UMC Reports Third Quarter 2012 Results

3Q results in line with guidance; Revenue from leading edge 40nm and specialty technologies continues to grow

(PRNewswire) —

Third Quarter 2012 Overview[1]:

  • Revenue: increased 3.3% QoQ to NT$28.53 billion (US$973.22 million)
  • Gross margin: 24%; operating margin: 12.7%
  • Capacity utilization: 84%
  • Net income: NT$2.42 billion (US$82.46 million)
  • Earnings per share: NT$0.19; earnings per ADS: US$0.032

United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the third quarter of 2012.

Revenue was NT$28.53 billion, a 3.3% quarter-over-quarter increase from NT$27.62 billion in 2Q12, and a 13.3% year-over-year increase from NT$25.19 billion in 3Q11.  Gross margin was 24%, operating margin was 12.7%, net income was NT$2.42 billion, and earnings per ordinary share were NT$ 0.19.

Dr. Shih-Wei Sun, CEO of UMC, said, "In 3Q 2012, both UMC's revenue and operating profit continued to grow.  Wafer shipments reached 1.13 million 8-inch equivalent wafers, with overall capacity utilization at 84%.  Increased 40nm revenue contribution led to higher average selling price, which contributed to 3Q revenue growth.  With the share of 40nm sales growing from 9% to 13% quarter-over-quarter due to solid 40nm chip demand, we anticipate our 15% year-end internal revenue target from 40nm to be achieved ahead of schedule.  In addition to 40nm, we are providing our customers with the most competitive and innovative embedded flash specialty technologies for the rising touch-sensor chipset market.  This platform has been successfully adopted by numerous industry leading customers with many products currently in mass production.  We are optimistic that these specialty technologies will inject UMC with new growth momentum in the coming future."

Dr. Sun continued, "28nm progress is within our expectation, with yield enhancement of design-in products continuing to improve.  For first-wave 28nm product matching business, we are seeing evident yield progression for ported ICs after adjusting our process and device parameters during recent months.  UMC also successfully taped out a mobile communication product in 3Q using our 28nm high-k/-metal-gate (gate-last) process.  We are subsequently collaborating closely with customers for their 28nm mobile communication & computing, wired & wireless connectivity, DTV, data storage controller, and programmable logic products.  Meanwhile, based on our IBM FinFET licensing, UMC has decided to aggressively develop 14nm FinFET technology on 20nm metal.  14nm FinFET will deliver the most optimal low-power and high-performance solution to offset the cost impact from using double patterning lithography."           

Dr. Sun added, "Foundry is prone to both inventory correction and industry cycles.  We expect the present inventory adjustment to continue into early next year.  The momentum of the demand recovery in 2013 will be determined by macroeconomic conditions, end demand strength and the transition progress for new products entering the market.  In the meantime, UMC will continue to enhance its customer composition and product mix, and further exercise flexible capacity deployment to accommodate evolving production requirements.  UMC is also strengthening its tailored cooperation with leading-edge and specialty technology customers for specific products and applications to provide a full-range of 'Customer-Driven Foundry Solutions.'"     

Summary of Operating Results

Operating Results

(Amount: NT$ million)

3Q12

2Q12

QoQ %
change

3Q11

YoY %
change

Revenue

28,525

27,620

3.3

25,187

13.3

Gross Profit

6,850

6,740

1.6

4,984

37.4

Operating Expenses

(3,238)

(3,558)

(9.0)

(3,449)

(6.1)

Operating Income

3,612

3,182

13.5

1,535

135.3

Non-Operating Income

83

261

(68.2)

445

(81.3)

Net Income

2,417

2,990

(19.2)

1,954

23.7

EPS   (NT$ per share)

0.19

0.24


0.16


         (US$ per ADS[2])

0.032

0.041


0.027



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