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UMC Reports Second Quarter 2019 Results

Company posts 15.7% gross margin and NT$0.15 EPS  

Second Quarter 2019 Overview1:

TAIPEI, Taiwan — (BUSINESS WIRE) — July 24, 2019United 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 2019.

Second quarter consolidated revenue was NT$36.03 billion, up 10.6% QoQ from NT$32.58 billion in 1Q19 and down 7.3% YoY from NT$38.85 billion in 2Q18. Consolidated gross margin for 2Q19 was 15.7%. Net income attributable to stockholders of the parent was NT$1.74 billion, with earnings per ordinary share of NT$0.15.

Jason Wang, co-president of UMC, said, “In the second quarter, foundry revenue grew 10.6% QoQ to NT$36.00 billion, leading to a foundry operating margin of 5.3%. Utilization rate increased to 88%, bringing wafer shipments to 1.73 million 8-inch equivalent wafers. 2Q19 results reflected higher contribution from 12" technology nodes, which experienced strength from the wireless communication segment including chips found in entry level to mid-end smartphones, switches and routers. During the quarter, we generated a free cash flow of NT$8.17 billion. We remain committed to strengthening our financial metrics, and on June 19, 2019, UMC’s Board of Directors approved the cancellation of 400 million ordinary treasury shares, which will reduce UMC’s ordinary shares by 3.3%.”

Co-president Wang further commented, “Despite US-China trade tensions creating market uncertainty, we anticipate that specific areas within the wireless communication sector will have a short term upward adjustment in the supply chain, which should lead to a slight increase in wafer demand. However, we have observed that customers are continuing to manage their inventory carefully amid a weakened global economic environment, which may contribute to lower visibility in business forecast during the second half of 2019. In the meantime, we continue to actively implement measures intended to enhance our foundry competitiveness, such as focusing resources to capitalize on our existing strength in mainstream logic and specialty processes while offering more diversified technology platforms to customers.”

Summary of Operating Results

Operating Results

(Amount: NT$ million)

2Q19

1Q19

QoQ %
change

2Q18

YoY %
change

Operating Revenues

36,031

32,583

10.6

38,852

(7.3)

Gross Profit

5,652

2,262

149.9

6,675

(15.3)

Operating Expenses

(5,578)

(4,932)

13.1

(5,213)

7.0

Net Other Operating Income and Expenses

1,687

1,073

57.2

1,719

(1.9)

Operating Income (Loss)

1,761

(1,597)

-

3,181

(44.6)

Net Non-Operating Income and Expenses

(617)

1,247

-

(1,095)

(43.7)

Net Income Attributable to Stockholders of the Parent

1,740

1,201

44.9

3,659

(52.4)

EPS (NT$ per share)

0.15

0.10

 

0.30

 

(US$ per ADS)

0.024

0.016

 

0.048

 

Operating revenues in 2Q19 increased 10.6% to NT$36.03 billion, including NT$36.00 billion from the foundry segment. Revenue contribution from 40nm and below technologies grew to 37%. Gross profit increased 149.9% to NT$5.65 billion, or 15.7% of revenue. Operating expenses increased 13.1% to NT$5.58 billion. Net other operating income was NT$1.69 billion, leading to an operating income of NT$1.76 billion. Net non-operating expense was NT$617 million. Net income attributable to stockholders of the parent was NT$1.74 billion.

Earnings per ordinary share for the quarter was NT$0.15. Earnings per ADS was US$0.024. The basic weighted average number of outstanding shares in 2Q19 was 11,817,657,562, compared with 11,908,706,645 shares in 1Q19 and 12,048,575,089 shares in 2Q18. The diluted weighted average number of outstanding shares was 13,079,662,179 in 2Q19, compared with 13,238,181,278 shares in 1Q19 and 13,268,862,054 shares in 2Q18. The fully diluted share count on June 30, 2019 was approximately 12,986,324,000. During 2Q19, UMC retired 400 million treasury shares acquired from the 17th and 20th share buy-back programs.

Detailed Financials Section

COGS & Expenses

(Amount: NT$ million)

2Q19

1Q19

QoQ %
change

2Q18

YoY %
change

Operating Revenues

36,031

32,583

10.6

38,852

(7.3)

COGS

(30,379)

(30,321)

0.2

(32,177)

(5.6)

Depreciation

(11,424)

(10,497)

8.8

(12,139)

(5.9)

Other Mfg. Costs

(18,955)

(19,824)

(4.4)

(20,038)

(5.4)

Gross Profit

5,652

2,262

149.9

6,675

(15.3)

Gross Margin (%)

15.7%

6.9%

 

17.2%

 

Operating Expenses

(5,578)

(4,932)

13.1

(5,213)

7.0

G&A

(1,251)

(1,236)

1.1

(1,083)

15.5

Sales & Marketing

(953)

(889)

7.2

(1,103)

(13.6)

R&D

(2,787)

(2,807)

(0.7)

(3,027)

(7.9)

Expected Credit Losses

(587)

-

100.0

-

100.0

Net Other Operating

Income & Expenses

1,687

1,073

57.2

1,719

(1.9)

Operating Income (Loss)

1,761

(1,597)

-

3,181

(44.6)

Operating revenues grew 10.6% to NT$36.03 billion. COGS remained relatively unchanged at NT$30.38 billion, as depreciation increased 8.8% to NT$11.42 billion while other manufacturing costs declined 4.4% to NT$18.96 billion. Gross profit was NT$5.65 billion. Operating expenses rose 13.1% to NT$5.58 billion, which included a 7.2% increase in Sales & Marketing to NT$953 million and a NT$587 million in Expected Credit Losses. R&D expense accounted for 7.7% of 2Q19 operating revenues and net other operating income was NT$1.69 billion. In 2Q19, the company realized an operating income of NT$1.76 billion.

Non-Operating Income and Expenses

(Amount: NT$ million)

2Q19

1Q19

2Q18

Non-Operating Income and Expenses

(617)

1,247

(1,095)

Net Interest Income and Expenses

(497)

(473)

(505)

Net Investment Gain and Loss

69

1,228

105

Exchange Gain and Loss

(182)

507

(720)

Other Gain and Loss

(7)

(15)

25

Net non-operating expense in 2Q19 was NT$617 million, primarily resulting from NT$497 million in net interest expense and NT$182 million in exchange loss, partly offset by NT$69 million in net investment gain.

Cash Flow Summary

(Amount: NT$ million)

For the 3-Month Period Ended

Jun. 30, 2019

For the 3-Month Period Ended

Mar. 31, 2019

Cash Flow from Operating Activities

12,268

8,183

Net income (loss) before tax

1,144

(350)

Depreciation & Amortization

12,185

12,380

Expected credit losses

587

-

Net loss (gain) of financial assets

and liabilities at FVTPL

274

(1,032)

Share of profit or loss of associates and

joint ventures

(201)

(196)

Exchange loss (gain) on financial assets and liabilities

583

(554)

Changes in working capital

(1,047)

(1,339)

Interest paid

(994)

(215)

Other

(263)

(511)

Cash Flow from Investing Activities

(4,188)

(5,683)

Acquisition of PP&E

(3,904)

(5,563)

Acquisition of intangible assets

(247)

(530)

Other

(37)

410

Cash Flow from Financing Activities

(6,467)

2,180

Bank loans

(1,197)

2,463

Redemption of bonds

(2,500)

-

Treasury stock acquired

(2,641)

(331)

Other

(129)

48

Effect of Exchange Rate

10

396

Net Cash Flow

1,623

5,076

Beginning balance

88,738

83,662

Changes in non-current assets held for sale

(5)

-

Ending balance

90,356

88,738

Cash inflow from operating activities was NT$12.27 billion while foundry CAPEX was NT$4.09 billion, leading to free cash flow of NT$8.17 billion. Cash outflow from financing activities totaled NT$6.47 billion, including NT$2.64 billion in payment for treasury share buyback, NT$2.50 billion in redemption of bonds and NT$1.20 billion in bank loans. Net cash inflow in 2Q19 was NT$1.62 billion. Over the next 12 months, the company expects to repay NT$2.73 billion in bank loans.

Current Assets

(Amount: NT$ billion)

2Q19

1Q19

2Q18

Cash and Cash Equivalents

90.36

88.74

75.19

Notes & Accounts Receivable

24.39

22.99

27.01

Days Sales Outstanding

60

66

61

Inventories, net

19.63

18.87

17.66

Days of Inventory

58

56

49

Total Current Assets

150.51

146.80

137.08

Cash and cash equivalents increased to NT$90.36 billion. Days of inventory increased two days to 58 days.

Liabilities

(Amount: NT$ billion)

2Q19

1Q19

2Q18

Total Current Liabilities

77.06

52.64

59.17

Notes & Accounts Payable

6.91

6.78

7.41

Short-Term Credit / Bonds

39.43

23.35

17.23

Payable on Equipment

2.60

2.95

3.61

Dividends Payable

6.92

-

8.56

Other

21.20

19.56

22.36

Long-Term Credit / Bonds

45.39

64.98

67.76

Long-Term Investment Liabilities

20.83

20.99

20.79

Total Liabilities

167.84

164.32

170.11

Debt to Equity

83%

78%

81%

Current liabilities increased to NT$77.06 billion. Total liabilities increased to NT$167.84 billion, leading to a debt to equity ratio of 83%.

Analysis of Revenue2 for Foundry Segment

Revenue Breakdown by Region

Region

2Q19

1Q19

4Q18

3Q18

2Q18

North America

31%

32%

38%

34%

37%

Asia Pacific

59%

57%

51%

52%

51%

Europe

7%

7%

8%

11%

9%

Japan

3%

4%

3%

3%

3%

Revenue from Asia Pacific expanded to 59%, as revenue contribution from North American customers slightly fell to 31%. Revenue from Europe and Japan was 7% and 3%, respectively.

Revenue Breakdown by Geometry

Geometry

2Q19

1Q19

4Q18

3Q18

2Q18

14nm and below

0%

0%

1%

5%

3%

14nm<x<=28nm

13%

10%

10%

13%

15%

28nm<x<=40nm

24%

20%

23%

22%

26%

40nm<x<=65nm

14%

14%

13%

12%

12%

65nm<x<=90nm

12%

12%

11%

10%

7%

90nm<x<=0.13um

14%

15%

13%

11%

11%

0.13um<x<=0.18um

12%

15%

15%

14%

13%

0.18um<x<=0.35um

8%

11%

11%

10%

10%

0.5um and above

3%

3%

3%

3%

3%

Revenue contribution from 28nm grew to 13% while 40nm business represented 24% of sales.

Revenue Breakdown by Customer Type

Customer Type

2Q19

1Q19

4Q18

3Q18

2Q18

Fabless

93%

94%

92%

93%

92%

IDM

7%

6%

8%

7%

8%

Revenue from fabless customers decreased to 93% of revenue.

Revenue Breakdown by Application (1)

Application

2Q19

1Q19

4Q18

3Q18

2Q18

Computer

14%

15%

15%

19%

16%

Communication

52%

48%

44%

43%

47%

Consumer

28%

29%

30%

28%

28%

Others

6%

8%

11%

10%

9%

The communication segment accounted for 52% of sales, while revenue from consumer applications remained relatively flat at 28%. Computer related applications contributed 14% of revenue.

(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) in 2Q19 slightly increased.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q19_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer Shipments

 

2Q19

1Q19

4Q18

3Q18

2Q18

Wafer Shipments
(8” K equivalents)

1,730

1,611

1,711

1,804

1,846

 

Quarterly Capacity Utilization Rate

 

2Q19

1Q19

4Q18

3Q18

2Q18

Utilization Rate

88%

83%

88%

94%

97%

Total Capacity
(8” K equivalents)

1,970

1,937

1,958

1,938

1,918

In 2Q19, wafer shipments grew 7.4% to 1,730K. Quarterly capacity increased 1.7% QoQ to 1,970K, resulting in an overall utilization rate of 88%.

Capacity4 for Foundry Segment

Total capacity in the second quarter reached 1,970K 8-inch equivalent wafers. We anticipate third quarter capacity to increase by approximately 1.7% QoQ to 2,004K 8-inch equivalent wafers, mainly from expansion at Fab 12i.

Annual Capacity in

thousands of wafers

 

Quarterly Capacity in

thousands of wafers

FAB

Geometry
(um)

2018

2017

2016

2015

 

FAB

3Q19E

2Q19

1Q19

4Q18

WTK

6"

3.5 – 0.45

396

422

423

421

 

WTK

93

93

91

93

Fab 8A

8"

0.5 – 0.25

825

825

827

813

 

Fab 8A

207

207

204

207

Fab 8C

8"

0.35 – 0.11

383

357

348

347

 

Fab 8C

111

109

106

108

Fab 8D

8"

0.13 – 0.09

347

341

342

341

 

Fab 8D

90

90

89

90

Fab 8E

8"

0.5 – 0.18

418

418

419

418

 

Fab 8E

107

105

103

105

Fab 8F

8"

0.18 – 0.11

431

417

401

388

 

Fab 8F

110

108

107

108

Fab 8S

8"

0.18 – 0.11

372

347

336

335

 

Fab 8S

93

93

92

93

HJ

8"

0.5 – 0.11

771

753

750

667

 

HJ

208

205

201

194

Fab 12A

12"

0.13 – 0.014

997

970

885

793

 

Fab 12A

250

250

246

250

Fab 12i

12"

0.13 – 0.040

555

537

584

572

 

Fab 12i

155

144

141

144

USCXM

12"

0.040 – 0.028

183

97

9

-

 

USCXM

51

51

50

51

Total(1)

7,673

7,304

6,983

6,617

 

Total

2,004

1,970

1,937

1,958

YoY Growth Rate

5%

5%

6%

5%

 

 

 

 

 

 

(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

2018

2017

2016

2015

2014

CAPEX

$ 0.7

$ 1.4

$ 2.8

$ 1.9

$ 1.4

 

 

2019 CAPEX Plan

8"

12"

Total

25%

75%

US$1.0 billion

 

CAPEX spending in 2Q19 was US$131 million, leading to US$318 million in capital expenditure for the first half of 2019. Full year 2019 CAPEX is budgeted for US$1.0 billion.

Third Quarter of 2019 Outlook & Guidance

Quarter-over-Quarter Guidance:

  1. Wafer Shipments: To increase by 2-4%
  2. ASP in USD: To increase by 1%
  3. Profitability: Gross profit margin will be in the mid-teens % range
  4. Foundry Segment Capacity Utilization: high-80% range
  5. 2019 CAPEX for Foundry Segment: US$1.0 billion

Recent Developments / Announcements

Jun 12, 2019

UMC Shareholders Approve NT$0.58 Cash Dividend at Annual Shareholders Meeting

May 30, 2019

UMC Among Highest Ranked in Corporate Governance Evaluation for 5th Consecutive Year

April 25, 2019

UMC Files Form 20-F for 2018 with US Securities and Exchange Commission

April 24, 2019

UMC 1Q 2019 Financial Results

 

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

Conference Call / Webcast Announcement

Wednesday, July 24, 2019

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 2Q19 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 more than 600,000 wafers per month. The company employs approximately 18,500 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 release 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.

- FINANCIAL TABLES TO FOLLOW -

 
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of June 30, 2019
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
 
 
June 30, 2019
US$ NT$ %
Assets
Current assets
Cash and cash equivalents

2,909

90,356

24.4%

Financial assets at fair value through profit or loss, current

20

614

0.2%

Notes & Accounts receivable, net

785

24,386

6.6%

Inventories, net

632

19,629

5.3%

Other current assets

500

15,522

4.2%

Total current assets

4,846

150,507

40.7%

 
Non-current assets
Funds and investments

1,219

37,861

10.2%

Property, plant and equipment

5,101

158,440

42.8%

Right-of-use assets

268

8,315

2.3%

Other non-current assets

476

14,812

4.0%

Total non-current assets

7,064

219,428

59.3%

Total assets

11,910

369,935

100.0%

 
Liabilities
Current liabilities
Short-term loans

525

16,320

4.4%

Payables

763

23,707

6.4%

Dividends payable

223

6,916

1.9%

Current portion of long-term liabilities

744

23,105

6.3%

Other current liabilities

226

7,007

1.8%

Total current liabilities

2,481

77,055

20.8%

 
Non-current liabilities
Bonds payable

602

18,686

5.1%

Long-term loans

860

26,708

7.2%

Lease liabilities, noncurrent

174

5,395

1.5%

Other non-current liabilities

1,287

39,997

10.8%

Total non-current liabilities

2,923

90,786

24.6%

Total liabilities

5,404

167,841

45.4%

 
Equity
Equity attributable to the parent company
Capital

3,775

117,243

31.7%

Additional paid-in capital

1,263

39,240

10.6%

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

1,459

45,301

12.2%

Treasury stock

(4)

(120)

(0.0%)

Total equity attributable to the parent company

6,493

201,664

54.5%

Non-controlling interests

13

430

0.1%

Total equity

6,506

202,094

54.6%

Total liabilities and equity

11,910

369,935

100.0%

 
 
 
Note:New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2019 exchange rate of NT $31.06 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, 2019 June 30, 2018 Chg. June 30, 2019 March 31, 2019 Chg.
US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %
Operating revenues

1,160

36,031

1,251

38,852

(7.3%)

1,160

36,031

1,049

32,583

10.6%

Operating costs

(978)

(30,379)

(1,036)

(32,177)

(5.6%)

(978)

(30,379)

(976)

(30,321)

0.2%

Gross profit

182

5,652

215

6,675

(15.3%)

182

5,652

73

2,262

149.9%

15.7%

15.7%

17.2%

17.2%

15.7%

15.7%

6.9%

6.9%

Operating expenses
- Sales and marketing expenses

(31)

(953)

(36)

(1,103)

(13.6%)

(31)

(953)

(29)

(889)

7.2%

- General and administrative expenses

(39)

(1,251)

(35)

(1,083)

15.5%

(39)

(1,251)

(40)

(1,236)

1.1%

- Research and development expenses

(90)

(2,787)

(97)

(3,027)

(7.9%)

(90)

(2,787)

(90)

(2,807)

(0.7%)

- Expected credit losses

(19)

(587)

-

-

100.0%

(19)

(587)

-

-

100.0%

Subtotal

(179)

(5,578)

(168)

(5,213)

7.0%

(179)

(5,578)

(159)

(4,932)

13.1%

Net other operating income and expenses

54

1,687

55

1,719

(1.9%)

54

1,687

35

1,073

57.2%

Operating income (loss)

57

1,761

102

3,181

(44.6%)

57

1,761

(51)

(1,597)

-

4.9%

4.9%

8.2%

8.2%

4.9%

4.9%

(4.9%)

(4.9%)

 
Net non-operating income and expenses

(20)

(617)

(35)

(1,095)

(43.7%)

(20)

(617)

40

1,247

-

Income (loss) from continuing operations
before income tax

37

1,144

67

2,086

(45.2%)

37

1,144

(11)

(350)

-

3.2%

3.2%

5.4%

5.4%

3.2%

3.2%

(1.1%)

(1.1%)

 
Income tax benefit (expense)

(7)

(202)

11

331

-

(7)

(202)

14

443

-

Net income

30

942

78

2,417

(61.0%)

30

942

3

93

917.6%

2.6%

2.6%

6.2%

6.2%

2.6%

2.6%

0.3%

0.3%

 
Other comprehensive income (loss)

24

743

85

2,641

(71.9%)

24

743

116

3,614

(79.5%)

 
Total comprehensive income (loss)

54

1,685

163

5,058

(66.7%)

54

1,685

119

3,707

(54.6%)

 
Net income attributable to:
  Stockholders of the parent

56

1,740

118

3,659

(52.4%)

56

1,740

39

1,201

44.9%

  Non-controlling interests

(26)

(798)

(40)

(1,242)

(35.7%)

(26)

(798)

(36)

(1,108)

(28.0%)

 
Comprehensive income (loss) attributable to:
  Stockholders of the parent

80

2,488

203

6,297

(60.5%)

80

2,488

155

4,813

(48.3%)

  Non-controlling interests

(26)

(803)

(40)

(1,239)

(35.2%)

(26)

(803)

(36)

(1,106)

(27.4%)

 
Earnings per share-basic

0.005

0.15

0.010

0.30

0.005

0.15

0.003

0.10

Earnings per ADS (2)

0.024

0.75

0.048

1.50

0.024

0.75

0.016

0.50

Weighted average number of shares
outstanding (in millions)

11,818

12,049

11,818

11,909

 
 
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2019 exchange rate of NT $31.06 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) 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, 2019 June 30, 2019
US$ NT$ % US$ NT$ %
Operating revenues

1,160

36,031

100.0%

2,209

68,614

100.0%

Operating costs

(978)

(30,379)

(84.3%)

(1,954)

(60,700)

(88.5%)

Gross profit

182

5,652

15.7%

255

7,914

11.5%

 
 
Operating expenses
- Sales and marketing expenses

(31)

(953)

(2.6%)

(59)

(1,841)

(2.7%)

- General and administrative expenses

(39)

(1,251)

(3.6%)

(81)

(2,488)

(3.5%)

- Research and development expenses

(90)

(2,787)

(7.7%)

(180)

(5,594)

(8.2%)

- Expected credit losses

(19)

(587)

(1.6%)

(19)

(587)

(0.9%)

Subtotal

(179)

(5,578)

(15.5%)

(339)

(10,510)

(15.3%)

Net other operating income and expenses

54

1,687

4.7%

89

2,760

4.0%

Operating income

57

1,761

4.9%

5

164

0.2%

 
Net non-operating income and expenses

(20)

(617)

(1.7%)

21

630

1.0%

Income from continuing operations
before income tax

37

1,144

3.2%

26

794

1.2%

 
 
Income tax benefit (expense)

(7)

(202)

(0.6%)

7

241

0.3%

Net income

30

942

2.6%

33

1,035

1.5%

 
Other comprehensive income (loss)

24

743

2.1%

141

4,357

6.4%

 
Total comprehensive income (loss)

54

1,685

4.7%

174

5,392

7.9%

 
Net income attributable to:
  Stockholders of the parent

56

1,740

4.8%

95

2,942

4.3%

  Non-controlling interests

(26)

(798)

(2.2%)

(62)

(1,907)

(2.8%)

 
Comprehensive income (loss) attributable to:
  Stockholders of the parent

80

2,488

6.9%

235

7,301

10.6%

  Non-controlling interests

(26)

(803)

(2.2%)

(61)

(1,909)

(2.7%)

 
Earnings per share-basic

0.005

0.15

0.008

0.25

Earnings per ADS (2)

0.024

0.75

0.040

1.25

 
Weighted average number of shares
outstanding (in millions)

11,818

11,863

 
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2019 exchange rate of NT $31.06 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Six-Month Period Ended June 30, 2019
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
 
US$ NT$
Cash flows from operating activities :
Net income before tax

26

794

Depreciation & Amortization

791

24,565

Expected credit losses

19

587

Net gain of financial assets and liabilities at fair value through profit or loss

(24)

(758)

Changes in notes & accounts receivable

(38)

(1,184)

Changes in inventories

(44)

(1,363)

Changes in assets, liabilities and others

(72)

(2,190)

Net cash provided by operating activities

658

20,451

 
Cash flows from investing activities :
Acquisition of property, plant and equipment

(305)

(9,467)

Acquisition of intangible assets

(25)

(777)

Others

12

374

Net cash used in investing activities

(318)

(9,870)

 
Cash flows from financing activities :
Increase in short-term loans

97

3,001

Redemption of bonds

(80)

(2,500)

Proceeds from long-term loans

25

783

Repayments of long-term loans

(81)

(2,518)

Treasury stock acquired

(96)

(2,972)

Others

(3)

(82)

Net cash used in financing activities

(138)

(4,288)

 
Effect of exchange rate changes on cash and cash equivalents

13

406

Net increase in cash and cash equivalents

215

6,699

 
Cash and cash equivalents at beginning of period

2,694

83,662

 
Cash and cash equivalents at end of period

2,909

90,361

 
Reconciliation of the balances of cash and cash equivalents at end of period :
Cash and cash equivalents balances on the consolidated balance sheets

2,909

90,356

Cash and cash equivalents included in non-current assets held for sale

0

5

Cash and cash equivalents at end of period

2,909

90,361

 
 
Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2019 exchange rate of NT $31.06 per U.S. Dollar.
 

 


1Unless 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 June 30, 2019, the three-month period ending March 31, 2019, and the equivalent three-month period that ended June 30, 2018. For all 2Q19 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the June 30, 2019 exchange rate of NT$ 31.06 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.



Contact:

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