UMC Reports Third Quarter 2015 Results

Inventory correction dampening 4Q15 demand; cyclical bottom approaching

(PRNewswire) —

Third Quarter 2015 Overview[1]:

  • Revenue: NT$35.32 billion (US$1.07 billion)
  • Gross margin: 19.6%; operating margin: 2.8%
  • Foundry revenue from advanced nodes: 10% from 28nm, 25% from 40nm
  • Foundry capacity utilization rate: 89%
  • Net income attributable to the stockholders of the parent: NT$1.71 billion (US$52 million)
  • Earnings per share: NT$0.14; earnings per ADS: US$0.021

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 2015.

Revenue was NT$35.32 billion, with gross margin at 19.6% and operating margin at 2.8%. Net income attributable to the stockholders of the parent was NT$1.71 billion, with earnings per ordinary share of NT$0.14.

Po-Wen Yen, CEO of UMC, said "In the third quarter of 2015, our foundry segment posted revenue of NT$35.08 billion, with gross margin at 20.3%. Wafer shipments totaled 1.47 million 8-inch equivalent wafers, leading to an overall capacity utilization rate of 89%. Our 40nm revenue contribution grew to 25% of sales, driven by demand strength in the communication and consumer segments. Our 8" fab utilization maintained above 95%, reflecting stable demand for logic and specialty applications. To better take advantage of the opportunities within mature nodes, UMC will leverage the advancements made in proven technologies to help customers compete in the IoT market. We recently announced volume production for touch controller ICs based on UMC's 0.11um embedded flash process that uses the most aggressive aluminum metal design rules to strengthen customers' product and market competitiveness through lower die cost. In terms of corporate sustainability, in the third quarter 2015, UMC was selected as a DJSI global component for the eighth consecutive year."

CEO Yen continued, "Although the continuing IC inventory adjustment will dampen fourth quarter wafer shipments, UMC continues on the path towards long-term growth. While Moore's Law continues, 28nm remains a strong and long-lasting node, with many applications migrating to this geometry. Throughout 2015, UMC engineers and Fab12A have worked tirelessly to bring several new 28nm product tape-outs into volume production. At the same time, we have also received multiple customer inquiries requesting optimized, cost-effective solutions derived from our fundamental 28nm High-K Metal Gate process. UMC is working to bring a timely conversion of new 28nm requirements into production, which will strengthen our business. In addition, UMC is also leveraging mature node technology development to deliver specialty technology platforms addressing customer applications, further diversifying our product mix. Going forward, UMC will continue to drive process innovations across leading and legacy technologies, as well as proactively expanding worldwide manufacturing services to support our growth in the IC industry."

Summary of Operating Results

Operating Results

(Amount: NT$ million)

3Q15

2Q15

QoQ %
change

3Q14

YoY %
change

Net Operating Revenues

35,320

38,012

(7.1)

35,214

0.3

Gross Profit

6,911

8,723

(20.8)

7,559

(8.6)

Operating Expenses

(5,126)

(4,864)

5.4

(5,270)

(2.7)

Net Other Operating Income and Expenses

(804)

17

-

(602)

33.6

Operating Income

981

3,876

(74.7)

1,687

(41.8)

Net Non-Operating Income and Expenses

410

1,304

(68.6)

1,305

(68.6)

Net Income Attributable to Stockholders of the Parent

1,708

4,600

(62.9)

2,916

(41.4)

EPS (NT$ per share)

0.14

0.37


0.23


       (US$ per ADS)

0.021

0.056


0.035



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