Significant revenue growth will drive 2Q to operating profitability
TAIPEI, Taiwan, April 29 /PRNewswire-Asia-FirstCall/ --
First Quarter 2009 Overview (Note 1):
-- Revenue decreased 41.5% sequentially to NT$10.84 billion (US$319
million)
-- Gross margin of -40%, operating margin of -67.5%
-- Net loss of NT$8.16 billion (US$240 million)
-- Operating Cash inflow of NT$3.75 billion, with cash & cash eq. of
NT$35.91 billion
-- Loss per share of NT$0.64; Loss per ADS of US$0.094
Note 1: Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are un-audited, unconsolidated, and represent comparisons among the three-month period ending March 31, 2009, the three-month period ending December 31, 2008, and the equivalent three-month period that ended March 31, 2008. For all 1Q09 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the March 31, 2009 exchange rate of NT$33.95 per U.S. Dollar.
United Microelectronics Corporation (NYSE: UMC) (TSE: 2303) ("UMC" or "the Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the first quarter of 2009. Revenue decreased 41.5% quarter-over-quarter to NT$10.84 billion, from NT$18.54 billion in 4Q08, and decreased 54.8% year-over-year from NT$24 billion in 1Q08. Gross margin for the quarter was -40%, operating margin was -67.5%. Net loss in 1Q09 was NT$8.16 billion, with loss-per-share at NT$0.64.
Dr. Shih-Wei Sun, CEO of UMC said, "Q1 2009 was challenging for UMC, due to a sharp drop in customer demand caused by the global economic downturn. As a result, UMC's wafer shipments for the quarter dropped to 384 thousand 8-inch equivalent wafers with utilization rate at 30%. UMC also reported higher operating costs associated with the adoption of ROC SFAS No.10, resulting in gross margin of -40%. Despite these factors, UMC remained financially solid in Q1, maintaining positive free cash flow of NT$2.18 billion and cash equivalents at NT$35.91 billion. However, recent orders indicate strong demand for Q2, confirming our assessment from last quarter's conference that demand had already bottomed out. UMC expects Q2 revenues to grow significantly with loss turning to profit. Moreover, we are optimistic about the longer-term prospect of the foundry industry and demand growth. As global economic uncertainties continue, we will closely watch our customers' inventory consumption, end market demands and the introduction of new applications so that we can quickly respond to any status changes when necessary."
Dr. Sun continued, "With regard to UMC's recent rush orders, we will work diligently to meet urgent order deliveries for these customers. However, our mid- to long-term capacity plans, including capacity conversion to a more favorable technology mix, 45/40nm ramp to 300mm volume production and acquiring the most advanced R&D equipment, are all in progress and fully capable of satisfying our customers' manufacturing requirements."
"UMC's advanced R&D efforts and equipment upgrades will proceed as planned despite economic uncertainties to continuously bolster our long-term competitiveness. For example, we have already delivered customer ICs manufactured on UMC's independently developed high performance 40nm process. The large die-size programmable logic chips are being produced with excellent cycle time and yields. Many other customer 45/40nm designs will enter pilot and verification stages later this year, further contributing to UMC's financial performance when these designs enter volume production. With regard to more advanced 28nm process technology, with several customers involved in the current development stage, we are progressing smoothly at UMC's R&D center in Tainan. For this technology node, UMC will provide low power and high performance Poly/SiON and HK/MG process technologies to meet the performance and power needs of various applications."
Recently, two global semiconductor companies, one from Taiwan and another from the USA, awarded UMC with honors of "2008 Best Fab Award" and "2008 Supplier Excellence Award", respectively. This recognition underscores UMC's strategy of delivering "Customer-Driven Foundry Solutions" to create a win-win situation for UMC and its customers.
Summary of Operating Results
Operating Results
QoQ% YoY%
(Amount: NT$ million) 1Q09 4Q08 change 1Q08 change
Revenue 10,838 18,541 (41.5) 24,003 (54.8)
Gross Profit (Loss) (4,335) (804) 439.2 3,647 --
Operating Expenses (2,982) (3,073) (3.0) (3,386) (11.9)
Operating Income (Loss) (7,317) (3,877) 88.7 261 --
Non-op. Income
(Expenses) (843) (19,081) (95.6) (0) 93,566.7
Net Income (Loss) (8,160) (23,510) (65.3) 206 --
EPS (NT$ per share) (0.64) (1.81) -- 0.02 --
(US$ per ADS) (0.094) (0.267) -- 0.003 --
Revenue decreased 41.5% QoQ to NT$10.84 billion, from NT$18.54 billion in 4Q08, and decreased 54.8% YoY, from NT$24 billion in 1Q08. Weakening global semiconductor demand was the key reason for the decrease in revenue. Gross loss was NT$4.34 billion, or 40% of revenue, compared to NT$0.8 billion, or 4.3% of 4Q08 revenue. Operating loss for the quarter was NT$7.32 billion, or 67.5% of revenue, compared to NT$3.88 billion, or 20.9% of 4Q08 revenue. Except for weakening demand, the weaker gross margin and operating margin in the first quarter also attributed to the adoption of ROC SFAS No.10, which requires fixed production costs allocated to idle capacity to be accounted for in COGS if actual loading is lower than normal capacity and "Loss on decline in market value and obsolescence of inventories" (LCM) to be accounted for in COGS instead of Non-operating expenses. Net loss in 1Q09 was NT$8.16 billion, compared to NT$23.51 billion in 4Q08.
Loss per ordinary share for the quarter was NT$0.64. Loss per ADS was US$0.094. One ADS represents five Taiwan-listed ordinary shares. The basic weighted average number of outstanding shares in 1Q09 was 12,767,114,132, compared with 12,971,740,926 shares in 4Q08 and 13,171,692,578 shares in 1Q08. The diluted weighted average number of outstanding shares was 12,767,114,132 in 1Q09, compared with 12,971,740,926 shares in 4Q08 and 13,418,161,562 shares in 1Q08. The fully diluted share count on March 31, 2009 was 13,576,836 thousand. On March 31, 2009, UMC held 300,000 thousand treasury shares acquired from the 13th share buy-back program. UMC completed the 13th share buy-back program on February 16, 2009.
Detailed Financials Section
COGS & Expenses
QoQ% YoY%
(Amount: NT$ million) 1Q09 4Q08 change 1Q08 change
Revenue 10,838 18,541 (41.5) 24,003 (54.8)
CoGS (15,173) (19,345) (21.6) (20,356) (25.5)
Depreciation (6,973) (7,682) (9.2) (8,098) (13.9)
Other Mfg. Costs (8,200) (11,663) (29.7) (12,258) (33.1)
Gross Profit (4,335) (804) 439.2 3,647 (218.9)
Gross Margin (%) (40.0%) (4.3%) -- 15.2% --
Total Operating Exp. (2,982) (3,073) (2.9) (3,386) (11.9)
G&A (529) (428) 23.7 (636) (16.8)
Sales & Marketing (632) (679) (6.9) (716) (11.7)
R&D (1,821) (1,966) (7.4) (2,034) (10.5)
Operating Income (7,317) (3,877) 88.7 216 (2,903.4)
Operating Margin (%) (67.5%) (20.9%) -- 1.1% --
