0%) 27 840 0.7%
 
Total comprehensive income (loss) (45) (1,371) (3.5%) 212 6,483 5.6%
 
Net income attributable to:

Stockholders of the parent

56 1,720 4.4% 288 8,780 7.6%

Non-controlling interests

(50) (1,523) (3.9%) (103) (3,137) (2.7%)
 
Comprehensive income (loss) attributable to:

Stockholders of the parent

9 279 0.7% 319 9,734 8.4%

Non-controlling interests

(54) (1,650) (4.2%) (107) (3,251) (2.8%)
 
Earnings per share-basic 0.005 0.14 0.024 0.73
Earnings per ADS (2) 0.023 0.70 0.120 3.65
 
Weighted average number of shares

outstanding (in millions)

12,054 12,101
 
 
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
 
 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Nine-Month Period Ended September 30, 2018
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
 
 
      US$   NT$
Cash flows from operating activities :
Net income before tax 156 4,771
Depreciation & Amortization 1,298 39,635
Exchange loss on financial assets and liabilities 42 1,286
Changes in notes & accounts receivable (109) (3,322)
Changes in other current assets 34 1,051
Changes in contract liabilities (65) (1,970)
Changes in other payables (36) (1,091)
Changes in assets, liabilities and others (49) (1,548)
Net cash provided by operating activities 1,271 38,812
 
Cash flows from investing activities :
Acquisition of investments accounted for under the equity method (28) (840)
Acquisition of property, plant and equipment (499) (15,229)
Increase in refundable deposits (28) (861)
Others 198 6,044
Net cash used in investing activities (357) (10,886)
 
Cash flows from financing activities :
Decrease in short-term loans (343) (10,469)
Redemption of bonds (246) (7,500)
Cash dividends (280) (8,557)
Treasury stock acquired (102) (3,129)
Treasury stock sold to employees 72 2,204
Others (10) (310)
Net cash used in financing activities (909) (27,761)
 
Effect of exchange rate changes on cash and cash equivalents (10) (320)
Net decrease in cash and cash equivalents (5) (155)
 
Cash and cash equivalents at beginning of period 2,675 81,675
 
Cash and cash equivalents at end of period 2,670 81,520
 
 
Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.
 


Contact:

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