UMC Reports 2006 Third Quarter Results:
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UMC Reports 2006 Third Quarter Results:

Percentage of Revenue from 90nm and below exceeds 21%

    TAIPEI, Taiwan, Oct. 25 /Xinhua-PRNewswire-FirstCall/ --

    Third Quarter 2006 Overview(1):
    -- Revenue increased 8.2% to NT$27.85 billion (US$842 million)
    -- Operating profit increased 86.3% to NT$3.04 billion (US$92 million)
    -- Net income was NT$8.59 billion (US$260 million)
    -- Revenue from 90nm technology and below increased to 21% of total
       revenue
    -- EPS was NT$0.48; EPADS was US$0.073

United Microelectronics Corporation (NYSE: UMC) ("UMC" or "the Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the third quarter of 2006.

"We are pleased with our Q3 results," said UMC Chairman and CEO, Dr. Jackson Hu." Wafer shipments increased by 1.7% and ASP increased by 6%. As a result, revenue increased 8.2% to NT$27.85 billion, with operating profit improving by 86.3% to NT$3.04 billion. Total sales from 90nm and below reached 21% of revenue."

Dr. Hu continued, "We clearly saw the benefits of high utilization in advanced technology nodes, which was responsible for improving our gross margin and bottom line. Solid demand for 90nm was a significant contributing factor to better results in the quarter. Furthermore, the number of new 90nm customers and products in production for Q3 was still relatively small, and we have many more 90nm customer products in various stages of development that will ramp to production in the following quarters. This validates the direction we have followed for the last two years: to focus on expanding our customer base in advanced technology. For example, for the 65nm generation, two customers are in small volume production and revenue contribution in Q3 was approximately 1%. Today, we are engaged with nine customers from a variety of sectors that include cell phone, FPGA, graphics and broadband applications. Our yield improvement for 65nm has been even faster than for the 90nm generation."

"For Q4, we do foresee some downward adjustment from certain advanced technology customers, mainly at the 0.13um technology node for the communication sector. Conversely, in emerging markets such as China, the demand from other customers for handset and display driver applications is quite strong. This is likely due to an improvement in the inventory situation in those areas. For the computer sector, the market appears to be anticipating the launch of Vista, which has delayed demand somewhat. Although the market climate varies to some extent for different customers, in general, we believe that the overall inventory situation has improved. Since the build-up for the holiday season will be essentially complete in the October- November time-frame, customers will be monitoring the strength of the holiday season sell-through to get a clearer picture of future demand. The launch of Vista will also be a significant factor."



    Summary of Operating Results

    Operating Results
    (Amount: NT$ million)                         QoQ %               YoY %
                             3Q06      2Q06      change      3Q05     change

    Revenue                27,852     25,751        8.2     23,579      18.1
    Gross Profit            6,814      5,171       31.8      2,954     130.7
    Operating Expenses     (3,777)    (3,541)       6.7     (3,514)      7.5
    Operating Income        3,037      1,630       86.3       (560)       --
    (Loss)
    Non-op. Income          6,438      5,076       26.8      2,725     136.3
    (Expenses)
    Net Income              8,592      6,052       42.0      2,165     296.9
    EPS   (NT$ per share)    0.48       0.34                  0.11
           (US$ per ADS)    0.073      0.051                 0.017


Revenue for 3Q06 was NT$27.85 billion, which represents an 8.2% QoQ increase from NT$25.75 billion in 2Q06, and a 18.1% YoY increase from NT$23.58 billion in 3Q05. The gross profit for the quarter was NT$6.81 billion, or 24.5% of revenue, compared to NT$5.17 billion, or 20.1% of 2Q06 revenue. The increase in gross margin is primarily attributable to a richer product mix that consists of a greater percentage of revenue from leading-edge processes. Operating profit for the quarter was NT$3.04 billion, representing an 86.3% increase from NT$1.63 billion in 2Q06. Net income for 3Q06 was NT$8.59 billion, which is a 42.0% increase from NT$6.05 billion in 2Q06.

Earnings per ordinary share (EPS) for the quarter were NT$0.48. Earnings per ADS (EPADS) were US$0.073. This compares with 2Q06 earnings per ordinary share of NT$0.34 and earnings per ADS of US$0.051. One ADS represents five Taiwan listed ordinary shares. The basic weighted average outstanding shares in 3Q06 were 17,542,040,175 shares, compared with 17,468,679,418 shares in 2Q06 and 18,670,517,452 shares in 3Q05. The diluted weighted average outstanding shares were 18,175,957,374 shares in 3Q06, compared with 18,096,042,299 shares in 2Q06 and 18,849,371,240 shares in 3Q05. The fully diluted share count on Sep. 30, 2006 was 18,793,029 thousand. The increased shares in 3Q06 were primarily due to new share issuance for capitalization of retained earnings and capital reserve.

    Detailed Financials Section



    COGS & Expenses
                                                   QoQ%                 YoY%
    (Amount: NT$ million)       3Q06       2Q06   change      3Q06     change
    Revenue                    27,852     25,751    8.2      23,579      18.1
    COGS                      (21,038)   (20,580)   2.2     (20,625)      2.0
     Depreciation              (9,422)    (9,965)  (5.4)    (10,712)    (12.0)
     Other Mfg. Costs         (11,616)   (10,615)   9.4      (9,913)     17.2
    Gross Profit                6,814      5,171   31.8       2,954     130.7
    Gross Margin (%)             24.5%      20.1%              12.5%
    Total Operating Exp.      (3, 777)   (3, 541)   6.7     (3, 514)      7.5
      G&A                        (682)      (676)   0.9        (877)    (22.2)
      Sales & Marketing          (683)      (761) (10.2)       (618)     10.5
      R&D                      (2,412)    (2,104)  14.6      (2,019)     19.5
    Operating Income(Loss)      3,037      1,630   86.3        (560)       --
    Operating Margin (%)         10.9%       6.3%              -2.4%


Depreciation and amortization expenses were NT$10.65 billion in 3Q06, compared to NT$11.55 billion in 2Q06. Depreciation within COGS decreased by 5.4% to NT$9.42 billion, due to lower depreciation of 8" fabs. Total operating expenses increased by 6.7% to NT$3.78 billion. Sales & Marketing expenses decreased to NT$683 million, mainly because of a decreased IP amortization. R&D expenses increased to NT$2.41 billion primarily due to increased developmental costs associated with 45nm and 65nm process technology. The total R&D expense was 8.7% of revenue in 3Q06.



    Non-operating Income (Expenses)

    (Amount: NT$ million)                   3Q06      2Q06       3Q05
    Net Non-operating Income (Exp.)        6,438     5,076      2,725
      Net Interest Income (Expense)          245       176         --
      Net Investment Income (Loss)         1,647       433        111
      Gain on Disposal of Investment       4,365     4,465      2,133
      Exchange Gain (Loss)                    91        49        171
      Others                                  90       (47)       310



    Net non-operating income for 3Q06 was NT$6.44 billion.  Net investment
income was NT$1.65 billion, which included NT$816 million in cash dividends,
NT$232 million in income from Unimicron and NT$163 million in income from FVC.
Gains on the disposal of investments were NT$4.37 billion, mainly from the
sale of MediaTek shares.



    Cash Flow Summary

                                         For the 3-Month     For the 3-Month
    (Amount: NT$ million)                   Period Ended        Period Ended
                                           Sep. 30, 2006       Jun. 30, 2006
    Cash Flow from Operations                      7,509              11,886
      Net Income                                   8,592               6,052
      Depreciation & Amortization                 10,651              11,551
      Changes in working capital                  (7,972)               (986)
      Others                                      (3,762)             (4,731)
    Cash Flow from Investing                      (3,836)             (3,920)
      Capital Expenditures                        (7,521)             (5,056)
      Others                                       3,685               1,136
    Cash Flow from Financing                     (10,674)            (14,304)
    Effect of Exchange Rate                          (45)                 16
    Net Cash Flow                                 (7,046)             (6,322)


Net cash outflow was NT$7.05 billion in 3Q06. UMC's free cash flow for the 9-month period ending September 30, 2006 was NT$13.01 billion. The decrease in working capital included NT$6.82 billion in ProMos share purchases. Over the next 12 months, the company expects to repay an additional NT$7.25 billion in corporate bonds.



    Current Assets
    (Amount: NT$ billion)                         3Q06       2Q06       3Q05
    Cash & Cash Equivalents                      83.00      90.05      71.79
    Notes & Accounts Receivable                  14.47      12.56      13.73
      Days Sales Outstanding                        44         43         45
    Inventory                                    10.79      10.38       9.38
      Avg. Inventory Turnover                       48         45         39
    Total Current Assets                        121.11     119.57     102.51


Cash and cash equivalents decreased by NT$7.05 billion to NT$83 billion. The increase in Notes and Accounts Receivable reflected higher revenue from operations in 3Q06. Days sales outstanding(2) increased slightly to 44 days, and average inventory turnover increased to 48 days.



    Liabilities
    (Amount: NT$ billion)                         3Q06       2Q06       3Q05
    Total Current Liabilities                    34.41      36.97      21.81
      Accounts Payable                            4.39       4.73       4.51
      Short-term Credit / Bonds                  10.39      10.31       6.08
      Others                                     19.63      21.93      11.22
    Long-term Liabilities                        30.57      30.28      28.50
    Total Liabilities                            68.62      70.87      54.07
    Debt to Equity                                 25%        26%        21%


Total liabilities decreased by NT$2.25 billion to NT$68.62 billion in 3Q06. UMC's Debt Ratio was 19.8% and Debt to Equity ratio was 25% at the end of 3Q06.


    Analysis of Revenue (3)



    Revenue Breakdown by Region
    Region                      3Q06     2Q06     1Q06     4Q05     3Q05
    North America                60%      51%      46%      49%      48%
    Asia Pacific                 27%      35%      43%      42%      43%
    Europe                       10%      11%       9%       7%       7%
    Japan                         3%       3%       2%       2%       2%


The percentage of revenue from North American customers increased to 60% of total revenue in 3Q06, mainly due to seasonally strong demand, particularly from the communication segment. The percentage of revenue from Asia Pacific customers dropped to 27% due to inventory rationalization by some Consumer and Computer customers.



    Revenue Breakdown by Geometry
    Geometry                    3Q06     2Q06     1Q06     4Q05     3Q05
    90nm                         21%      16%      13%      15%      14%
    0.13um                       25%      22%      20%      23%      18%
    0.15um                        7%       9%      12%      10%      10%
    0.15um< x< =0.18um           19%      20%      21%      19%      19%
    0.18um< x< =0.25um            6%       6%       5%       6%       8%
    0.25um< x< =0.35um           13%      18%      21%      19%      22%
    0.5um and above               9%       9%       8%       8%       9%


The percentage of revenue from 90nm and below business increased to 21% in 3Q06, mainly due to strong demand for communication components and PC graphic chips. The percentage of revenue from 0.13um and below was 46% in 3Q06, which was a large increase from 38% of sales in 2Q06.



    Revenue Breakdown by Customer Type
    Customer Type               3Q06     2Q06     1Q06     4Q05     3Q05
    Fabless                      56%      63%      73%      67%      71%
    IDM                          44%      37%      27%      33%      29%
    System                        0%       0%       0%       0%       0%


The percentage of revenue from fabless customers decreased to 56% in 3Q06 from 63% in 2Q06 as several Asian fabless customers adjusted their inventory levels, although demand from IDM customers remained strong.



    Revenue Breakdown by Application(i)
    Application                 3Q06     2Q06     1Q06     4Q05     3Q05
    Computer                     15%      14%      19%      20%      19%
    Communication                55%      56%      51%      54%      47%
    Consumer                     28%      28%      28%      24%      32%
    Memory                        1%       1%       1%       1%       1%
    Others                        1%       1%       1%       1%       1%

     (i) Computer consists of ICs such as HDD controllers, DVD-ROM/CD-ROM
         drives ICs, LCD drivers, graphic processors, and PDAs.
         Communication consists of xDSL, DSP, WLAN, LAN controllers, handset
         components, caller ID devices, etc. Consumer consists of ICs used
         for DVD players, game consoles, digital cameras, smart cards, toys,
         etc.  Memory consists of DRAM, SRAM, Flash, EPROM, ROM, and EEPROM.


The breakdown among communication, PC and consumer segments in 3Q06 was very similar to 2Q06. Revenue from the communication segment was 55% of total revenue in 3Q06, due to seasonally strong demand. Revenue from the computer segment increased slightly to 15% of total revenue in 3Q06 due to advanced PC graphic demand.

Blended Average Selling Price Trend

The blended average selling price (ASP) in 3Q06 increased by 6%, mainly due to increased wafer shipments of 0.13um and below process technologies.

    (To view ASP trend, visit

http://www.umc.com/english/investors/3Q06_ASP_trend.asp )

    Shipment and Utilization Rate (4)



    Wafer Shipments
                                3Q06     2Q06     1Q06     4Q05     3Q05
    Wafer Shipments
    ('000 8-inch eq.)            799      786      754      810      741



    Quarterly Capacity Utilization Rate
                                3Q06     2Q06     1Q06     4Q05     3Q05
    Utilization Rate             82%      80%      79%(ii)  86%      78%
    Total Capacity
    ('000 8-inch eq.)          1,010    1,002      985      973      970

     (ii)  1Q06 utilization rate was calculated based on 1Q06 available
           capacity, which is about 95% of total capacity after factoring in a
           5% productivity loss due to annual scheduled maintenance.


799 thousand 8-inch equivalent wafers were shipped in 3Q06, which was a 1.7% increase from the 786 thousand 8-inch equivalent wafers shipped in the previous quarter. Overall utilization rate for the quarter improved to 82%.

Capacity(5)

Total capacity during 3Q06 was 1,010 thousand 8-inch equivalent wafers, which was an increase of 8 thousand 8-inch equivalent wafers compared to 2Q06. The increase was mainly due to capacity expansion at Fab12i. The estimated capacity in 4Q06 is expected to be 1,018 thousand 8-inch equivalent wafers. Estimated capacity in 2006 will be about 4,015 thousand 8-inch equivalent wafers, a 4% increase YoY from 2005.



    Annual Capacity in thousands of 8-inch wafer equivalents

    FAB               Geometry(um)  2006E    2005    2004    2003

    Fab6A       6"      3.5-0.45     326      344     346     352
    Fab8AB      8"      0.5-0.25     816      816     796     801
    Fab8C       8"     0.35-0.15     400      401     386     325
    Fab8D       8"     0.18-0.09     252      274     256     238
    Fab8E       8"      0.5-0.18     406      404     401     354
    Fab8F       8"     0.25-0.15     372      378     349     342
    Fab8S(iii)  8"     0.25-0.15     276      278     131       0
    Fab12A     12"     0.18-0.065    754      597     392     234
    Fab12i(iv) 12"     0.13-0.065    413      363     101       0
    Total (v)                      4,015    3,855   3,158   2,646
    YoY Growth Rate                   4%      22%     19%      3%



    Quarterly Capacity in thousands of 8-inch wafer equivalents

     FAB         4Q06E    3Q06    2Q06   1Q06
     Fab 6A        80       82     82      82
     Fab 8A       204      204    204     204
     Fab 8C       100      100    100     100
     Fab 8D        63       63     63      63
     Fab 8E       102      102    101     101
     Fab 8F        93       93     93      93
     Fab 8S        69       69     69      69
     Fab 12A      193      192    191     178
     Fab 12i      114      105     99      95
     Total(v)   1,018    1,010  1,002     985

    (iii) Former fab of SiSMC, which was acquired from Silicon Integrated
          Systems in July 2004.
    (iv)  Former fab of UMCi, a UMC wholly owned subsidiary in December
          2004 that was merged into UMC in April 2005
    (v)   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.



    CAPEX

    UMC Capital Expenditure by Year
    (US$ billion)    2005       2004       2003      2002      2001     2000
    CAPEX            $0.7(vi)  $1.53      $0.37      $0.8      $1.1     $2.8



    2006 CAPEX Plan   8" fab   12" fab     12" R&D      Total
    UMC                3%        87%        10%     US$1 billion

(vi) 2005 CAPEX contained UMC 2005 full year CAPEX and UMCi CAPEX during 1Q05.

UMC's cash based CAPEX budget for 2006 remains unchanged at US$1 billion. Approximately 97% of the spending is expected to be for expansion and R&D at our 300mm facilities. Total capital expenditure during the first three quarters of 2006 was US$566 million.

    Recent Developments / Announcements
    Oct. 19, 2006   UMC and NDL Sign Agreement to Establish Sponsorship
                    Program for Technology Research
    Oct. 09, 2006   UMC Low-power Process Helps Actel Put Freeze on IGLOO
                    Competition
    Oct. 08, 2006   UMC Singapore Receives Award from the Health Promotion
                    Board of Singapore
    Oct. 02, 2006   UMC and IME to Partner on Advanced Noise Modeling for
                    Nanometer Technologies
    Sep. 04, 2006   UMC Receives "Outstanding Risk Management Performance
                    Award" from World Leading Insurance Company AIG
    Aug. 02, 2006   UMC 2Q 2006 Financial Results

Please visit UMC's website http://www.umc.com/english/news/index.asp for further details regarding the above announcements.

    Fourth Quarter of 2006 Outlook & Guidance
    Quarter-over-quarter Guidance:

     -- Wafer shipments: to decrease by 2-3%
     -- Wafer ASP in US$: to decrease by 5-6%
     -- Capacity utilization rate: approximately 75%
     -- Profitability: gross profit margins to be approximately 20%
     -- Percentage of 90nm & below revenues: expected to be over 20%
     -- The communication segment is expected to be the strongest, followed by
        computer segment and consumer segment
     -- 2006 CAPEX budget: US$1 billion

    Conference Call / Webcast Announcement
    Wednesday, October 25, 2006

    Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)
    Dial-in numbers and Access Codes:
    Asia/Europe:      +1-617-614-6204
    North America: 800-798-2796
    Access Code:      UMCCALL

A live webcast and replay of the 3Q06 results announcement will be available at www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC) is a leading global semiconductor foundry that manufactures advanced process ICs for applications spanning every major sector of the semiconductor industry. UMC delivers cutting-edge foundry technologies that enable sophisticated system-on-chip (SoC) designs, including volume production 90nm, industry-leading 65nm, and mixed signal/RFCMOS. UMC's 10 wafer manufacturing facilities include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. The company employs approximately 12,000 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web athttp://www.umc.com .

Safe Harbor Statements

Except for statements in respect of historical matters, the statements in this release contain "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. 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, among other things: our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; the risks associated with international global business activities; our dependence upon key personnel; general economic and political conditions, including those related to the semiconductor, communications, consumer electronics and computer industries; possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; reduced end-user purchases relative to expectations and orders; fluctuations in foreign currency exchange rates; and those risks identified in the section entitled "Risk Factors" in UMC's Annual Report on Form 20-F ("20-F") for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission on June 26, 2006.

The financial statements included in this release are unaudited and unconsolidated, and prepared and published in accordance with ROC GAAP. Investors are cautioned that there are many differences between ROC GAAP and U.S. GAAP, as described in note 34 to the financial statements on 20-F.

The forward-looking statements in this release reflect the current belief of UMC as of the date of this release and UMC undertakes no obligation to update these forward-looking statements for events or circumstances that occur after such date or to reflect the occurrence of unanticipated events.

    Notes:

     (1) Unless otherwise stated, all financial figures discussed in this
         announcement are prepared in accordance with ROC GAAP, which differ
         in some material respects from generally accepted accounting
         principles in the United States.  They are unaudited, unconsolidated,
         and represent comparisons among the three-month period ending
         September 30, 2006, the three-month period ending June 30, 2006, and
         the equivalent three-month period that ended September 30, 2005.  For
         all 3Q06 results, New Taiwan Dollars (NT$) have been converted into
         U.S. Dollars at the September 30, 2006 exchange rate of NT$33.08 per
         U.S. Dollar.
     (2) Days Sales Outstanding = 365/  (Operating revenues for the three-
         month period end *4)/  (Beginning NR&AR balance, net + Ending
         NR&AR balance, net)/2
         Average Inventory Turnover = 365/ (COGS for the three-month period
         end *4)/ (Beginning Inventory balance, net + Ending Inventory
         balance, net)/2
     (3) Revenue in this section represents net wafer sales.
     (4) Revenue in this section represents net wafer sales.
     (5) 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.



                     UNITED MICROELECTRONICS CORPORATION
               Unaudited Condensed Unconsolidated Balance Sheet
                           As of September 30, 2006
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                     September 30, 2006
                                                US$          NT$          %
       ASSETS
         Current Assets
            Cash and Cash Equivalents          2,509       83,004       24.0%
            Financial assets at fair
             value through profit or
             loss, current                       263        8,689        2.5%
            Notes & Accounts Receivable          437       14,473        4.1%
            Inventories                          326       10,787        3.1%
           Other Current Assets                  126        4,156        1.2%
             Total Current Assets              3,661      121,109       34.9%

         Non-Current Assets
            Funds and Long-term
             Investments                       2,237       74,001       21.3%
            Property, Plant and Equipment      4,211      139,316       40.2%
            Intangible Assets                    122        4,024        1.2%
           Other Assets                          249        8,228        2.4%
             Total Non-Current Assets          6,819      225,569       65.1%
       TOTAL ASSETS                           10,480      346,678      100.0%

       LIABILITIES
         Current Liabilities
            Financial liabilities at fair
             value through profit or
             loss, current                        36        1,187        0.3%
            Payables                             647       21,415        6.2%
           Current Portion of Long-term
            Interest-Bearing Liabilities         314       10,394        3.0%
           Other Current Liabilities              43        1,412        0.4%
             Total Current Liabilities         1,040       34,408        9.9%

         Non-Current Liabilities
            Bonds Payable                        924       30,566        8.8%
            Other Liabilities                    110        3,646        1.1%
              Total Non-Current
               Liabilities                     1,034       34,212        9.9%
       TOTAL LIABILITIES                       2,074       68,620       19.8%

       STOCKHOLDERS' EQUITY
         Capital Stock                         5,770      190,862       55.0%
         Capital Reserve                       2,039       67,438       19.5%
         Retained Earnings, Unrealized
          Gain on Financial Assets and

          Translation Adjustment               1,486       49,153       14.2%
        Treasury Stock                          (889)     (29,395)      -8.5%
          TOTAL STOCKHOLDERS' EQUITY           8,406      278,058       80.2%
       TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY                  10,480      346,678      100.0%


       Note: New Taiwan Dollars have been translated into U.S. Dollars at the
             September 30, 2006 exchange rate of NT$33.08 per U.S. Dollar.
             All figures are in ROC GAAP.



                     UNITED MICROELECTRONICS CORPORATION
             Unaudited Condensed Unconsolidated Income Statement
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
                      Except Per Share and Per ADS Data

                                             Year over Year Comparison
                                             Three-Month Period Ended
                                        September 30,   September 30,
                                            2006            2005         %
                                         US$     NT$     US$     NT$    Chg.
    Net Sales                            842   27,852    713   23,579   18.1%
    Cost of Goods Sold                  (636) (21,038)  (624) (20,625)   2.0%
    Net Gross Profit                     206    6,814     89    2,954  130.7%
                                       24.5%    24.5%  12.5%    12.5%
    Operating Expenses
      - Sales & Marketing                 21      683     19      618   10.5%
      - General & Administrative          20      682     26      877  -22.2%
      - Research & Development            73    2,412     61    2,019   19.5%
                                         114    3,777    106    3,514    7.5%
    Operating Income (Loss)               92    3,037    (17)    (560) 642.3%
                                       10.9%    10.9%  -2.4%    -2.4%

    Net Non-Operating Income
     (Expenses)                          195    6,438     82    2,725  136.3%
    Income (Loss) from continuing
     operations before income tax        287    9,475     65    2,165  337.6%
                                       34.0%    34.0%   9.2%     9.2%

    Income Tax (Expense) Benefit         (27)    (883)    (0)      (0)     --
    Income (Loss) from continuing
     operations                          260    8,592     65    2,165  296.9%
    Cumulative effect of changes in
     accounting principles                --      --      --       --      --
    Net Income (Loss)                    260    8,592     65    2,165  296.9%
                                       30.8%    30.8%   9.2%     9.2%

    Earnings per Share                 0.015     0.48  0.003     0.11
    Earnings per ADS (2)               0.073     2.40  0.017     0.55
    Weighted Average Number of Shares
    Outstanding (in millions)                  17,542          18,671


    Note:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2006 exchange rate of NT$33.08 per U.S. Dollar.
        All figures are in ROC GAAP.
    (2) 1 ADS equals 5 common shares.



                     UNITED MICROELECTRONICS CORPORATION
             Unaudited Condensed Unconsolidated Income Statement
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
                      Except Per Share and Per ADS Data

                                          Quarter over Quarter Comparison
                                             Three-Month Period Ended
                                        September 30,       June 30,
                                            2006             2006         %
                                        US$     NT$      US$     NT$     Chg.
    Net Sales                            842   27,852    778   25,751    8.2%
    Cost of Goods Sold                  (636) (21,038)  (622) (20,580)   2.2%
    Net Gross Profit                     206    6,814    156    5,171   31.8%
                                       24.5%    24.5%  20.1%    20.1%
    Operating Expenses
      - Sales & Marketing                 21      683     23      761  -10.2%
      - General & Administrative          20      682     20      676    0.9%
      - Research & Development            73    2,412     64    2,104   14.6%
                                         114    3,777    107    3,541    6.7%
    Operating Income (Loss)               92    3,037     49    1,630   86.3%
                                       10.9%    10.9%   6.3%     6.3%

    Net Non-Operating Income
     (Expenses)                          195    6,438    154    5,076   26.8%
    Income (Loss) from continuing
     operations before income tax        287    9,475    203    6,706   41.3%
                                       34.0%    34.0%  26.0%    26.0%

    Income Tax (Expense) Benefit         (27)    (883)   (20)    (654)  35.0%
    Income (Loss) from continuing
     operations                          260    8,592    183    6,052   42.0%
    Cumulative effect of changes in
     accounting principles                --       --     --       --      --
    Net Income (Loss)                    260    8,592    183    6,052   42.0%
                                       30.8%    30.8%  23.5%    23.5%

    Earnings per Share                 0.015     0.48  0.010     0.34
    Earnings per ADS (2)               0.073     2.40  0.051     1.70
    Weighted Average Number of Shares
    Outstanding (in millions)                  17,542          17,469


    Note:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2006 exchange rate of NT$33.08 per U.S. Dollar.
        All figures are in ROC GAAP.
    (2) 1 ADS equals 5 common shares.



                     UNITED MICROELECTRONICS CORPORATION
             Unaudited Condensed Unconsolidated Income Statement
    Figures in Million 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 year Ended
                               September 30, 2006        September 30, 2006
                              US$      NT$      %      US$       NT$      %
    Net Sales                 842    27,852  100.0%   2,358    77,987  100.0%
    Cost of Goods Sold       (636)  (21,038) -75.5%  (1,897)  (62,747) -80.5%
    Net Gross Profit          206     6,814   24.5%     461    15,240   19.5%

    Operating Expenses
      - Sales & Marketing      21       683    2.5%      62     2,056    2.6%
      - General &
       Administrative          20       682    2.4%      57     1,890    2.4%
      - Research &
       Development             73     2,412    8.7%     198     6,542    8.4%
                              114     3,777   13.6%     317    10,488   13.4%
    Operating Income (Loss)    92     3,037   10.9%     144     4,752    6.1%

    Net Non-Operating
     Income (Expenses)        195     6,438   23.1%     774    25,604   32.8%
    Income (Loss) from
     continuing operations
     before income tax        287     9,475   34.0%     918    30,356   38.9%

    Income Tax (Expense)
     Benefit                  (27)     (883)  -3.2%     (68)   (2,237)  -2.9%
    Income (Loss) from
     continuing operations    260     8,592   30.8%     850    28,119   36.0%
    Cumulative effect of
     changes in accounting
     principles                --        --     --      (36)   (1,189)  -1.5%
    Net Income (Loss)         260     8,592   30.8%     814    26,930   34.5%

    Earnings per Share      0.015      0.48           0.045      1.48
    Earnings per ADS (2)    0.073      2.40           0.224      7.40
    Weighted Average Number
     of Shares Outstanding
     (in millions)                   17,542                    18,159


    Note:
    (1) New Taiwan Dollars have been translated into U.S. Dollars at the
        September 30, 2006 exchange rate of NT$33.08 per U.S. Dollar.
        All figures are in ROC GAAP.
    (2) 1 ADS equals 5 common shares.



                     UNITED MICROELECTRONICS CORPORATION
          Unaudited Condensed Unconsolidated Statement of Cash Flows
                 For The Nine Months Ended September 30, 2006
    Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

                                                       US$                NT$
    Cash flows from operating activities:
        Net Income                                     814             26,930
        Depreciation & Amortization                  1,037             34,290
        Bed debts expenses                               1                 22
        Decline in market value and
         obsolescence of inventories                    13                426
        Long-term investment income
         accounted for under the equity
         method                                        (42)            (1,403)
        Cash dividends received under the
         equity method                                  32              1,076
        Loss on valuation of financial
         assets and liabilities                         50              1,658
        Impairment loss                                  1                 22
        Gain on disposal of investments               (698)           (23,074)
        Gain on disposal of property,
         plant and equipment                            (3)              (102)
        Exchange gain on financial assets
         and liabilities                                (0)                (5)
        Exchange loss on long-term
         liabilities                                     3                117
        Bond discount amortization                       2                 72
        Amortization of deferred grant
         income                                         (2)               (63)
        Change in working capital &
         others                                       (249)            (8,241)
        Net cash provided from operating
         activities                                    959             31,725

    Cash flows from investing activities:
        Acquisition of available- for-
         sales financial assets                         (9)              (297)
        Proceed from sale of available-
         for-sales financial assets                    337             11,135
        Proceed from sale of financial
         assets measured at cost                         1                 31
        Acquisition of long-term
         investments accounted for the
         equity method                                (172)            (5,687)
        Proceed from sale of long-term
         investments accounted for the
         equity method                                 236              7,801
        Acquisition of property, plant
         and equipment                                (566)           (18,719)
        Proceeds from disposal of
         property, plant and equipment                   7                238
        Decrease in other assets -
         others, net                                     2                 72
        Increase in deferred charges                   (26)              (861)
        Net cash used in investing
         activities                                   (190)            (6,287)

    Cash flows from financing activities:
        Redemption of bonds                           (159)            (5,250)
        Cash dividend                                 (216)            (7,156)
        Employee Bonus                                  (9)              (306)
        Remuneration to directors and
         supervisors                                    (0)                (6)
        Employee stock option                           30                999
        Treasury stock                                (825)           (27,286)
        Decrease in deposits-in                         (0)                (4)
        Net cash used in financing
         activities                                 (1,179)           (39,009)

    Effect of exchange rate on cash and
     cash equivalents                                   (1)               (22)
    Net decrease in cash and cash
     equivalents                                      (411)           (13,593)

    Cash and cash equivalents at
     beginning of period                             2,920             96,597

    Cash and cash equivalents at end of
     period                                          2,509             83,004


    Note: New Taiwan Dollars have been translated into U.S. Dollars at the
          September 30, 2006 exchange rate of NT$ 33.08 per U.S. Dollar.
          All figures are in ROC GAAP.



    Contacts:

    Chitung Liu / Bowen Huang / Dylan Lee
    UMC, Investor Relations
    Tel:   +886-2-2700-6999 ext. 6957
    Email: 
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Web site: http://www.umc.com//