Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries UMC Reports Third Quarter 2022 Results By: United Microelectronics Corporation via Business Wire October 26, 2022 at 06:28 AM EDT 3Q22 operating income doubles YoY; 22/28 revenue contribution reaches 25% Third Quarter 2022 Overview1: Revenue: NT$75.39 billion (US$2.38 billion) Gross margin: 47.3%; Operating margin: 40.0% Revenue from 22/28nm: 25% Capacity utilization rate: 100%+ Net income attributable to shareholders of the parent: NT$27 billion (US$851 million) Earnings per share: NT$2.19; earnings per ADS: US$0.345 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 2022. Third quarter consolidated revenue was NT$75.39 billion, increasing 4.6% QoQ from NT$72.06 billion in 2Q22. Compared to a year ago, 3Q22 revenue grew 34.9% YoY from NT$55.91 billion in 3Q21. Consolidated gross margin for 3Q22 reached 47.3%. Net income attributable to the shareholders of the parent was NT$27 billion, with earnings per ordinary share of NT$2.19. Jason Wang, co-president of UMC, said, “In the third quarter, our results benefited from product mix optimization and a more favorable exchange rate, while fab capacity remained fully utilized. Despite softening demand in consumer end markets, strengths in certain wireless communications areas drove further expansion in our 22/28nm business, which accounted for 25% of overall third-quarter revenue and lifted wafer average selling price. We believe our industry-leading position in OLED display driver ICs will continue to drive growth for our 22/28nm technologies amid growing adoption of OLED panels in smartphones and other end devices. We also saw sustained momentum in our automotive business during the quarter, and we intend to pursue more collaboration opportunities with existing and potential automotive customers.” Co-president Wang said, “Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust to current market conditions. At the same time, we will continue to deliver differentiated technology processes to enable customers’ product pipelines. We have revised the company’s 2022 capital expenditure down to US$3 billion, but our capacity expansions in Tainan and Singapore are still progressing as planned in order to meet long-term supply commitments. Despite near-term turbulences, the structural story of increasing silicon content driven by the rise of 5G, AIoT, and EV remains intact. With our comprehensive technology offering, focus on manufacturing excellence, and resilient financial structure, UMC will further increase our exposure to strong growth markets and consolidate our specialty technology leadership.” Co-president Wang added, “In terms of corporate sustainability, UMC made steady progress towards our goals across all three areas of ESG. Going into 2023, we will accelerate carbon emissions reduction efforts by proactively seeking ways to lower emissions associated with wafer manufacturing and products footprint, working with partners to address emissions from the value chain, as well as investing in net-zero technologies as we strive for net zero by 2050.” Summary of Operating Results Operating Results (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 Gross Profit 35,664 33,472 6.5 20,544 73.6 Operating Expenses (6,794 ) (6,706 ) 1.3 (6,636 ) 2.4 Net Other Operating Income and Expenses 1,287 1,398 (8.0 ) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net Non-Operating Income and Expenses 2,189 (2,586 ) - 4,317 (49.3 ) Net Income Attributable to Shareholders of the Parent 26,996 21,327 26.6 17,460 54.6 EPS (NT$ per share) 2.19 1.74 1.43 (US$ per ADS) 0.345 0.274 0.225 Third quarter operating revenues increased by 4.6% sequentially to NT$75.39 billion which was partially lifted due to a better product mix as well as favorable foreign exchange rate. Revenue contribution from 40nm and below technologies represented 42% of wafer revenue. Gross profit grew 6.5% QoQ to NT$35.66 billion, or 47.3% of revenue. Operating expenses grew 1.3% to NT$6.79 billion. Net other operating income declined to NT$1.29 billion. Net non-operating income totaled NT$2.19 billion. Net income attributable to shareholders of the parent amounted to NT$27 billion. Earnings per ordinary share for the quarter was NT$2.19. Earnings per ADS was US$0.345. The basic weighted average number of outstanding shares in 3Q22 was 12,305,516,644, compared with 12,283,479,334 shares in 2Q22 and 12,206,292,756 shares in 3Q21. The diluted weighted average number of outstanding shares was 12,635,661,561 in 3Q22, compared with 12,553,373,552 shares in 2Q22 and 12,411,100,649 shares in 3Q21. The fully diluted shares counted on September 30, 2022 were approximately 12,679,025,000. Detailed Financials Section Operating revenues increased to NT$75.39 billion. COGS increased 3.0% to NT$39.73 billion, which included 3.9% sequential increase in other manufacturing costs. Gross profit grew 6.5% QoQ to NT$35.66 billion. Operating expenses increased 1.3% QoQ to NT$6.79 billion, as Sales & Marketing grew 15.9% to NT$1.06 billion while R&D was up 3.0% QoQ to NT$3.30 billion, representing 4.4% of revenue. Net other operating income was NT$1.29 billion. In 3Q22, operating income grew 7.1% QoQ to NT$30.16 billion. COGS & Expenses (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 COGS (39,728) (38,583) 3.0 (35,363) 12.3 Depreciation (9,622) (9,616) 0.1 (9,900) (2.8) Other Mfg. Costs (30,106) (28,967) 3.9 (25,463) 18.2 Gross Profit 35,664 33,472 6.5 20,544 73.6 Gross Margin (%) 47.3% 46.5% 36.8% Operating Expenses (6,794) (6,706) 1.3 (6,636) 2.4 G&A (2,428) (2,579) (5.9) (2,119) 14.6 Sales & Marketing (1,061) (915) 15.9 (1,212) (12.5) R&D (3,304) (3,209) 3.0 (3,303) 0.0 Expected Credit Impairment Loss (1) (3) (75.8) (2) (68.6) Net Other Operating Income & Expenses 1,287 1,398 (8.0) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net non-operating income in 3Q22 was NT$2.19 billion, primarily reflecting NT$1.29 billion in exchange gain and a NT$0.78 billion in net investment gain. Non-Operating Income and Expenses (Amount: NT$ million) 3Q22 2Q22 3Q21 Non-Operating Income and Expenses 2,189 (2,586) 4,317 Net Interest Income and Expenses 139 (163) (367) Net Investment Gain and Loss 780 (3,675) 4,534 Exchange Gain and Loss 1,293 1,361 164 Other Gain and Loss (23) (109) (14) In 3Q22, cash inflow from operating activities was NT$39.70 billion. Cash outflow from investing activities amounted to NT$21.42 billion, which included NT$23.13 billion in capital expenditure, resulting in free cash flow of NT$16.56 billion. Cash outflow from financing reached NT$26.69 billion, primarily from a NT$37.45 billion payment as cash distributed from additional paid- in capital partially offset by a NT$14.44 billion from the increase in deposits-in. Net cash outflow in 3Q22 totaled NT$3.07 billion. Over the next 12 months, the company expects to repay NT$ 4.43 billion in bank loans. Cash Flow Summary (Amount: NT$ million) For the 3-Month Period Ended Sep.30, 2022 For the 3-Month Period Ended Jun. 30, 2022 Cash Flow from Operating Activities 39,696 35,091 Net income before tax 32,346 25,578 Depreciation & Amortization 11,195 11,107 Share of loss (profit) of associates and joint ventures (328 ) 2,027 Income tax paid (652 ) (2,913 ) Changes in working capital & others (2,865 ) (708 ) Cash Flow from Investing Activities (21,419 ) (11,716 ) Decrease in financial assets measured at amortized cost 2,070 103 Acquisition of PP&E (22,466 ) (10,907 ) Acquisition of intangible assets (1,080 ) (815 ) Others 57 (97 ) Cash Flow from Financing Activities (26,688 ) (13,423 ) Bank loans (473 ) (11,615 ) Redemption of bonds (1,031 ) (2,484 ) Increase in deposits-in 14,441 864 Cash distributed from additional paid- in capital (37,446 ) - Others (2,179 ) (188 ) Effect of Exchange Rate 5,337 1,601 Net Cash Flow (3,074 ) 11,553 Beginning balance 183,723 172,170 Ending balance 180,649 183,723 Cash and cash equivalents slightly decreased to NT$180.65 billion. Days of inventory increased by 4 days to 66 days. Current Assets (Amount: NT$ billion) 3Q22 2Q22 3Q21 Cash and Cash Equivalents 180.65 183.72 113.11 Notes & Accounts Receivable 44.84 42.88 32.99 Days Sales Outstanding 53 51 51 Inventories, net 30.10 27.34 23.15 Days of Inventory 66 62 59 Total Current Assets 266.95 265.78 211.60 Current liabilities decreased to NT$108.01 billion, mainly from the reduction of in other as company distributed cash from additional paid-in capital to shareholders during Q3. Long-term credit/bonds increased to NT$46.15 billion. Total liabilities decreased to NT$204.21 billion, leading to a debt to equity ratio of 65%. Liabilities (Amount: NT$ billion) 3Q22 2Q22 3Q21 Total Current Liabilities 108.01 131.81 84.55 Notes & Accounts Payable 10.04 9.95 8.26 Short-Term Credit / Bonds 12.19 13.22 24.26 Payables on Equipment 19.40 11.60 6.72 Other 66.38 97.04 45.31 Long-Term Credit / Bonds 46.15 45.70 51.09 Long-Term Investment Liabilities 4.26 8.50 8.14 Total Liabilities 204.21 216.51 171.19 Debt to Equity 65 % 76 % 66 % Analysis of Revenue2 Revenue from Asia-Pacific declined to 62% while business from North America was 23% of sales. Business from Europe was 9% while contribution from Japan increased to 6%. Revenue Breakdown by Region Region 3Q22 2Q22 1Q22 4Q21 3Q21 North America 23 % 22 % 22 % 21 % 22 % Asia Pacific 62 % 65 % 64 % 66 % 65 % Europe 9 % 8 % 8 % 7 % 7 % Japan 6 % 5 % 6 % 6 % 6 % Revenue contribution from 22/28nm grew to 25% of the wafer revenue, while 40nm contribution was 17% of sales. Revenue Breakdown by Geometry Geometry 3Q22 2Q22 1Q22 4Q21 3Q21 14nm and below 0 % 0 % 0 % 0 % 0 % 14nm<x<=28nm 25 % 22 % 20 % 20 % 19 % 28nm<x<=40nm 17 % 18 % 18 % 18 % 18 % 40nm<x<=65nm 18 % 19 % 19 % 19 % 19 % 65nm<x<=90nm 8 % 7 % 8 % 8 % 8 % 90nm<x<=0.13um 12 % 12 % 12 % 12 % 12 % 0.13um<x<=0.18um 10 % 12 % 13 % 13 % 13 % 0.18um<x<=0.35um 8 % 8 % 7 % 7 % 8 % 0.5um and above 2 % 2 % 3 % 3 % 3 % Revenue from fabless customers accounted for 83% of revenue. Revenue Breakdown by Customer Type Customer Type 3Q22 2Q22 1Q22 4Q21 3Q21 Fabless 83 % 86 % 87 % 86 % 86 % IDM 17 % 14 % 13 % 14 % 14 % Revenue from the communication segment represented 45%, while business from computer applications decreased to 14%. Business from consumer applications was 27% as other segments increased to 14% of revenue. Revenue Breakdown by Application (1) Application 3Q22 2Q22 1Q22 4Q21 3Q21 Computer 14 % 16 % 17 % 17 % 17 % Communication 45 % 45 % 45 % 46 % 46 % Consumer 27 % 27 % 26 % 26 % 27 % Others 14 % 12 % 12 % 11 % 10 % (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, WLAN. Communication consists of handset components, broadband, 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 Blended average selling price (ASP) grew in 3Q22. (To view blended ASP trend, please click here for 3Q22 ASP) Shipment and Utilization Rate3 Wafer shipments decreased 1% QoQ to 2,597K in the third quarter, while quarterly capacity grew to 2,539K. Overall utilization rate in 3Q22 remained above 100%. Wafer Shipments 3Q22 2Q22 1Q22 4Q21 3Q21 Wafer Shipments (8” K equivalents) 2,597 2,622 2,513 2,546 2,503 Quarterly Capacity Utilization Rate 3Q22 2Q22 1Q22 4Q21 3Q21 Utilization Rate 100%+ 100%+ 100%+ 100%+ 100%+ Total Capacity (8” K equivalents) 2,539 2,528 2,420 2,419 2,383 Capacity4 Overall capacity in the third quarter increased to 2,539K 8-inch equivalent wafers. Capacity will grow in the fourth quarter of 2022 to 2,543K 8-inch equivalent wafers, reflecting the capacity expansion taking place at 8N. Annual Capacity in thousands of wafers Quarterly Capacity in thousands of wafers FAB Geometry (um) 2021 2020 2019 2018 FAB 4Q22E 3Q22 2Q22 1Q22 WTK 6" 5 – 0.15 329 371 370 396 WTK 6" 85 85 84 82 8A 8" 3 – 0.11 755 802 825 825 8A 8" 192 192 192 189 8C 8" 0.35 – 0.11 459 452 436 383 8C 8" 115 115 115 113 8D 8" 0.18 – 0.09 380 371 359 347 8D 8" 103 103 103 101 8E 8" 0.6 – 0.14 457 449 426 418 8E 8" 118 118 118 116 8F 8" 0.18 – 0.11 514 485 434 431 8F 8" 138 138 138 136 8S 8" 0.18 – 0.11 408 373 372 372 8S 8" 111 111 111 109 8N 8" 0.5 – 0.11 917 917 831 771 8N 8" 245 242 235 231 12A 12" 0.13 – 0.014 1,070 1,044 997 997 12A 12" 301 301 301 267 12i 12" 0.13 – 0.040 641 628 595 555 12i 12" 164 164 164 162 12X 12" 0.080 – 0.022 284 217 203 183 12X 12" 80 80 78 77 12M 12" 0.13 – 0.040 395 391 98 - 12M 12" 110 110 110 108 Total(1) 9,453 9,188 8,148 7,673 Total 2,543 2,539 2,528 2,420 YoY Growth Rate 3% 13% 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. Total capacity figures are expressed in 8-inch equivalent wafers. CAPEX CAPEX spending in 3Q22 totaled US$764 million. 2022 cash-based CAPEX budget will be US$3.0 billion. Capital Expenditure by Year - in US$ billion Year 2021 2020 2019 2018 2017 CAPEX $ 1.8 $ 1.0 $ 0.6 $ 0.7 $ 1.4 2022 CAPEX Plan 8" 12" Total 10% 90% US$3.0 billion Fourth Quarter 2022 Outlook & Guidance Quarter-over-Quarter Guidance: Wafer Shipments: To decrease by approximately 10% ASP in USD: To remain flat Gross Profit Margin: Will be in the low-40% range Capacity Utilization: 90% 2022 CAPEX: US$3.0 billion Recent Developments / Announcements Aug. 24, 2022 UMC and Cadence Collaborate on Analog/Mixed-Signal Flow for 22ULP/ULL Process Technologies Sep. 13, 2022 Avalanche Technology and UMC Announce 22nm Production of High-Density MRAM-Based Devices for Aerospace Applications Please visit UMC’s website for further details regarding the above announcements Conference Call / Webcast Announcement Wednesday, October 26, 2022 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 3Q22 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. The company provides high quality IC production with a focus on both logic and specialty technologies to serve every major sector of the electronics industry. UMC’s comprehensive technology and manufacturing solutions include logic/RF, embedded high voltage, embedded flash, RFSOI/BCD and IATF-16949 automotive manufacturing certification for all its manufacturing facilities. UMC operates 12 fabs that are strategically located throughout Asia with a maximum capacity of approximately 850,000 8-inch equivalent wafers per month. The company employs approximately 20,000 people worldwide, with offices in Taiwan, China, United States, Europe, Japan, Korea and Singapore. For more information, please visit: http://www.umc.com. Safe Harbor Statements This press release contains 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. These forward-looking statements include, but are not limited to, statements regarding anticipated financial results for the third quarter of 2022; the expected wafer shipment and ASP; the anticipated annual budget; capex strategies; environmental protection goals and water management strategies; impact of foreign currency exchange rates; expected foundry capacities; the ability to obtain new business opportunities; and information under the heading “Third Quarter of 2022 Outlook and Guidance.” 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 risk factors is included in UMC’s filings with the United States Securities and Exchange Commission, including its Annual Report on Form 20-F. 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. - FINANCIAL TABLES TO FOLLOW - UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheet As of September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) September 30, 2022 US$ NT$ % Assets Current assets Cash and cash equivalents 5,692 180,649 34.8 % Accounts receivable, net 1,413 44,842 8.6 % Inventories, net 948 30,102 5.8 % Other current assets 357 11,352 2.2 % Total current assets 8,410 266,945 51.4 % Non-current assets Funds and investments 1,951 61,938 11.9 % Property, plant and equipment 4,698 149,119 28.7 % Right-of-use assets 249 7,903 1.5 % Other non-current assets 1,056 33,489 6.5 % Total non-current assets 7,954 252,449 48.6 % Total assets 16,364 519,394 100.0 % Liabilities Current liabilities Short-term loans 7 217 0.0 % Payables 2,155 68,415 13.2 % Current portion of long-term liabilities 377 11,975 2.3 % Other current liabilities 864 27,402 5.3 % Total current liabilities 3,403 108,009 20.8 % Non-current liabilities Bonds payable 727 23,082 4.4 % Long-term loans 727 23,063 4.4 % Lease liabilities, noncurrent 166 5,284 1.0 % Other non-current liabilities 1,411 44,767 8.7 % Total non-current liabilities 3,031 96,196 18.5 % Total liabilities 6,434 204,205 39.3 % Equity Equity attributable to the parent company Capital 3,933 124,821 24.0 % Additional paid-in capital 336 10,668 2.1 % Retained earnings and other components of equity 5,649 179,321 34.5 % Total equity attributable to the parent company 9,918 314,810 60.6 % Non-controlling interests 12 379 0.1 % Total equity 9,930 315,189 60.7 % Total liabilities and equity 16,364 519,394 100.0 % Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data Year over Year Comparison Quarter over Quarter Comparison Three-Month Period Ended Three-Month Period Ended September 30, 2022 September 30, 2021 Chg. September 30, 2022 June 30, 2022 Chg. US$ NT$ US$ NT$ % US$ NT$ US$ NT$ % Operating revenues 2,375 75,392 1,761 55,907 34.9 % 2,375 75,392 2,270 72,055 4.6 % Operating costs (1,251 ) (39,728 ) (1,114 ) (35,363 ) 12.3 % (1,251 ) (39,728 ) (1,215 ) (38,583 ) 3.0 % Gross profit 1,124 35,664 647 20,544 73.6 % 1,124 35,664 1,055 33,472 6.5 % 47.3 % 47.3 % 36.8 % 36.8 % 47.3 % 47.3 % 46.5 % 46.5 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (38 ) (1,212 ) (12.5 %) (33 ) (1,061 ) (29 ) (915 ) 15.9 % - General and administrative expenses (77 ) (2,428 ) (67 ) (2,119 ) 14.6 % (77 ) (2,428 ) (82 ) (2,579 ) (5.9 %) - Research and development expenses (104 ) (3,304 ) (104 ) (3,303 ) 0.0 % (104 ) (3,304 ) (101 ) (3,209 ) 3.0 % - Expected credit impairment loss (0 ) (1 ) (0 ) (2 ) (68.6 %) (0 ) (1 ) (0 ) (3 ) (75.8 %) Subtotal (214 ) (6,794 ) (209 ) (6,636 ) 2.4 % (214 ) (6,794 ) (212 ) (6,706 ) 1.3 % Net other operating income and expenses 40 1,287 39 1,227 4.9 % 40 1,287 44 1,398 (8.0 %) Operating income 950 30,157 477 15,135 99.3 % 950 30,157 887 28,164 7.1 % 40.0 % 40.0 % 27.1 % 27.1 % 40.0 % 40.0 % 39.1 % 39.1 % Net non-operating income and expenses 69 2,189 136 4,317 (49.3 %) 69 2,189 (81 ) (2,586 ) - Income from continuing operations before income tax 1,019 32,346 613 19,452 66.3 % 1,019 32,346 806 25,578 26.5 % 42.9 % 42.9 % 34.8 % 34.8 % 42.9 % 42.9 % 35.5 % 35.5 % Income tax expense (158 ) (5,004 ) (66 ) (2,100 ) 138.3 % (158 ) (5,004 ) (129 ) (4,088 ) 22.4 % Net income 861 27,342 547 17,352 57.6 % 861 27,342 677 21,490 27.2 % 36.3 % 36.3 % 31.0 % 31.0 % 36.3 % 36.3 % 29.8 % 29.8 % Other comprehensive income (loss) 137 4,336 (12 ) (370 ) - 137 4,336 (118 ) (3,749 ) - Total comprehensive income (loss) 998 31,678 535 16,982 86.5 % 998 31,678 559 17,741 78.6 % Net income attributable to: Shareholders of the parent 851 26,996 550 17,460 54.6 % 851 26,996 672 21,327 26.6 % Non-controlling interests 10 346 (3 ) (108 ) - 10 346 5 163 111.6 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 538 17,090 83.3 % 987 31,332 554 17,578 78.2 % Non-controlling interests 11 346 (3 ) (108 ) - 11 346 5 163 111.6 % Earnings per share-basic 0.069 2.19 0.045 1.43 0.069 2.19 0.055 1.74 Earnings per ADS (2) 0.345 10.95 0.225 7.15 0.345 10.95 0.274 8.70 Weighted average number of shares outstanding (in millions) 12,306 12,206 12,306 12,283 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data For the Three-Month Period Ended For the Nine-Month Period Ended September 30, 2022 September 30, 2022 US$ NT$ % US$ NT$ % Operating revenues 2,375 75,392 100.0 % 6,644 210,870 100.0 % Operating costs (1,251 ) (39,728 ) (52.7 %) (3,599 ) (114,230 ) (54.2 %) Gross profit 1,124 35,664 47.3 % 3,045 96,640 45.8 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (1.4 %) (102 ) (3,230 ) (1.5 %) - General and administrative expenses (77 ) (2,428 ) (3.2 %) (228 ) (7,235 ) (3.4 %) - Research and development expenses (104 ) (3,304 ) (4.4 %) (301 ) (9,547 ) (4.5 %) - Expected credit impairment loss (0 ) (1 ) (0.0 %) (0 ) (2 ) (0.0 %) Subtotal (214 ) (6,794 ) (9.0 %) (631 ) (20,014 ) (9.4 %) Net other operating income and expenses 40 1,287 1.7 % 127 4,029 1.9 % Operating income 950 30,157 40.0 % 2,541 80,655 38.3 % Net non-operating income and expenses 69 2,189 2.9 % 29 916 0.4 % Income from continuing operations before income tax 1,019 32,346 42.9 % 2,570 81,571 38.7 % Income tax expense (158 ) (5,004 ) (6.6 %) (399 ) (12,673 ) (6.0 %) Net income 861 27,342 36.3 % 2,171 68,898 32.7 % Other comprehensive income (loss) 137 4,336 5.7 % 63 2,009 0.9 % Total comprehensive income (loss) 998 31,678 42.0 % 2,234 70,907 33.6 % Net income attributable to: Shareholders of the parent 851 26,996 35.8 % 2,147 68,131 32.3 % Non-controlling interests 10 346 0.5 % 24 767 0.4 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 41.6 % 2,210 70,139 33.3 % Non-controlling interests 11 346 0.4 % 24 768 0.3 % Earnings per share-basic 0.069 2.19 0.175 5.54 Earnings per ADS (2) 0.345 10.95 0.873 27.70 Weighted average number of shares outstanding (in millions) 12,306 12,291 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statement of Cash Flows For The Nine-Month Period Ended September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) US$ NT$ Cash flows from operating activities : Net income before tax 2,570 81,571 Depreciation & Amortization 1,061 33,692 Share of loss of associates and joint ventures 112 3,557 Income tax paid (137 ) (4,333 ) Changes in working capital & others (301 ) (9,582 ) Net cash provided by operating activities 3,305 104,905 Cash flows from investing activities : Decrease in financial assets measured at amortized cost 898 28,488 Acquisition of property, plant and equipment (1,392 ) (44,176 ) Acquisition of intangible assets (73 ) (2,316 ) Others (12 ) (379 ) Net cash used in investing activities (579 ) (18,383 ) Cash flows from financing activities : Decrease in short-term loans (55 ) (1,759 ) Redemption of bonds (339 ) (10,763 ) Proceeds from long-term loans 22 710 Repayments of long-term loans (367 ) (11,650 ) Increase in guarantee deposits 484 15,374 Cash distributed from additional paid-in capital (1,180 ) (37,446 ) Others (79 ) (2,535 ) Net cash used in financing activities (1,514 ) (48,069 ) Effect of exchange rate changes on cash and cash equivalents 302 9,574 Net increase in cash and cash equivalents 1,514 48,027 Cash and cash equivalents at beginning of period 4,178 132,622 Cash and cash equivalents at end of period 5,692 180,649 Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. 1Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending September 30, 2022, the three-month period ending June 30, 2022, and the equivalent three-month period that ended September 30, 2021. For all 3Q22 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2022 exchange rate of NT$ 31.74 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005486/en/Contacts Michael Lin / David Wong UMC, Investor Relations + 886-2-2658-9168, ext. 16900 jinhong_lin@umc.com david_wong@umc.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
UMC Reports Third Quarter 2022 Results By: United Microelectronics Corporation via Business Wire October 26, 2022 at 06:28 AM EDT 3Q22 operating income doubles YoY; 22/28 revenue contribution reaches 25% Third Quarter 2022 Overview1: Revenue: NT$75.39 billion (US$2.38 billion) Gross margin: 47.3%; Operating margin: 40.0% Revenue from 22/28nm: 25% Capacity utilization rate: 100%+ Net income attributable to shareholders of the parent: NT$27 billion (US$851 million) Earnings per share: NT$2.19; earnings per ADS: US$0.345 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 2022. Third quarter consolidated revenue was NT$75.39 billion, increasing 4.6% QoQ from NT$72.06 billion in 2Q22. Compared to a year ago, 3Q22 revenue grew 34.9% YoY from NT$55.91 billion in 3Q21. Consolidated gross margin for 3Q22 reached 47.3%. Net income attributable to the shareholders of the parent was NT$27 billion, with earnings per ordinary share of NT$2.19. Jason Wang, co-president of UMC, said, “In the third quarter, our results benefited from product mix optimization and a more favorable exchange rate, while fab capacity remained fully utilized. Despite softening demand in consumer end markets, strengths in certain wireless communications areas drove further expansion in our 22/28nm business, which accounted for 25% of overall third-quarter revenue and lifted wafer average selling price. We believe our industry-leading position in OLED display driver ICs will continue to drive growth for our 22/28nm technologies amid growing adoption of OLED panels in smartphones and other end devices. We also saw sustained momentum in our automotive business during the quarter, and we intend to pursue more collaboration opportunities with existing and potential automotive customers.” Co-president Wang said, “Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust to current market conditions. At the same time, we will continue to deliver differentiated technology processes to enable customers’ product pipelines. We have revised the company’s 2022 capital expenditure down to US$3 billion, but our capacity expansions in Tainan and Singapore are still progressing as planned in order to meet long-term supply commitments. Despite near-term turbulences, the structural story of increasing silicon content driven by the rise of 5G, AIoT, and EV remains intact. With our comprehensive technology offering, focus on manufacturing excellence, and resilient financial structure, UMC will further increase our exposure to strong growth markets and consolidate our specialty technology leadership.” Co-president Wang added, “In terms of corporate sustainability, UMC made steady progress towards our goals across all three areas of ESG. Going into 2023, we will accelerate carbon emissions reduction efforts by proactively seeking ways to lower emissions associated with wafer manufacturing and products footprint, working with partners to address emissions from the value chain, as well as investing in net-zero technologies as we strive for net zero by 2050.” Summary of Operating Results Operating Results (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 Gross Profit 35,664 33,472 6.5 20,544 73.6 Operating Expenses (6,794 ) (6,706 ) 1.3 (6,636 ) 2.4 Net Other Operating Income and Expenses 1,287 1,398 (8.0 ) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net Non-Operating Income and Expenses 2,189 (2,586 ) - 4,317 (49.3 ) Net Income Attributable to Shareholders of the Parent 26,996 21,327 26.6 17,460 54.6 EPS (NT$ per share) 2.19 1.74 1.43 (US$ per ADS) 0.345 0.274 0.225 Third quarter operating revenues increased by 4.6% sequentially to NT$75.39 billion which was partially lifted due to a better product mix as well as favorable foreign exchange rate. Revenue contribution from 40nm and below technologies represented 42% of wafer revenue. Gross profit grew 6.5% QoQ to NT$35.66 billion, or 47.3% of revenue. Operating expenses grew 1.3% to NT$6.79 billion. Net other operating income declined to NT$1.29 billion. Net non-operating income totaled NT$2.19 billion. Net income attributable to shareholders of the parent amounted to NT$27 billion. Earnings per ordinary share for the quarter was NT$2.19. Earnings per ADS was US$0.345. The basic weighted average number of outstanding shares in 3Q22 was 12,305,516,644, compared with 12,283,479,334 shares in 2Q22 and 12,206,292,756 shares in 3Q21. The diluted weighted average number of outstanding shares was 12,635,661,561 in 3Q22, compared with 12,553,373,552 shares in 2Q22 and 12,411,100,649 shares in 3Q21. The fully diluted shares counted on September 30, 2022 were approximately 12,679,025,000. Detailed Financials Section Operating revenues increased to NT$75.39 billion. COGS increased 3.0% to NT$39.73 billion, which included 3.9% sequential increase in other manufacturing costs. Gross profit grew 6.5% QoQ to NT$35.66 billion. Operating expenses increased 1.3% QoQ to NT$6.79 billion, as Sales & Marketing grew 15.9% to NT$1.06 billion while R&D was up 3.0% QoQ to NT$3.30 billion, representing 4.4% of revenue. Net other operating income was NT$1.29 billion. In 3Q22, operating income grew 7.1% QoQ to NT$30.16 billion. COGS & Expenses (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 COGS (39,728) (38,583) 3.0 (35,363) 12.3 Depreciation (9,622) (9,616) 0.1 (9,900) (2.8) Other Mfg. Costs (30,106) (28,967) 3.9 (25,463) 18.2 Gross Profit 35,664 33,472 6.5 20,544 73.6 Gross Margin (%) 47.3% 46.5% 36.8% Operating Expenses (6,794) (6,706) 1.3 (6,636) 2.4 G&A (2,428) (2,579) (5.9) (2,119) 14.6 Sales & Marketing (1,061) (915) 15.9 (1,212) (12.5) R&D (3,304) (3,209) 3.0 (3,303) 0.0 Expected Credit Impairment Loss (1) (3) (75.8) (2) (68.6) Net Other Operating Income & Expenses 1,287 1,398 (8.0) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net non-operating income in 3Q22 was NT$2.19 billion, primarily reflecting NT$1.29 billion in exchange gain and a NT$0.78 billion in net investment gain. Non-Operating Income and Expenses (Amount: NT$ million) 3Q22 2Q22 3Q21 Non-Operating Income and Expenses 2,189 (2,586) 4,317 Net Interest Income and Expenses 139 (163) (367) Net Investment Gain and Loss 780 (3,675) 4,534 Exchange Gain and Loss 1,293 1,361 164 Other Gain and Loss (23) (109) (14) In 3Q22, cash inflow from operating activities was NT$39.70 billion. Cash outflow from investing activities amounted to NT$21.42 billion, which included NT$23.13 billion in capital expenditure, resulting in free cash flow of NT$16.56 billion. Cash outflow from financing reached NT$26.69 billion, primarily from a NT$37.45 billion payment as cash distributed from additional paid- in capital partially offset by a NT$14.44 billion from the increase in deposits-in. Net cash outflow in 3Q22 totaled NT$3.07 billion. Over the next 12 months, the company expects to repay NT$ 4.43 billion in bank loans. Cash Flow Summary (Amount: NT$ million) For the 3-Month Period Ended Sep.30, 2022 For the 3-Month Period Ended Jun. 30, 2022 Cash Flow from Operating Activities 39,696 35,091 Net income before tax 32,346 25,578 Depreciation & Amortization 11,195 11,107 Share of loss (profit) of associates and joint ventures (328 ) 2,027 Income tax paid (652 ) (2,913 ) Changes in working capital & others (2,865 ) (708 ) Cash Flow from Investing Activities (21,419 ) (11,716 ) Decrease in financial assets measured at amortized cost 2,070 103 Acquisition of PP&E (22,466 ) (10,907 ) Acquisition of intangible assets (1,080 ) (815 ) Others 57 (97 ) Cash Flow from Financing Activities (26,688 ) (13,423 ) Bank loans (473 ) (11,615 ) Redemption of bonds (1,031 ) (2,484 ) Increase in deposits-in 14,441 864 Cash distributed from additional paid- in capital (37,446 ) - Others (2,179 ) (188 ) Effect of Exchange Rate 5,337 1,601 Net Cash Flow (3,074 ) 11,553 Beginning balance 183,723 172,170 Ending balance 180,649 183,723 Cash and cash equivalents slightly decreased to NT$180.65 billion. Days of inventory increased by 4 days to 66 days. Current Assets (Amount: NT$ billion) 3Q22 2Q22 3Q21 Cash and Cash Equivalents 180.65 183.72 113.11 Notes & Accounts Receivable 44.84 42.88 32.99 Days Sales Outstanding 53 51 51 Inventories, net 30.10 27.34 23.15 Days of Inventory 66 62 59 Total Current Assets 266.95 265.78 211.60 Current liabilities decreased to NT$108.01 billion, mainly from the reduction of in other as company distributed cash from additional paid-in capital to shareholders during Q3. Long-term credit/bonds increased to NT$46.15 billion. Total liabilities decreased to NT$204.21 billion, leading to a debt to equity ratio of 65%. Liabilities (Amount: NT$ billion) 3Q22 2Q22 3Q21 Total Current Liabilities 108.01 131.81 84.55 Notes & Accounts Payable 10.04 9.95 8.26 Short-Term Credit / Bonds 12.19 13.22 24.26 Payables on Equipment 19.40 11.60 6.72 Other 66.38 97.04 45.31 Long-Term Credit / Bonds 46.15 45.70 51.09 Long-Term Investment Liabilities 4.26 8.50 8.14 Total Liabilities 204.21 216.51 171.19 Debt to Equity 65 % 76 % 66 % Analysis of Revenue2 Revenue from Asia-Pacific declined to 62% while business from North America was 23% of sales. Business from Europe was 9% while contribution from Japan increased to 6%. Revenue Breakdown by Region Region 3Q22 2Q22 1Q22 4Q21 3Q21 North America 23 % 22 % 22 % 21 % 22 % Asia Pacific 62 % 65 % 64 % 66 % 65 % Europe 9 % 8 % 8 % 7 % 7 % Japan 6 % 5 % 6 % 6 % 6 % Revenue contribution from 22/28nm grew to 25% of the wafer revenue, while 40nm contribution was 17% of sales. Revenue Breakdown by Geometry Geometry 3Q22 2Q22 1Q22 4Q21 3Q21 14nm and below 0 % 0 % 0 % 0 % 0 % 14nm<x<=28nm 25 % 22 % 20 % 20 % 19 % 28nm<x<=40nm 17 % 18 % 18 % 18 % 18 % 40nm<x<=65nm 18 % 19 % 19 % 19 % 19 % 65nm<x<=90nm 8 % 7 % 8 % 8 % 8 % 90nm<x<=0.13um 12 % 12 % 12 % 12 % 12 % 0.13um<x<=0.18um 10 % 12 % 13 % 13 % 13 % 0.18um<x<=0.35um 8 % 8 % 7 % 7 % 8 % 0.5um and above 2 % 2 % 3 % 3 % 3 % Revenue from fabless customers accounted for 83% of revenue. Revenue Breakdown by Customer Type Customer Type 3Q22 2Q22 1Q22 4Q21 3Q21 Fabless 83 % 86 % 87 % 86 % 86 % IDM 17 % 14 % 13 % 14 % 14 % Revenue from the communication segment represented 45%, while business from computer applications decreased to 14%. Business from consumer applications was 27% as other segments increased to 14% of revenue. Revenue Breakdown by Application (1) Application 3Q22 2Q22 1Q22 4Q21 3Q21 Computer 14 % 16 % 17 % 17 % 17 % Communication 45 % 45 % 45 % 46 % 46 % Consumer 27 % 27 % 26 % 26 % 27 % Others 14 % 12 % 12 % 11 % 10 % (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, WLAN. Communication consists of handset components, broadband, 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 Blended average selling price (ASP) grew in 3Q22. (To view blended ASP trend, please click here for 3Q22 ASP) Shipment and Utilization Rate3 Wafer shipments decreased 1% QoQ to 2,597K in the third quarter, while quarterly capacity grew to 2,539K. Overall utilization rate in 3Q22 remained above 100%. Wafer Shipments 3Q22 2Q22 1Q22 4Q21 3Q21 Wafer Shipments (8” K equivalents) 2,597 2,622 2,513 2,546 2,503 Quarterly Capacity Utilization Rate 3Q22 2Q22 1Q22 4Q21 3Q21 Utilization Rate 100%+ 100%+ 100%+ 100%+ 100%+ Total Capacity (8” K equivalents) 2,539 2,528 2,420 2,419 2,383 Capacity4 Overall capacity in the third quarter increased to 2,539K 8-inch equivalent wafers. Capacity will grow in the fourth quarter of 2022 to 2,543K 8-inch equivalent wafers, reflecting the capacity expansion taking place at 8N. Annual Capacity in thousands of wafers Quarterly Capacity in thousands of wafers FAB Geometry (um) 2021 2020 2019 2018 FAB 4Q22E 3Q22 2Q22 1Q22 WTK 6" 5 – 0.15 329 371 370 396 WTK 6" 85 85 84 82 8A 8" 3 – 0.11 755 802 825 825 8A 8" 192 192 192 189 8C 8" 0.35 – 0.11 459 452 436 383 8C 8" 115 115 115 113 8D 8" 0.18 – 0.09 380 371 359 347 8D 8" 103 103 103 101 8E 8" 0.6 – 0.14 457 449 426 418 8E 8" 118 118 118 116 8F 8" 0.18 – 0.11 514 485 434 431 8F 8" 138 138 138 136 8S 8" 0.18 – 0.11 408 373 372 372 8S 8" 111 111 111 109 8N 8" 0.5 – 0.11 917 917 831 771 8N 8" 245 242 235 231 12A 12" 0.13 – 0.014 1,070 1,044 997 997 12A 12" 301 301 301 267 12i 12" 0.13 – 0.040 641 628 595 555 12i 12" 164 164 164 162 12X 12" 0.080 – 0.022 284 217 203 183 12X 12" 80 80 78 77 12M 12" 0.13 – 0.040 395 391 98 - 12M 12" 110 110 110 108 Total(1) 9,453 9,188 8,148 7,673 Total 2,543 2,539 2,528 2,420 YoY Growth Rate 3% 13% 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. Total capacity figures are expressed in 8-inch equivalent wafers. CAPEX CAPEX spending in 3Q22 totaled US$764 million. 2022 cash-based CAPEX budget will be US$3.0 billion. Capital Expenditure by Year - in US$ billion Year 2021 2020 2019 2018 2017 CAPEX $ 1.8 $ 1.0 $ 0.6 $ 0.7 $ 1.4 2022 CAPEX Plan 8" 12" Total 10% 90% US$3.0 billion Fourth Quarter 2022 Outlook & Guidance Quarter-over-Quarter Guidance: Wafer Shipments: To decrease by approximately 10% ASP in USD: To remain flat Gross Profit Margin: Will be in the low-40% range Capacity Utilization: 90% 2022 CAPEX: US$3.0 billion Recent Developments / Announcements Aug. 24, 2022 UMC and Cadence Collaborate on Analog/Mixed-Signal Flow for 22ULP/ULL Process Technologies Sep. 13, 2022 Avalanche Technology and UMC Announce 22nm Production of High-Density MRAM-Based Devices for Aerospace Applications Please visit UMC’s website for further details regarding the above announcements Conference Call / Webcast Announcement Wednesday, October 26, 2022 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 3Q22 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. The company provides high quality IC production with a focus on both logic and specialty technologies to serve every major sector of the electronics industry. UMC’s comprehensive technology and manufacturing solutions include logic/RF, embedded high voltage, embedded flash, RFSOI/BCD and IATF-16949 automotive manufacturing certification for all its manufacturing facilities. UMC operates 12 fabs that are strategically located throughout Asia with a maximum capacity of approximately 850,000 8-inch equivalent wafers per month. The company employs approximately 20,000 people worldwide, with offices in Taiwan, China, United States, Europe, Japan, Korea and Singapore. For more information, please visit: http://www.umc.com. Safe Harbor Statements This press release contains 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. These forward-looking statements include, but are not limited to, statements regarding anticipated financial results for the third quarter of 2022; the expected wafer shipment and ASP; the anticipated annual budget; capex strategies; environmental protection goals and water management strategies; impact of foreign currency exchange rates; expected foundry capacities; the ability to obtain new business opportunities; and information under the heading “Third Quarter of 2022 Outlook and Guidance.” 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 risk factors is included in UMC’s filings with the United States Securities and Exchange Commission, including its Annual Report on Form 20-F. 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. - FINANCIAL TABLES TO FOLLOW - UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheet As of September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) September 30, 2022 US$ NT$ % Assets Current assets Cash and cash equivalents 5,692 180,649 34.8 % Accounts receivable, net 1,413 44,842 8.6 % Inventories, net 948 30,102 5.8 % Other current assets 357 11,352 2.2 % Total current assets 8,410 266,945 51.4 % Non-current assets Funds and investments 1,951 61,938 11.9 % Property, plant and equipment 4,698 149,119 28.7 % Right-of-use assets 249 7,903 1.5 % Other non-current assets 1,056 33,489 6.5 % Total non-current assets 7,954 252,449 48.6 % Total assets 16,364 519,394 100.0 % Liabilities Current liabilities Short-term loans 7 217 0.0 % Payables 2,155 68,415 13.2 % Current portion of long-term liabilities 377 11,975 2.3 % Other current liabilities 864 27,402 5.3 % Total current liabilities 3,403 108,009 20.8 % Non-current liabilities Bonds payable 727 23,082 4.4 % Long-term loans 727 23,063 4.4 % Lease liabilities, noncurrent 166 5,284 1.0 % Other non-current liabilities 1,411 44,767 8.7 % Total non-current liabilities 3,031 96,196 18.5 % Total liabilities 6,434 204,205 39.3 % Equity Equity attributable to the parent company Capital 3,933 124,821 24.0 % Additional paid-in capital 336 10,668 2.1 % Retained earnings and other components of equity 5,649 179,321 34.5 % Total equity attributable to the parent company 9,918 314,810 60.6 % Non-controlling interests 12 379 0.1 % Total equity 9,930 315,189 60.7 % Total liabilities and equity 16,364 519,394 100.0 % Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data Year over Year Comparison Quarter over Quarter Comparison Three-Month Period Ended Three-Month Period Ended September 30, 2022 September 30, 2021 Chg. September 30, 2022 June 30, 2022 Chg. US$ NT$ US$ NT$ % US$ NT$ US$ NT$ % Operating revenues 2,375 75,392 1,761 55,907 34.9 % 2,375 75,392 2,270 72,055 4.6 % Operating costs (1,251 ) (39,728 ) (1,114 ) (35,363 ) 12.3 % (1,251 ) (39,728 ) (1,215 ) (38,583 ) 3.0 % Gross profit 1,124 35,664 647 20,544 73.6 % 1,124 35,664 1,055 33,472 6.5 % 47.3 % 47.3 % 36.8 % 36.8 % 47.3 % 47.3 % 46.5 % 46.5 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (38 ) (1,212 ) (12.5 %) (33 ) (1,061 ) (29 ) (915 ) 15.9 % - General and administrative expenses (77 ) (2,428 ) (67 ) (2,119 ) 14.6 % (77 ) (2,428 ) (82 ) (2,579 ) (5.9 %) - Research and development expenses (104 ) (3,304 ) (104 ) (3,303 ) 0.0 % (104 ) (3,304 ) (101 ) (3,209 ) 3.0 % - Expected credit impairment loss (0 ) (1 ) (0 ) (2 ) (68.6 %) (0 ) (1 ) (0 ) (3 ) (75.8 %) Subtotal (214 ) (6,794 ) (209 ) (6,636 ) 2.4 % (214 ) (6,794 ) (212 ) (6,706 ) 1.3 % Net other operating income and expenses 40 1,287 39 1,227 4.9 % 40 1,287 44 1,398 (8.0 %) Operating income 950 30,157 477 15,135 99.3 % 950 30,157 887 28,164 7.1 % 40.0 % 40.0 % 27.1 % 27.1 % 40.0 % 40.0 % 39.1 % 39.1 % Net non-operating income and expenses 69 2,189 136 4,317 (49.3 %) 69 2,189 (81 ) (2,586 ) - Income from continuing operations before income tax 1,019 32,346 613 19,452 66.3 % 1,019 32,346 806 25,578 26.5 % 42.9 % 42.9 % 34.8 % 34.8 % 42.9 % 42.9 % 35.5 % 35.5 % Income tax expense (158 ) (5,004 ) (66 ) (2,100 ) 138.3 % (158 ) (5,004 ) (129 ) (4,088 ) 22.4 % Net income 861 27,342 547 17,352 57.6 % 861 27,342 677 21,490 27.2 % 36.3 % 36.3 % 31.0 % 31.0 % 36.3 % 36.3 % 29.8 % 29.8 % Other comprehensive income (loss) 137 4,336 (12 ) (370 ) - 137 4,336 (118 ) (3,749 ) - Total comprehensive income (loss) 998 31,678 535 16,982 86.5 % 998 31,678 559 17,741 78.6 % Net income attributable to: Shareholders of the parent 851 26,996 550 17,460 54.6 % 851 26,996 672 21,327 26.6 % Non-controlling interests 10 346 (3 ) (108 ) - 10 346 5 163 111.6 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 538 17,090 83.3 % 987 31,332 554 17,578 78.2 % Non-controlling interests 11 346 (3 ) (108 ) - 11 346 5 163 111.6 % Earnings per share-basic 0.069 2.19 0.045 1.43 0.069 2.19 0.055 1.74 Earnings per ADS (2) 0.345 10.95 0.225 7.15 0.345 10.95 0.274 8.70 Weighted average number of shares outstanding (in millions) 12,306 12,206 12,306 12,283 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data For the Three-Month Period Ended For the Nine-Month Period Ended September 30, 2022 September 30, 2022 US$ NT$ % US$ NT$ % Operating revenues 2,375 75,392 100.0 % 6,644 210,870 100.0 % Operating costs (1,251 ) (39,728 ) (52.7 %) (3,599 ) (114,230 ) (54.2 %) Gross profit 1,124 35,664 47.3 % 3,045 96,640 45.8 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (1.4 %) (102 ) (3,230 ) (1.5 %) - General and administrative expenses (77 ) (2,428 ) (3.2 %) (228 ) (7,235 ) (3.4 %) - Research and development expenses (104 ) (3,304 ) (4.4 %) (301 ) (9,547 ) (4.5 %) - Expected credit impairment loss (0 ) (1 ) (0.0 %) (0 ) (2 ) (0.0 %) Subtotal (214 ) (6,794 ) (9.0 %) (631 ) (20,014 ) (9.4 %) Net other operating income and expenses 40 1,287 1.7 % 127 4,029 1.9 % Operating income 950 30,157 40.0 % 2,541 80,655 38.3 % Net non-operating income and expenses 69 2,189 2.9 % 29 916 0.4 % Income from continuing operations before income tax 1,019 32,346 42.9 % 2,570 81,571 38.7 % Income tax expense (158 ) (5,004 ) (6.6 %) (399 ) (12,673 ) (6.0 %) Net income 861 27,342 36.3 % 2,171 68,898 32.7 % Other comprehensive income (loss) 137 4,336 5.7 % 63 2,009 0.9 % Total comprehensive income (loss) 998 31,678 42.0 % 2,234 70,907 33.6 % Net income attributable to: Shareholders of the parent 851 26,996 35.8 % 2,147 68,131 32.3 % Non-controlling interests 10 346 0.5 % 24 767 0.4 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 41.6 % 2,210 70,139 33.3 % Non-controlling interests 11 346 0.4 % 24 768 0.3 % Earnings per share-basic 0.069 2.19 0.175 5.54 Earnings per ADS (2) 0.345 10.95 0.873 27.70 Weighted average number of shares outstanding (in millions) 12,306 12,291 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statement of Cash Flows For The Nine-Month Period Ended September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) US$ NT$ Cash flows from operating activities : Net income before tax 2,570 81,571 Depreciation & Amortization 1,061 33,692 Share of loss of associates and joint ventures 112 3,557 Income tax paid (137 ) (4,333 ) Changes in working capital & others (301 ) (9,582 ) Net cash provided by operating activities 3,305 104,905 Cash flows from investing activities : Decrease in financial assets measured at amortized cost 898 28,488 Acquisition of property, plant and equipment (1,392 ) (44,176 ) Acquisition of intangible assets (73 ) (2,316 ) Others (12 ) (379 ) Net cash used in investing activities (579 ) (18,383 ) Cash flows from financing activities : Decrease in short-term loans (55 ) (1,759 ) Redemption of bonds (339 ) (10,763 ) Proceeds from long-term loans 22 710 Repayments of long-term loans (367 ) (11,650 ) Increase in guarantee deposits 484 15,374 Cash distributed from additional paid-in capital (1,180 ) (37,446 ) Others (79 ) (2,535 ) Net cash used in financing activities (1,514 ) (48,069 ) Effect of exchange rate changes on cash and cash equivalents 302 9,574 Net increase in cash and cash equivalents 1,514 48,027 Cash and cash equivalents at beginning of period 4,178 132,622 Cash and cash equivalents at end of period 5,692 180,649 Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. 1Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending September 30, 2022, the three-month period ending June 30, 2022, and the equivalent three-month period that ended September 30, 2021. For all 3Q22 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2022 exchange rate of NT$ 31.74 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005486/en/Contacts Michael Lin / David Wong UMC, Investor Relations + 886-2-2658-9168, ext. 16900 jinhong_lin@umc.com david_wong@umc.com
3Q22 operating income doubles YoY; 22/28 revenue contribution reaches 25% Third Quarter 2022 Overview1: Revenue: NT$75.39 billion (US$2.38 billion) Gross margin: 47.3%; Operating margin: 40.0% Revenue from 22/28nm: 25% Capacity utilization rate: 100%+ Net income attributable to shareholders of the parent: NT$27 billion (US$851 million) Earnings per share: NT$2.19; earnings per ADS: US$0.345
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 2022. Third quarter consolidated revenue was NT$75.39 billion, increasing 4.6% QoQ from NT$72.06 billion in 2Q22. Compared to a year ago, 3Q22 revenue grew 34.9% YoY from NT$55.91 billion in 3Q21. Consolidated gross margin for 3Q22 reached 47.3%. Net income attributable to the shareholders of the parent was NT$27 billion, with earnings per ordinary share of NT$2.19. Jason Wang, co-president of UMC, said, “In the third quarter, our results benefited from product mix optimization and a more favorable exchange rate, while fab capacity remained fully utilized. Despite softening demand in consumer end markets, strengths in certain wireless communications areas drove further expansion in our 22/28nm business, which accounted for 25% of overall third-quarter revenue and lifted wafer average selling price. We believe our industry-leading position in OLED display driver ICs will continue to drive growth for our 22/28nm technologies amid growing adoption of OLED panels in smartphones and other end devices. We also saw sustained momentum in our automotive business during the quarter, and we intend to pursue more collaboration opportunities with existing and potential automotive customers.” Co-president Wang said, “Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust to current market conditions. At the same time, we will continue to deliver differentiated technology processes to enable customers’ product pipelines. We have revised the company’s 2022 capital expenditure down to US$3 billion, but our capacity expansions in Tainan and Singapore are still progressing as planned in order to meet long-term supply commitments. Despite near-term turbulences, the structural story of increasing silicon content driven by the rise of 5G, AIoT, and EV remains intact. With our comprehensive technology offering, focus on manufacturing excellence, and resilient financial structure, UMC will further increase our exposure to strong growth markets and consolidate our specialty technology leadership.” Co-president Wang added, “In terms of corporate sustainability, UMC made steady progress towards our goals across all three areas of ESG. Going into 2023, we will accelerate carbon emissions reduction efforts by proactively seeking ways to lower emissions associated with wafer manufacturing and products footprint, working with partners to address emissions from the value chain, as well as investing in net-zero technologies as we strive for net zero by 2050.” Summary of Operating Results Operating Results (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 Gross Profit 35,664 33,472 6.5 20,544 73.6 Operating Expenses (6,794 ) (6,706 ) 1.3 (6,636 ) 2.4 Net Other Operating Income and Expenses 1,287 1,398 (8.0 ) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net Non-Operating Income and Expenses 2,189 (2,586 ) - 4,317 (49.3 ) Net Income Attributable to Shareholders of the Parent 26,996 21,327 26.6 17,460 54.6 EPS (NT$ per share) 2.19 1.74 1.43 (US$ per ADS) 0.345 0.274 0.225 Third quarter operating revenues increased by 4.6% sequentially to NT$75.39 billion which was partially lifted due to a better product mix as well as favorable foreign exchange rate. Revenue contribution from 40nm and below technologies represented 42% of wafer revenue. Gross profit grew 6.5% QoQ to NT$35.66 billion, or 47.3% of revenue. Operating expenses grew 1.3% to NT$6.79 billion. Net other operating income declined to NT$1.29 billion. Net non-operating income totaled NT$2.19 billion. Net income attributable to shareholders of the parent amounted to NT$27 billion. Earnings per ordinary share for the quarter was NT$2.19. Earnings per ADS was US$0.345. The basic weighted average number of outstanding shares in 3Q22 was 12,305,516,644, compared with 12,283,479,334 shares in 2Q22 and 12,206,292,756 shares in 3Q21. The diluted weighted average number of outstanding shares was 12,635,661,561 in 3Q22, compared with 12,553,373,552 shares in 2Q22 and 12,411,100,649 shares in 3Q21. The fully diluted shares counted on September 30, 2022 were approximately 12,679,025,000. Detailed Financials Section Operating revenues increased to NT$75.39 billion. COGS increased 3.0% to NT$39.73 billion, which included 3.9% sequential increase in other manufacturing costs. Gross profit grew 6.5% QoQ to NT$35.66 billion. Operating expenses increased 1.3% QoQ to NT$6.79 billion, as Sales & Marketing grew 15.9% to NT$1.06 billion while R&D was up 3.0% QoQ to NT$3.30 billion, representing 4.4% of revenue. Net other operating income was NT$1.29 billion. In 3Q22, operating income grew 7.1% QoQ to NT$30.16 billion. COGS & Expenses (Amount: NT$ million) 3Q22 2Q22 QoQ % change 3Q21 YoY % change Operating Revenues 75,392 72,055 4.6 55,907 34.9 COGS (39,728) (38,583) 3.0 (35,363) 12.3 Depreciation (9,622) (9,616) 0.1 (9,900) (2.8) Other Mfg. Costs (30,106) (28,967) 3.9 (25,463) 18.2 Gross Profit 35,664 33,472 6.5 20,544 73.6 Gross Margin (%) 47.3% 46.5% 36.8% Operating Expenses (6,794) (6,706) 1.3 (6,636) 2.4 G&A (2,428) (2,579) (5.9) (2,119) 14.6 Sales & Marketing (1,061) (915) 15.9 (1,212) (12.5) R&D (3,304) (3,209) 3.0 (3,303) 0.0 Expected Credit Impairment Loss (1) (3) (75.8) (2) (68.6) Net Other Operating Income & Expenses 1,287 1,398 (8.0) 1,227 4.9 Operating Income 30,157 28,164 7.1 15,135 99.3 Net non-operating income in 3Q22 was NT$2.19 billion, primarily reflecting NT$1.29 billion in exchange gain and a NT$0.78 billion in net investment gain. Non-Operating Income and Expenses (Amount: NT$ million) 3Q22 2Q22 3Q21 Non-Operating Income and Expenses 2,189 (2,586) 4,317 Net Interest Income and Expenses 139 (163) (367) Net Investment Gain and Loss 780 (3,675) 4,534 Exchange Gain and Loss 1,293 1,361 164 Other Gain and Loss (23) (109) (14) In 3Q22, cash inflow from operating activities was NT$39.70 billion. Cash outflow from investing activities amounted to NT$21.42 billion, which included NT$23.13 billion in capital expenditure, resulting in free cash flow of NT$16.56 billion. Cash outflow from financing reached NT$26.69 billion, primarily from a NT$37.45 billion payment as cash distributed from additional paid- in capital partially offset by a NT$14.44 billion from the increase in deposits-in. Net cash outflow in 3Q22 totaled NT$3.07 billion. Over the next 12 months, the company expects to repay NT$ 4.43 billion in bank loans. Cash Flow Summary (Amount: NT$ million) For the 3-Month Period Ended Sep.30, 2022 For the 3-Month Period Ended Jun. 30, 2022 Cash Flow from Operating Activities 39,696 35,091 Net income before tax 32,346 25,578 Depreciation & Amortization 11,195 11,107 Share of loss (profit) of associates and joint ventures (328 ) 2,027 Income tax paid (652 ) (2,913 ) Changes in working capital & others (2,865 ) (708 ) Cash Flow from Investing Activities (21,419 ) (11,716 ) Decrease in financial assets measured at amortized cost 2,070 103 Acquisition of PP&E (22,466 ) (10,907 ) Acquisition of intangible assets (1,080 ) (815 ) Others 57 (97 ) Cash Flow from Financing Activities (26,688 ) (13,423 ) Bank loans (473 ) (11,615 ) Redemption of bonds (1,031 ) (2,484 ) Increase in deposits-in 14,441 864 Cash distributed from additional paid- in capital (37,446 ) - Others (2,179 ) (188 ) Effect of Exchange Rate 5,337 1,601 Net Cash Flow (3,074 ) 11,553 Beginning balance 183,723 172,170 Ending balance 180,649 183,723 Cash and cash equivalents slightly decreased to NT$180.65 billion. Days of inventory increased by 4 days to 66 days. Current Assets (Amount: NT$ billion) 3Q22 2Q22 3Q21 Cash and Cash Equivalents 180.65 183.72 113.11 Notes & Accounts Receivable 44.84 42.88 32.99 Days Sales Outstanding 53 51 51 Inventories, net 30.10 27.34 23.15 Days of Inventory 66 62 59 Total Current Assets 266.95 265.78 211.60 Current liabilities decreased to NT$108.01 billion, mainly from the reduction of in other as company distributed cash from additional paid-in capital to shareholders during Q3. Long-term credit/bonds increased to NT$46.15 billion. Total liabilities decreased to NT$204.21 billion, leading to a debt to equity ratio of 65%. Liabilities (Amount: NT$ billion) 3Q22 2Q22 3Q21 Total Current Liabilities 108.01 131.81 84.55 Notes & Accounts Payable 10.04 9.95 8.26 Short-Term Credit / Bonds 12.19 13.22 24.26 Payables on Equipment 19.40 11.60 6.72 Other 66.38 97.04 45.31 Long-Term Credit / Bonds 46.15 45.70 51.09 Long-Term Investment Liabilities 4.26 8.50 8.14 Total Liabilities 204.21 216.51 171.19 Debt to Equity 65 % 76 % 66 % Analysis of Revenue2 Revenue from Asia-Pacific declined to 62% while business from North America was 23% of sales. Business from Europe was 9% while contribution from Japan increased to 6%. Revenue Breakdown by Region Region 3Q22 2Q22 1Q22 4Q21 3Q21 North America 23 % 22 % 22 % 21 % 22 % Asia Pacific 62 % 65 % 64 % 66 % 65 % Europe 9 % 8 % 8 % 7 % 7 % Japan 6 % 5 % 6 % 6 % 6 % Revenue contribution from 22/28nm grew to 25% of the wafer revenue, while 40nm contribution was 17% of sales. Revenue Breakdown by Geometry Geometry 3Q22 2Q22 1Q22 4Q21 3Q21 14nm and below 0 % 0 % 0 % 0 % 0 % 14nm<x<=28nm 25 % 22 % 20 % 20 % 19 % 28nm<x<=40nm 17 % 18 % 18 % 18 % 18 % 40nm<x<=65nm 18 % 19 % 19 % 19 % 19 % 65nm<x<=90nm 8 % 7 % 8 % 8 % 8 % 90nm<x<=0.13um 12 % 12 % 12 % 12 % 12 % 0.13um<x<=0.18um 10 % 12 % 13 % 13 % 13 % 0.18um<x<=0.35um 8 % 8 % 7 % 7 % 8 % 0.5um and above 2 % 2 % 3 % 3 % 3 % Revenue from fabless customers accounted for 83% of revenue. Revenue Breakdown by Customer Type Customer Type 3Q22 2Q22 1Q22 4Q21 3Q21 Fabless 83 % 86 % 87 % 86 % 86 % IDM 17 % 14 % 13 % 14 % 14 % Revenue from the communication segment represented 45%, while business from computer applications decreased to 14%. Business from consumer applications was 27% as other segments increased to 14% of revenue. Revenue Breakdown by Application (1) Application 3Q22 2Q22 1Q22 4Q21 3Q21 Computer 14 % 16 % 17 % 17 % 17 % Communication 45 % 45 % 45 % 46 % 46 % Consumer 27 % 27 % 26 % 26 % 27 % Others 14 % 12 % 12 % 11 % 10 % (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, WLAN. Communication consists of handset components, broadband, 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 Blended average selling price (ASP) grew in 3Q22. (To view blended ASP trend, please click here for 3Q22 ASP) Shipment and Utilization Rate3 Wafer shipments decreased 1% QoQ to 2,597K in the third quarter, while quarterly capacity grew to 2,539K. Overall utilization rate in 3Q22 remained above 100%. Wafer Shipments 3Q22 2Q22 1Q22 4Q21 3Q21 Wafer Shipments (8” K equivalents) 2,597 2,622 2,513 2,546 2,503 Quarterly Capacity Utilization Rate 3Q22 2Q22 1Q22 4Q21 3Q21 Utilization Rate 100%+ 100%+ 100%+ 100%+ 100%+ Total Capacity (8” K equivalents) 2,539 2,528 2,420 2,419 2,383 Capacity4 Overall capacity in the third quarter increased to 2,539K 8-inch equivalent wafers. Capacity will grow in the fourth quarter of 2022 to 2,543K 8-inch equivalent wafers, reflecting the capacity expansion taking place at 8N. Annual Capacity in thousands of wafers Quarterly Capacity in thousands of wafers FAB Geometry (um) 2021 2020 2019 2018 FAB 4Q22E 3Q22 2Q22 1Q22 WTK 6" 5 – 0.15 329 371 370 396 WTK 6" 85 85 84 82 8A 8" 3 – 0.11 755 802 825 825 8A 8" 192 192 192 189 8C 8" 0.35 – 0.11 459 452 436 383 8C 8" 115 115 115 113 8D 8" 0.18 – 0.09 380 371 359 347 8D 8" 103 103 103 101 8E 8" 0.6 – 0.14 457 449 426 418 8E 8" 118 118 118 116 8F 8" 0.18 – 0.11 514 485 434 431 8F 8" 138 138 138 136 8S 8" 0.18 – 0.11 408 373 372 372 8S 8" 111 111 111 109 8N 8" 0.5 – 0.11 917 917 831 771 8N 8" 245 242 235 231 12A 12" 0.13 – 0.014 1,070 1,044 997 997 12A 12" 301 301 301 267 12i 12" 0.13 – 0.040 641 628 595 555 12i 12" 164 164 164 162 12X 12" 0.080 – 0.022 284 217 203 183 12X 12" 80 80 78 77 12M 12" 0.13 – 0.040 395 391 98 - 12M 12" 110 110 110 108 Total(1) 9,453 9,188 8,148 7,673 Total 2,543 2,539 2,528 2,420 YoY Growth Rate 3% 13% 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. Total capacity figures are expressed in 8-inch equivalent wafers. CAPEX CAPEX spending in 3Q22 totaled US$764 million. 2022 cash-based CAPEX budget will be US$3.0 billion. Capital Expenditure by Year - in US$ billion Year 2021 2020 2019 2018 2017 CAPEX $ 1.8 $ 1.0 $ 0.6 $ 0.7 $ 1.4 2022 CAPEX Plan 8" 12" Total 10% 90% US$3.0 billion Fourth Quarter 2022 Outlook & Guidance Quarter-over-Quarter Guidance: Wafer Shipments: To decrease by approximately 10% ASP in USD: To remain flat Gross Profit Margin: Will be in the low-40% range Capacity Utilization: 90% 2022 CAPEX: US$3.0 billion Recent Developments / Announcements Aug. 24, 2022 UMC and Cadence Collaborate on Analog/Mixed-Signal Flow for 22ULP/ULL Process Technologies Sep. 13, 2022 Avalanche Technology and UMC Announce 22nm Production of High-Density MRAM-Based Devices for Aerospace Applications Please visit UMC’s website for further details regarding the above announcements Conference Call / Webcast Announcement Wednesday, October 26, 2022 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 3Q22 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. The company provides high quality IC production with a focus on both logic and specialty technologies to serve every major sector of the electronics industry. UMC’s comprehensive technology and manufacturing solutions include logic/RF, embedded high voltage, embedded flash, RFSOI/BCD and IATF-16949 automotive manufacturing certification for all its manufacturing facilities. UMC operates 12 fabs that are strategically located throughout Asia with a maximum capacity of approximately 850,000 8-inch equivalent wafers per month. The company employs approximately 20,000 people worldwide, with offices in Taiwan, China, United States, Europe, Japan, Korea and Singapore. For more information, please visit: http://www.umc.com. Safe Harbor Statements This press release contains 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. These forward-looking statements include, but are not limited to, statements regarding anticipated financial results for the third quarter of 2022; the expected wafer shipment and ASP; the anticipated annual budget; capex strategies; environmental protection goals and water management strategies; impact of foreign currency exchange rates; expected foundry capacities; the ability to obtain new business opportunities; and information under the heading “Third Quarter of 2022 Outlook and Guidance.” 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 risk factors is included in UMC’s filings with the United States Securities and Exchange Commission, including its Annual Report on Form 20-F. 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. - FINANCIAL TABLES TO FOLLOW - UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheet As of September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) September 30, 2022 US$ NT$ % Assets Current assets Cash and cash equivalents 5,692 180,649 34.8 % Accounts receivable, net 1,413 44,842 8.6 % Inventories, net 948 30,102 5.8 % Other current assets 357 11,352 2.2 % Total current assets 8,410 266,945 51.4 % Non-current assets Funds and investments 1,951 61,938 11.9 % Property, plant and equipment 4,698 149,119 28.7 % Right-of-use assets 249 7,903 1.5 % Other non-current assets 1,056 33,489 6.5 % Total non-current assets 7,954 252,449 48.6 % Total assets 16,364 519,394 100.0 % Liabilities Current liabilities Short-term loans 7 217 0.0 % Payables 2,155 68,415 13.2 % Current portion of long-term liabilities 377 11,975 2.3 % Other current liabilities 864 27,402 5.3 % Total current liabilities 3,403 108,009 20.8 % Non-current liabilities Bonds payable 727 23,082 4.4 % Long-term loans 727 23,063 4.4 % Lease liabilities, noncurrent 166 5,284 1.0 % Other non-current liabilities 1,411 44,767 8.7 % Total non-current liabilities 3,031 96,196 18.5 % Total liabilities 6,434 204,205 39.3 % Equity Equity attributable to the parent company Capital 3,933 124,821 24.0 % Additional paid-in capital 336 10,668 2.1 % Retained earnings and other components of equity 5,649 179,321 34.5 % Total equity attributable to the parent company 9,918 314,810 60.6 % Non-controlling interests 12 379 0.1 % Total equity 9,930 315,189 60.7 % Total liabilities and equity 16,364 519,394 100.0 % Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data Year over Year Comparison Quarter over Quarter Comparison Three-Month Period Ended Three-Month Period Ended September 30, 2022 September 30, 2021 Chg. September 30, 2022 June 30, 2022 Chg. US$ NT$ US$ NT$ % US$ NT$ US$ NT$ % Operating revenues 2,375 75,392 1,761 55,907 34.9 % 2,375 75,392 2,270 72,055 4.6 % Operating costs (1,251 ) (39,728 ) (1,114 ) (35,363 ) 12.3 % (1,251 ) (39,728 ) (1,215 ) (38,583 ) 3.0 % Gross profit 1,124 35,664 647 20,544 73.6 % 1,124 35,664 1,055 33,472 6.5 % 47.3 % 47.3 % 36.8 % 36.8 % 47.3 % 47.3 % 46.5 % 46.5 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (38 ) (1,212 ) (12.5 %) (33 ) (1,061 ) (29 ) (915 ) 15.9 % - General and administrative expenses (77 ) (2,428 ) (67 ) (2,119 ) 14.6 % (77 ) (2,428 ) (82 ) (2,579 ) (5.9 %) - Research and development expenses (104 ) (3,304 ) (104 ) (3,303 ) 0.0 % (104 ) (3,304 ) (101 ) (3,209 ) 3.0 % - Expected credit impairment loss (0 ) (1 ) (0 ) (2 ) (68.6 %) (0 ) (1 ) (0 ) (3 ) (75.8 %) Subtotal (214 ) (6,794 ) (209 ) (6,636 ) 2.4 % (214 ) (6,794 ) (212 ) (6,706 ) 1.3 % Net other operating income and expenses 40 1,287 39 1,227 4.9 % 40 1,287 44 1,398 (8.0 %) Operating income 950 30,157 477 15,135 99.3 % 950 30,157 887 28,164 7.1 % 40.0 % 40.0 % 27.1 % 27.1 % 40.0 % 40.0 % 39.1 % 39.1 % Net non-operating income and expenses 69 2,189 136 4,317 (49.3 %) 69 2,189 (81 ) (2,586 ) - Income from continuing operations before income tax 1,019 32,346 613 19,452 66.3 % 1,019 32,346 806 25,578 26.5 % 42.9 % 42.9 % 34.8 % 34.8 % 42.9 % 42.9 % 35.5 % 35.5 % Income tax expense (158 ) (5,004 ) (66 ) (2,100 ) 138.3 % (158 ) (5,004 ) (129 ) (4,088 ) 22.4 % Net income 861 27,342 547 17,352 57.6 % 861 27,342 677 21,490 27.2 % 36.3 % 36.3 % 31.0 % 31.0 % 36.3 % 36.3 % 29.8 % 29.8 % Other comprehensive income (loss) 137 4,336 (12 ) (370 ) - 137 4,336 (118 ) (3,749 ) - Total comprehensive income (loss) 998 31,678 535 16,982 86.5 % 998 31,678 559 17,741 78.6 % Net income attributable to: Shareholders of the parent 851 26,996 550 17,460 54.6 % 851 26,996 672 21,327 26.6 % Non-controlling interests 10 346 (3 ) (108 ) - 10 346 5 163 111.6 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 538 17,090 83.3 % 987 31,332 554 17,578 78.2 % Non-controlling interests 11 346 (3 ) (108 ) - 11 346 5 163 111.6 % Earnings per share-basic 0.069 2.19 0.045 1.43 0.069 2.19 0.055 1.74 Earnings per ADS (2) 0.345 10.95 0.225 7.15 0.345 10.95 0.274 8.70 Weighted average number of shares outstanding (in millions) 12,306 12,206 12,306 12,283 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data For the Three-Month Period Ended For the Nine-Month Period Ended September 30, 2022 September 30, 2022 US$ NT$ % US$ NT$ % Operating revenues 2,375 75,392 100.0 % 6,644 210,870 100.0 % Operating costs (1,251 ) (39,728 ) (52.7 %) (3,599 ) (114,230 ) (54.2 %) Gross profit 1,124 35,664 47.3 % 3,045 96,640 45.8 % Operating expenses - Sales and marketing expenses (33 ) (1,061 ) (1.4 %) (102 ) (3,230 ) (1.5 %) - General and administrative expenses (77 ) (2,428 ) (3.2 %) (228 ) (7,235 ) (3.4 %) - Research and development expenses (104 ) (3,304 ) (4.4 %) (301 ) (9,547 ) (4.5 %) - Expected credit impairment loss (0 ) (1 ) (0.0 %) (0 ) (2 ) (0.0 %) Subtotal (214 ) (6,794 ) (9.0 %) (631 ) (20,014 ) (9.4 %) Net other operating income and expenses 40 1,287 1.7 % 127 4,029 1.9 % Operating income 950 30,157 40.0 % 2,541 80,655 38.3 % Net non-operating income and expenses 69 2,189 2.9 % 29 916 0.4 % Income from continuing operations before income tax 1,019 32,346 42.9 % 2,570 81,571 38.7 % Income tax expense (158 ) (5,004 ) (6.6 %) (399 ) (12,673 ) (6.0 %) Net income 861 27,342 36.3 % 2,171 68,898 32.7 % Other comprehensive income (loss) 137 4,336 5.7 % 63 2,009 0.9 % Total comprehensive income (loss) 998 31,678 42.0 % 2,234 70,907 33.6 % Net income attributable to: Shareholders of the parent 851 26,996 35.8 % 2,147 68,131 32.3 % Non-controlling interests 10 346 0.5 % 24 767 0.4 % Comprehensive income (loss) attributable to: Shareholders of the parent 987 31,332 41.6 % 2,210 70,139 33.3 % Non-controlling interests 11 346 0.4 % 24 768 0.3 % Earnings per share-basic 0.069 2.19 0.175 5.54 Earnings per ADS (2) 0.345 10.95 0.873 27.70 Weighted average number of shares outstanding (in millions) 12,306 12,291 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. (2) 1 ADS equals 5 common shares. UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statement of Cash Flows For The Nine-Month Period Ended September 30, 2022 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) US$ NT$ Cash flows from operating activities : Net income before tax 2,570 81,571 Depreciation & Amortization 1,061 33,692 Share of loss of associates and joint ventures 112 3,557 Income tax paid (137 ) (4,333 ) Changes in working capital & others (301 ) (9,582 ) Net cash provided by operating activities 3,305 104,905 Cash flows from investing activities : Decrease in financial assets measured at amortized cost 898 28,488 Acquisition of property, plant and equipment (1,392 ) (44,176 ) Acquisition of intangible assets (73 ) (2,316 ) Others (12 ) (379 ) Net cash used in investing activities (579 ) (18,383 ) Cash flows from financing activities : Decrease in short-term loans (55 ) (1,759 ) Redemption of bonds (339 ) (10,763 ) Proceeds from long-term loans 22 710 Repayments of long-term loans (367 ) (11,650 ) Increase in guarantee deposits 484 15,374 Cash distributed from additional paid-in capital (1,180 ) (37,446 ) Others (79 ) (2,535 ) Net cash used in financing activities (1,514 ) (48,069 ) Effect of exchange rate changes on cash and cash equivalents 302 9,574 Net increase in cash and cash equivalents 1,514 48,027 Cash and cash equivalents at beginning of period 4,178 132,622 Cash and cash equivalents at end of period 5,692 180,649 Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 per U.S. Dollar. 1Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending September 30, 2022, the three-month period ending June 30, 2022, and the equivalent three-month period that ended September 30, 2021. For all 3Q22 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2022 exchange rate of NT$ 31.74 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005486/en/
Michael Lin / David Wong UMC, Investor Relations + 886-2-2658-9168, ext. 16900 jinhong_lin@umc.com david_wong@umc.com
