UMC Reports Fourth Quarter 2015 Results

2015 full year foundry revenue up 9%; EPS up 11% YoY to NT$1.08

(PRNewswire) —Jan 27, 2016

Fourth Quarter 2015 Overview [1]:

  • Revenue: NT$33.85 billion (US$1.03 billion)
  • Gross margin: 20.6%; operating margin: 5.6%
  • Foundry revenue from advanced nodes: 11% from 28nm, 24% from 40nm
  • Foundry capacity utilization rate: 83%
  • Net income attributable to stockholders of the parent: NT$3.16 billion (US $96 million)
  • Earnings per share: NT$0.25; earnings per ADS: US$0.038

United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its consolidated operating results for the fourth quarter of 2015.

Fourth quarter consolidated revenue was NT$33.85 billion, a 4.2% decrease from NT$35.32 billion in 3Q15 and a YoY decline of 9.1% from NT$37.24 billion in 4Q14. 4Q15 consolidated gross margin was 20.6%, with operating margin at 5.6%. Net income attributable to stockholders of the parent was NT$3.16 billion, with earnings per ordinary share of NT$0.25. For 2015, full year revenue was NT$144.83 billion, with NT$10.84 billion in operating income, NT$13.45 billion net income attributable to stockholders of parent and NT$1.08 earnings per share.

Po-Wen Yen, CEO of UMC, said "In the fourth quarter of 2015, UMC's foundry revenue declined 4.2% sequentially to NT$33.59 billion, due to continued inventory correction within the semiconductor industry. Wafer shipments reached 1.38 million 8-inch equivalent wafers, bringing overall capacity utilization rate to 83%. Our 28nm technology constituted 11% of 4Q15 revenue. For full year 2015, our foundry revenue grew 9% over 2014, aided by a 5% increase in total manufacturing capacity, higher blended ASP due to increased advanced node contribution and overall loading of approximately 90%. Our 28nm business tripled in 2015, propelled by strong demand from the communication sector. Furthermore, we have introduced a refined 28nm High-K Metal Gate (HKMG) process variation for communication ICs called 28HPCU, which operates at the same speed range as 28nm HKMG, but with lower standby current to considerably extend battery life. UMC will continue to strengthen our 28nm technology roadmap with enhanced processes that raise chip performance while lowering power consumption. Besides 28nm technologies, we have also observed stronger demand for chips used in the automotive industry, on both 8" and 12" manufacturing processes. UMC customers are now migrating from consumer grade products to more stringent grade 1 and grade 0 semiconductors designed for critical automotive safety functions. These products include power management, display driver, imaging sensors, and microcontrollers. As more products begin to rely on UMC's comprehensive 'Automotive Service Package', our exposure in the automotive supply chain will help generate a new revenue stream for our foundry business."

CEO Yen continued, "We are seeing signs of cyclical bottoming as most of our customers' inventory has returned to reasonable levels. For the first quarter of 2016, we expect our foundry revenue to remain flat. UMC is optimistic on the growth outlook for the foundry industry, led by communication and consumer products. We anticipate positive momentum for our 28nm as new products scheduled to enter production throughout the year provide additional business traction. To meet increased demand, we plan to expand our 12" operations with Tainan Fab 12A phase 5 coming online and Xiamen Fab 12X currently under construction. UMC has budgeted 2016 CAPEX at approximately US$2.2 billion, which will mainly focus on adding 300mm capacity. As a key upstream supplier, we look forward to expanding our involvement in exciting new applications, which will enable UMC to sustain our momentum across the industry."

Summary of Operating Results

Operating Results

(Amount: NT$ million)

  4Q15

  3Q15

QoQ %
change

 4Q14

YoY %
change

Net Operating Revenues

33,849

35,320

(4.2)

37,235

(9.1)

Gross Profit

6,979

6,911

1.0

10,186

(31.5)

Operating Expenses

(5,065)

(5,126)

(1.2)

(5,672)

(10.7)

Net Other Operating Income and Expenses

(34)

(804)

(95.8)

18

-

Operating Income

1,880

981

91.6

4,532

(58.5)

Net Non-Operating Income and Expenses

906

410

121.0

843

7.5

Net Income Attributable to Stockholders of the Parent

3,160

1,708

85.0

4,563

(30.7)

EPS (NT$ per share)

0.25

0.14

 

0.36

 

       (US$ per ADS)

0.038

0.021

 

0.055

 

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