UMC Reports First Quarter 2017 Results

Board of Directors propose NT$0.50 per share cash dividend; anticipate flat 2Q17 outlook

First Quarter 2017 Overview1:

  • Revenue: NT$37.42 billion (US$1.24 billion)
  • Gross margin: 19.9%
  • Foundry revenue from 28nm: 17%; Foundry operating margin: 4.0%
  • Foundry capacity utilization rate: 96%
  • Net income attributable to the stockholders of the parent: NT$2.29 billion (US$75.42 million)
  • Earnings per share: NT$0.19; earnings per ADS: US$0.031

TAIPEI, Taiwan — (BUSINESS WIRE) — April 26, 2017United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2017.

First quarter consolidated revenue was NT$37.42 billion, down from NT$38.31 billion in 4Q16 and up 8.8% YoY from NT$34.40 billion in 1Q16. 1Q17 consolidated gross margin was 19.9%. Net income attributable to the stockholders of the parent was NT$2.29 billion, with earnings per ordinary share of NT$0.19.

Mr. Po-Wen Yen, CEO of UMC, said, “In the first quarter of 2017, UMC’s revenue from foundry operations was NT$37.35 billion. Robust chip demand lifted overall capacity utilization to 96%, bringing wafer shipments to 1.68 million 8-inch equivalent wafers. Gross margin was 20.1%. During the quarter, the utilization rates in 8” fabs as well as 12” advanced nodes approached near full capacity, driven by the strength in consumer and communication segments. Recently, Taiwan’s government authorities approved UMC’s application to license 28nm technology to our subsidiary company, United Semiconductor in Xiamen. This licensing approval will help Fab 12X to ramp its manufacturing scale, expand its process technology offerings and complements UMC’s overall growth strategy. The production ramp of Fab 12X will also help our customers diversify their foundry manufacturing and enhance UMC’s exposure to the Chinese semiconductor supply chain.”

CEO Yen continued, “Looking into the second quarter, despite recent headwinds in foreign exchange markets, we anticipate a relatively flat outlook for 2Q17. Furthermore, current forecasts reflect a pick-up in mature 12” wafer business due to higher demand from wireless, internet of things (IoT) and consumer electronics. However, the increased demand in legacy 300mm wafer shipments will be offset by a decline in 28nm business. In terms of advanced nodes, we started shipping 14nm wafers to customers in the first quarter of 2017. As we transition from 28nm to 14nm manufacturing, we expect our 14nm shipments to sequentially increase in 2Q17. With our manufacturing technologies making steady progress, we continue to strike a balance between maintaining disciplined CAPEX planning while ensuring the interests of our shareholders. As a result, our board of directors has proposed a cash dividend distribution of approximately NT$0.50 per share, which will be subject to shareholders’ approval during UMC’s Annual General Meeting on June 8, 2017.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)   1Q17   4Q16   QoQ %
change
  1Q16   YoY %
change
Net Operating Revenues   37,418   38,306   (2.3 )   34,404   8.8
Gross Profit 7,428 8,759 (15.2 ) 5,034 47.6
Operating Expenses (6,211 ) (6,627 ) (6.3 ) (5,065 ) 22.6
Net Other Operating Income and Expenses 154 144 6.9 15 926.7
Operating Income (Loss) 1,371 2,276 (39.8 ) (16 ) -
Net Non-Operating Income and Expenses (304 ) (1,210 ) (74.9 ) 46 -
Net Income Attributable to Stockholders of the Parent 2,286 2,548 (10.3 ) 210 988.6

EPS (NT$ per share)

0.19 0.21 0.02
(US$ per ADS)   0.031     0.035         0.003      

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