UMC Reports Fourth Quarter 2018 Results

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 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 December 31, 2018
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


	December 31, 2018
	US$		NT$		%
Assets
Current assets
Cash and cash equivalents	2,723		83,662		22.9	%
Financial assets at fair value through profit or loss, current	17		528		0.1	%
Contract assets, current	3		92		0.0	%
Notes & Accounts receivable, net	777		23,875		6.5	%
Inventories, net	593		18,203		5.0	%
Other current assets	483		14,833		4.2	%
Total current assets	4,596		141,193		38.7	%

Non-current assets
Funds and investments	1,091		33,523		9.2	%
Property, plant and equipment	5,627		172,847		47.4	%
Other non-current assets	555		17,042		4.7	%
Total non-current assets	7,273		223,412		61.3	%
Total assets	11,869		364,605		100.0	%

Liabilities
Current liabilities
Short-term loans	427		13,104		3.6	%
Contract liabilities, current	30		932		0.3	%
Payables	824		25,325		6.9	%
Current portion of long-term liabilities	167		5,121		1.4	%
Other current liabilities	177		5,417		1.5	%
Total current liabilities	1,625		49,899		13.7	%

Non-current liabilities
Bonds payable	1,266		38,879		10.7	%
Long-term loans	918		28,204		7.7	%
Other non-current liabilities	1,337		41,086		11.3	%
Total non-current liabilities	3,521		108,169		29.7	%
Total liabilities	5,146		158,068		43.4	%

Equity
Equity attributable to the parent company
Capital	4,044		124,243		34.1	%
Additional paid-in capital	1,315		40,399		11.1	%
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	1,533		47,075		12.9	%
Treasury stock	(184	)	(5,647	)	(1.6	%)
Total equity attributable to the parent company	6,708		206,070		56.5	%
Non-controlling interests	15		467		0.1	%
Total equity	6,723		206,537		56.6	%
Total liabilities and equity	11,869		364,605		100.0	%


Note：New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2018 exchange rate of NT $30.72 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
	December 31, 2018				December 31, 2017				Chg.		December 31, 2018				September 30, 2018				Chg.
	US$		NT$		US$		NT$		%		US$		NT$		US$		NT$		%
Net operating revenues	1,156		35,517		1,192		36,631		(3.0	%)	1,156		35,517		1,282		39,387		(9.8	%)
Operating costs	(1,006	)	(30,916	)	(987	)	(30,333	)	1.9	%	(1,006	)	(30,916	)	(1,057	)	(32,465	)	(4.8	%)
Gross profit	150		4,601		205		6,298		(26.9	%)	150		4,601		225		6,922		(33.5	%)
	13.0	%	13.0	%	17.2	%	17.2	%			13.0	%	13.0	%	17.6	%	17.6	%
Operating expenses
- Sales and marketing expenses	(29	)	(903	)	(31	)	(944	)	(4.3	%)	(29	)	(903	)	(32	)	(987	)	(8.5	%)
- General and administrative expenses	(44	)	(1,339	)	(38	)	(1,164	)	15.0	%	(44	)	(1,339	)	(45	)	(1,386	)	(3.4	%)
- Research and development expenses	(122	)	(3,745	)	(100	)	(3,090	)	21.2	%	(122	)	(3,745	)	(109	)	(3,329	)	12.5	%
- Expected credit loss	(13	)	(409	)	-		-		100.0	%	(13	)	(409	)	-		-		100.0	%
Subtotal	(208	)	(6,396	)	(169	)	(5,198	)	23.0	%	(208	)	(6,396	)	(186	)	(5,702	)	12.2	%
Net other operating income and expenses	39		1,206		26		801		50.6	%	39		1,206		40		1,215		(0.7	%)
Operating income (loss)	(19	)	(589	)	62		1,901		-		(19	)	(589	)	79		2,435		-
	(1.7	%)	(1.7	%)	5.2	%	5.2	%			(1.7	%)	(1.7	%)	6.2	%	6.2	%

Net non-operating income and expenses	(65	)	(1,998	)	(5	)	(152	)	1,214.5	%	(65	)	(1,998	)	(52	)	(1,606	)	24.4	%
Income (loss) from continuing operations before income tax	(84	)	(2,587	)	57		1,749		-		(84	)	(2,587	)	27		829		-
	(7.3	%)	(7.3	%)	4.8	%	4.8	%			(7.3	%)	(7.3	%)	2.1	%	2.1	%

Income tax expense	(14	)	(413	)	(18	)	(556	)	(25.7	%)	(14	)	(413	)	(21	)	(632	)	(34.7	%)
Net income (loss)	(98	)	(3,000	)	39		1,193		-		(98	)	(3,000	)	6		197		-
	(8.4	%)	(8.4	%)	3.3	%	3.3	%			(8.4	%)	(8.4	%)	0.5	%	0.5	%

Other comprehensive income (loss)	4		110		(45	)	(1,366	)	-		4		110		(51	)	(1,568	)	-

Total comprehensive income (loss)	(94	)	(2,890	)	(6	)	(173	)	1,570.5	%	(94	)	(2,890	)	(45	)	(1,371	)	110.8	%

Net income (loss) attributable to:
Stockholders of the parent	(56	)	(1,707	)	58		1,771		-		(56	)	(1,707	)	56		1,720		-
Non-controlling interests	(42	)	(1,293	)	(19	)	(578	)	123.7	%	(42	)	(1,293	)	(50	)	(1,523	)	(15.1	%)

Comprehensive income (loss) attributable to:
Stockholders of the parent	(52	)	(1,608	)	14		416		-		(52	)	(1,608	)	9		279		-
Non-controlling interests	(42	)	(1,282	)	(20	)	(589	)	117.7	%	(42	)	(1,282	)	(54	)	(1,650	)	(22.3	%)

Earnings per share-basic	(0.005	)	(0.14	)	0.005		0.15				(0.005	)	(0.14	)	0.005		0.14
Earnings per ADS (2)	(0.023	)	(0.70	)	0.024		0.75				(0.023	)	(0.70	)	0.023		0.70
Weighted average number of shares
outstanding (in millions)			12,112				12,208						12,112				12,054


Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2018 exchange rate of NT $30.72 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 Twelve-Month Period Ended
	December 31, 2018						December 31, 2018
	US$		NT$		%		US$		NT$		%
Net operating revenues	1,156		35,517		100.0	%	4,924		151,253		100.0	%
Operating costs	(1,006	)	(30,916	)	(87.0	%)	(4,181	)	(128,413	)	(84.9	%)
Gross profit	150		4,601		13.0	%	743		22,840		15.1	%


Operating expenses
- Sales and marketing expenses	(29	)	(903	)	(2.5	%)	(127	)	(3,902	)	(2.6	%)
- General and administrative expenses	(44	)	(1,339	)	(3.8	%)	(157	)	(4,824	)	(3.2	%)
- Research and development expenses	(122	)	(3,745	)	(10.6	%)	(424	)	(13,025	)	(8.6	%)
- Expected credit loss	(13	)	(409	)	(1.2	%)	(13	)	(409	)	(0.3	%)
Subtotal	(208	)	(6,396	)	(18.1	%)	(721	)	(22,160	)	(14.7	%)
Net other operating income and expenses	39		1,206		3.4	%	167		5,117		3.4	%
Operating income (loss)	(19	)	(589	)	(1.7	%)	189		5,797		3.8	%

Net non-operating income and expenses	(65	)	(1,998	)	(5.6	%)	(118	)	(3,613	)	(2.4	%)
Income (loss) from continuing operations before income tax	(84	)	(2,587	)	(7.3	%)	71		2,184		1.4	%


Income tax benefit (expense)	(14	)	(413	)	(1.1	%)	15		459		0.4	%
Net income (loss)	(98	)	(3,000	)	(8.4	%)	86		2,643		1.8	%

Other comprehensive income (loss)	4		110		0.3	%	31		950		0.6	%

Total comprehensive income (loss)	(94	)	(2,890	)	(8.1	%)	117		3,593		2.4	%

Net income (loss) attributable to:
Stockholders of the parent	(56	)	(1,707	)	(4.8	%)	230		7,073		4.7	%
Non-controlling interests	(42	)	(1,293	)	(3.6	%)	(144	)	(4,430	)	(2.9	%)

Comprehensive income (loss) attributable to:
Stockholders of the parent	(52	)	(1,608	)	(4.5	%)	265		8,127		5.4	%
Non-controlling interests	(42	)	(1,282	)	(3.6	%)	(148	)	(4,534	)	(3.0	%)

Earnings per share-basic	(0.005	)	(0.14	)			0.019		0.58
Earnings per ADS ⁽²⁾	(0.023	)	(0.70	)			0.094		2.90

Weighted average number of shares outstanding (in millions)			12,112						12,104

Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2018 exchange rate of NT $30.72 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.


UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Twelve-Month Period Ended December 31, 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	71		2,184
Depreciation & Amortization	1,694		52,049
Net loss of financial assets and liabilities at fair value through profit or loss	38		1,168
Exchange loss on financial assets and liabilities	40		1,218
Changes in notes & accounts receivable	(45	)	(1,383	)
Changes in contract liabilities	(98	)	(3,021	)
Changes in assets, liabilities and others	(42	)	(1,280	)
Net cash provided by operating activities	1,658		50,935

Cash flows from investing activities :
Acquisition of investments accounted for under the equity method	(27	)	(840	)
Acquisition of property, plant and equipment	(638	)	(19,590	)
Increase in refundable deposits	(32	)	(983	)
Acquisition of intangible assets	(27	)	(839	)
Others	219		6,752
Net cash used in investing activities	(505	)	(15,500	)

Cash flows from financing activities :
Decrease in short-term loans	(400	)	(12,288	)
Redemption of bonds	(244	)	(7,500	)
Proceeds from long-term loans	25		759
Repayments of long-term loans	(86	)	(2,639	)
Cash dividends	(279	)	(8,558	)
Treasury stock acquired	(200	)	(6,148	)
Treasury stock sold to employees	72		2,204
Others	22		685
Net cash used in financing activities	(1,090	)	(33,485	)

Effect of exchange rate changes on cash and cash equivalents	1		37
Net increase in cash and cash equivalents	64		1,987

Cash and cash equivalents at beginning of period	2,659		81,675

Cash and cash equivalents at end of period	2,723		83,662


Note: New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2018 exchange rate of NT $30.72 per U.S. Dollar.

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