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:

Revenue: NT$39.39 billion (US$1.29 billion)
Gross margin: 17.6%
Foundry revenue from 28nm: 13%; Foundry operating margin: 6.4%
Foundry capacity utilization rate: 94%
Net Income attributable to stockholders of the parent: NT$1.72 billion (US$56 million)
Earnings per share: NT$0.14; earnings per ADS: US$0.023

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

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