UMC Reports Fourth Quarter 2016 Results

Company to ship 14nm customer wafers amid 1Q17 seasonal adjustment

Fourth Quarter 2016 Overview1:

  • Revenue: NT$38.31 billion (US$1.19 billion)
  • Gross margin: 22.9%
  • Foundry revenue from 28nm: 22%; Foundry operating margin: 6.3%
  • Foundry capacity utilization rate: 94%
  • Net income attributable to the stockholders of the parent: NT$2.55 billion (US$79.0 million)
  • Earnings per share: NT$0.21; earnings per ADS: US$0.033

TAIPEI, Taiwan — (BUSINESS WIRE) — January 23, 2017United 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 2016.

Fourth quarter consolidated revenue was NT$38.31 billion, flat from NT$38.16 billion in 3Q16 and an increase of 13.2% YoY from NT$33.85 billion in 4Q15. 4Q16 consolidated gross margin was 22.9%. Net income attributable to the stockholders of the parent was NT$2.55 billion, with earnings per ordinary share of NT$0.21.

Mr. Po-Wen Yen, CEO of UMC, said, “In the fourth quarter of 2016, UMC’s revenue from foundry operations was NT$38.22 billion. Overall capacity utilization reached 94%, bringing wafer shipments to 1.66 million 8-inch equivalent wafers. Operating margin was 6.3%. During the quarter, our 28nm and 40nm utilization rate continued to exceed 90%, while strength in 8” consumer and communication demand raised 8” fab utilization to nearly 100%. We also realized a noteworthy milestone in November with the grand opening of our 300mm Fab 12X in Xiamen, China, which began shipping 40nm customer wafers just 20 months after the fab’s March 2015 groundbreaking. This site will ideally position UMC to capitalize on the vast business opportunities within China’s semiconductor market while bringing us closer to our Chinese customers, where our team can provide superior technical and manufacturing services and more efficiently bring new tape outs into production. With regard to our advanced 14nm technology, we have recently made substantial progress for this advanced node. Following intensive engineering activities with our customer, UMC’s 14nm transistor performance has delivered speed and leakage results which are comparable with the industry’s 14nm standards. Our yields have fulfilled customer requirements, and we anticipate 14nm wafer shipments to commence in 1Q17, highlighting our determined efforts to reach this important milestone.”

CEO Yen continued, “Looking into the first quarter of 2017, as we enter early year seasonality, we expect a sequential decrease in our foundry business. For full year 2017, UMC will continue to work towards a year of growth and prosperity. Our fundamental 28nm process technology know-how will enable our team to develop new manufacturing solutions on logic and specialty technology platforms. We will also expand 300mm capacity at Fab 12X to address growing customer wafer demand, increase our foundry market share and elevate the competitiveness of our foundry services. We believe these efforts will position UMC to capture the next wave of growth opportunities.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)   4Q16   3Q16  

QoQ %
change

  4Q15  

YoY %
change

Net Operating Revenues   38,306     38,164     0.4     33,849     13.2  
Gross Profit   8,759     8,301     5.5     6,979     25.5  
Operating Expenses   (6,627 )   (6,373 )   4.0     (5,065 )   30.8  
Net Other Operating Income and Expenses   144     (443 )   -     (34 )   -  
Operating Income   2,276     1,485     53.3     1,880     21.1  
Net Non-Operating Income and Expenses   (1,210 )   466     -     906     -  
Net Income Attributable to Stockholders of the Parent   2,548     2,975     (14.4 )   3,160     (19.4 )

EPS (NT$ per share)

  0.21     0.24         0.25      

(US$ per ADS)

  0.033     0.037         0.039      

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