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UMC Reports Fourth Quarter 2011 Results

United Microelectronics Corporation
2012-02-08 14:53 1461

Emerging signs of cycle bottoming; aggressively establishing advanced capacity


TAIPEI, Feb. 8, 2012 /PRNewswire-Asia/ --

Fourth Quarter 2011 Overview (Note 1):

  • Revenue: decreased 3.0% QoQ to NT$24.43 billion (US$ 807.34 million)
  • Gross margin: 18.6%; operating margin: 3.4%
  • Capacity utilization: 68%
  • Net income: NT$1.18 billion (US$ 39million)
  • Earnings per share: NT$0.09; earnings per ADS: US$0.02

Note 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 un-audited, unconsolidated, and represent comparisons among the three-month period ending Dec 31, 2011, the three-month period ending Sep 30, 2011, and the equivalent three-month period that ended Dec 31, 2010. For all 4Q11 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Dec 31, 2011 exchange rate of NT$30.26 per U.S. Dollar.

 		  
   
United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the fourth quarter of 2011.

Revenue was NT$24.43 billion, a 3% quarter-over-quarter decrease from NT$25.19 billion in 3Q11, and a 22% year-over-year decrease from NT$31.32 billion in 4Q10. Gross margin was 18.6%, operating margin was 3.4%, net income was NT$1.18 billion, and earnings per ordinary share were NT$0.09. In 2011, revenue for the full year was NT$105.88 billion, with NT$10.14 billion operating income, NT$10.81 billion net income and NT$0.86 earnings per share.

Dr. Shih-Wei Sun, CEO of UMC, said: "In Q4 2011, revenue was in line with UMC's guidance, with a 10% decrease in quarterly shipments contributing to revenue decline. We shipped 915 thousand 8-inch equivalent wafers, with ASP increasing 5% in NT$. Overall utilization was 68%. Revenue from 40nm exceeded 10% of December monthly sales, bringing revenue contribution from this node to 8% for the fourth quarter."

Dr. Sun continued, "Since the first quarter of the year is traditionally slow, UMC's quarterly revenue will decrease slightly from the previous quarter. However, we expect to maintain operating profitability through continuous cost reduction and efficiency enhancement measures. During the slow period, our operating profitability has gained resilience and stability as a result of successful efforts to improve operating structure and diversify risk. From a market standpoint, we have observed several signs that the industry cycle is reaching the bottom and believe that the multi-quarter inventory correction will end soon. However, due to several remaining uncertainties, recovery momentum will be determined by macroeconomic conditions and the strength of end demand.

"UMC is optimistic about the demand for advanced mobile communication and computing chips. To capitalize on this opportunity, we will expand our comprehensive 28nm and 40nm foundry solutions, cooperate with top tier customers to gain more flagship products, and build sufficient capacity. Our 2012 CAPEX budget of US$2 billion will help fulfill this commitment. However, we will not blindly add capacity. Instead, our investment plan is based on progressive stages of both advanced technology readiness and customer capacity requirements. Due to promising 28nm engagements and strong demand, we believe UMC will be well rewarded when 28nm mass production begins. As for 2.5D interposer solution, we have successfully taped out 2.5D interposer for 28nm and 40nm customers. We have also developed an open platform with back-end OSAT partners to extend our foundry services. For 2012, UMC will put forth great effort to strengthen long-term partnerships with customers, provide competitive advanced technology and commit sufficient capacity to secure the next opportunity for growth."

Summary of Operating Results

Operating Results

 		  

(Amount: NT$ million)

 

4Q11

 

3Q11

 

QoQ %
change

 

4Q10

 

YoY %
change

 		  

Revenue

 

24,425

 

25,187

 

(3.0)

 

31,319

 

(22.0)

 		  

Gross Profit

 

4,550

 

4,984

 

(8.7)

 

10,052

 

(54.7)

 		  

Operating Expenses

 

(3,710)

 

(3,449)

 

7.6

 

(3,452)

 

7.5

 		  

Operating Income

 

840

 

1,535

 

(45.3)

 

6,600

 

(87.3)

 		  

Non-Operating Income

 

349

 

445

 

(21.6)

 

426

 

(18.1)

 		  

Net Income

 

1,180

 

1,954

 

(39.6)

 

6,424

 

(81.6)

 		  

EPS  

 

(NT$ per share)

 

0.09

 

0.16

 
 

0.51

 

 		  

 

(US$ per ADS)

 

0.015

 

0.026

 
 

0.084

 

 		  

 		  
             
Revenue decreased 3.0% QoQ to NT$24.43 billion from NT$25.19 billion in 3Q11, and decreased 22.0% YoY from NT$31.32 billion in 4Q10. Gross profit was NT$4.55 billion, or 18.6% of revenue, compared to NT$4.98 billion, or 19.8% of 3Q11 revenue. Operating income for the quarter was NT$0.84 billion, or 3.4% of revenue, compared to NT$1.54 billion, or 6.1% of 3Q11 revenue. The QoQ decrease in revenue mainly came from the lower shipment volume. Net income in 4Q11 was NT$1.18 billion, compared to NT$1.95 billion in 3Q11.

Earnings per ordinary share for the quarter were NT$0.09. Earnings per ADS (Note 2) were US$0.02. The basic weighted average number of outstanding shares in 4Q11 was 12,609,375,064, compared with 12,606,278,572 shares in 3Q11 and 12,450,619,954 shares in 4Q10. The diluted weighted average number of outstanding shares was 13,320,772,626 in 4Q11, compared with 13,378,728,208 shares in 3Q11 and 12,576,463,301 shares in 4Q10. The fully diluted share count on December 31, 2011 was approximately 14,260,187,000. On December 31, 2011, UMC held 458 million treasury shares acquired from the 13th and 14th share buy-back programs.


 		  

Note 2:

 

One ADS represents five Taiwan-listed ordinary shares.

 		  

 		  
   

Detailed Financials Section



COGS & Expenses

 		  

(Amount: NT$ million)

 

4Q11

 

3Q11

 

QoQ %
change

 

4Q10

 

YoY %
change

 		  

Revenue

 

24,425

 

25,187

 

(3.0)

 

31,319

 

(22.0)

 		  

COGS

 

(19,875)

 

(20,203)

 

(1.6)

 

(21,267)

 

(6.5)

 		  

 

Depreciation

 

(6,800)

 

(6,622)

 

2.7

 

(5,879)

 

15.7

 		  

 

Other Mfg. Costs

 

(13,075)

 

(13,581)

 

(3.7)

 

(15,388)

 

(15.0)

 		  

Gross Profit

 

4,550

 

4,984

 

(8.7)

 

10,052

 

(54.7)

 		  

Gross Margin (%)

 

18.6%

 

19.8%

 
 

32.1%

 
 		  

Total Operating Exp.

 

(3,710)

 

(3,449)

 

7.6

 

(3,452)

 

7.5

 		  

 

G&A

 

(601)

 

(630)

 

(4.6)

 

(732)

 

(17.9)

 		  

 

Sales & Marketing

 

(822)

 

(535)

 

53.6

 

(486)

 

69.1

 		  

 

R&D

 

(2,287)

 

(2,284)

 

0.1

 

(2,234)

 

2.4

 		  

Operating Income

 

840

 

1,535

 

(45.3)

 

6,600

 

(87.3)

 		  

 		  
             

Revenue decreased 3.0% QoQ to NT$24.43 billion from NT$25.19 billion in 3Q11 due to reduced shipment volume. Gross profit was NT$4.55 billion, or 18.6% of revenue, compared to NT$4.98 billion, or 19.8% of 3Q11 revenue. Total operating expenses increased 7.6% to NT$3.71 billion mainly due to higher sales and marketing expenses as a result of bad debt accrual from customers. The total R&D expense was 9.4% of revenue in 4Q11.


Non-Operating Income (Expenses)

 		  

(Amount: NT$ million)

 

4Q11

 

3Q11

 

4Q10

 		  

Net Non-Operating Income

 

349

 

445

 

426

 		  

 Net Interest Income

 

(7)

 

1

 

28

 		  

 Net Investment Income (Loss)

 

(1,285)

 

(473)

 

(147)

 		  

 Gain (Loss) on Disposal of Investment

 

2

 

(22)

 

432

 		  

 Exchange Gain (Loss)

 

45

 

169

 

34

 		  

 Other Gain (Loss)

 

1,594

 

770

 

79

 		  

 		  
       

Net non-operating income during 4Q11 decreased QoQ to NT$349 million. Net investment loss can be attributed to investment loss accounted for under the equity method. The increase of the gain from other items was mainly due to the raising of valuation gain from embedded options of exchangeable bonds and the donation income from the shares of Best Elite, Hejian's shareholder.


Cash Flow Summary

 		  

(Amount: NT$ million)

 

For the 3-Month
Period Ended
Dec. 31, 2011

 

For the 3-Month
Period Ended
Sep. 30, 2011

 		  

Cash Flow from Operations

 

10,972

 

10,985

 		  

 Net Income

 

1,180

 

1,954

 		  

 Depreciation & Amortization

 

7,919

 

7,675

 		  

 Changes in Working Capital

 

1,298

 

(669)

 		  

 Other

 

575

 

2,025

 		  

Cash Flow from Investing

 

(16,674)

 

(10,559)

 		  

 Capital Expenditures

 

(12,857)

 

(10,531)

 		  

 Acquisition of Long-term Investments

 

(3,842)

 

-

 		  

 Other

 

25

 

(28)

 		  

Cash Flow from Financing

 

3,091

 

(13,006)

 		  

 Bank Loans

 

3,909

 

1,763

 		  

 Cash Dividends

 

-

 

(14,034)

 		  

 Reacquisition of ECB

 

(921)

 

(804)

 		  

 Other

 

103

 

69

 		  

Effect of Exchange Rate

 

(28)

 

665

 		  

Net Cash Flow

 

(2,639)

 

(11,915)

 		  

 		  
     

Operating cash inflow was NT$10.97 billion. Free cash flow for 4Q11 was negative NT$1.89 billion, as CAPEX spending for the quarter was NT$12.86 billion. The NT $3.09 billion of financing cash inflow was mainly from the increase of bank loans. Net cash outflow was NT$2.64 billion in 4Q11.


Current Assets

 		  

(Amount: NT$ billion)

 

4Q11

 

3Q11

 

4Q10

 		  

Cash & Cash Equivalents

 

30.83

 

33.47

 

32.93

 		  

Notes & Accounts Receivable

 

12.50

 

13.99

 

16.50

 		  

 Days Sales Outstanding

 

49

 

53

 

51

 		  

Inventories

 

10.48

 

11.35

 

11.20

 		  

 Avg. Inventory Turnover

 

51

 

52

 

48

 		  

Total Current Assets

 

60.77

 

66.80

 

70.54

 		  

 		  
       
Cash and cash equivalents decreased to NT$30.83 billion due to CAPEX spending and acquisition of Long-term Investments.

Liabilities

 		  

(Amount: NT$ billion)

 

4Q11

 

3Q11

 

4Q10

 		  

Total Current Liabilities

 

31.75

 

28.16

 

39.64

 		  

 Accounts Payable

 

4.00

 

4.94

 

5.76

 		  

 Short-Term Credit / Bonds

 

10.43

 

7.35

 

7.98

 		  

 Payable on Equipment

 

6.72

 

4.72

 

11.26

 		  

 Other

 

10.60

 

11.15

 

14.64

 		  

Long-Term Liabilities

 

15.20

 

15.28

 

0.90

 		  

Total Liabilities

 

50.56

 

46.96

 

44.02

 		  

Debt to Equity

 

24%

 

22%

 

20%

 		  

 		  
       
Current liabilities increased to NT$31.75 billion, mainly due to the increasing of Short-Term Credit. Total liabilities increased to NT$50.56 billion in 4Q11. UMC's debt to equity ratio increased to 24%.

Analysis of Revenue (Note 3)

Note 3:

 

Revenue in this section represents wafer sales.

 		  
   

Revenue Breakdown by Region

 		  

Region

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

North America

 

47%

 

48%

 

49%

 

51%

 

53%

 		  

Asia Pacific

 

43%

 

40%

 

39%

 

35%

 

30%

 		  

Europe

 

9%

 

11%

 

11%

 

13%

 

16%

 		  

Japan

 

1%

 

1%

 

1%

 

1%

 

1%

 		  

 		  
           

Revenue from Asia Pacific contributed to 43% of UMC's Q4 revenue, due to the relative strength of communication customers in Asia Pacific.


Revenue Breakdown by Geometry

 		  

Geometry

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

40nm and below

 

8%

 

6%

 

6%

 

6%

 

5%

 		  

40nm<x<=65nm

 

41%

 

34%

 

31%

 

29%

 

30%

 		  

65nm<x<=90nm

 

6%

 

8%

 

13%

 

15%

 

16%

 		  

90nm<x<=0.13um

 

23%

 

24%

 

24%

 

23%

 

20%

 		  

0.13um<x<=0.18um

 

10%

 

13%

 

12%

 

13%

 

14%

 		  

0.18um<x<=0.35um

 

9%

 

11%

 

9%

 

9%

 

10%

 		  

0.5um and above

 

3%

 

4%

 

5%

 

5%

 

5%

 		  

 		  
           

Revenue from 65nm and below accounted for 49% of total revenue, with 40nm accounting for 8% of UMC's Q4 revenue contribution as advanced process nodes demand increased.


Revenue Breakdown by Customer Type

 		  

Customer Type

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

Fabless

 

79%

 

76%

 

73%

 

72%

 

73%

 		  

IDM

 

21%

 

24%

 

27%

 

28%

 

27%

 		  

 		  
           

The percentage of revenue from Fabless customers increased from 76% to 79% in 4Q11.


Revenue Breakdown by Application(1)

 		  

Application

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

Computer

 

14%

 

17%

 

15%

 

14%

 

11%

 		  

Communication

 

60%

 

53%

 

53%

 

57%

 

56%

 		  

Consumer

 

23%

 

27%

 

29%

 

26%

 

30%

 		  

Memory

 

1%

 

1%

 

1%

 

1%

 

1%

 		  

Others

 

2%

 

2%

 

2%

 

2%

 

2%

 		  

 		  
           
Revenue from the Communication sector grew to 60% of total 4Q11 revenue as relatively stronger demand from baseband and AP. Weak LCD and power IC related demand resulted in decreased Consumer sector revenue contribution in Q4.

Blended Average Selling Price Trend

The blended average selling price (ASP) increased during 4Q11 was mainly due to increasing revenue contribution from 40nm and 65nm.

(To view ASP trend, visit http://www.umc.com/english/investors/4Q11_ASP_trend.asp.)

Shipment and Utilization Rate (Note 4)

Wafer Shipments

 		  

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

Wafer Shipments
(8" K equivalents)

 

915

 

1,025

 

1,145

 

1,120

 

1,132

 		  

 		  
           

Quarterly Capacity Utilization Rate

 		  

 

4Q11

 

3Q11

 

2Q11

 

1Q11

 

4Q10

 		  

Utilization Rate

 

68%

 

74%

 

87%

 

90%

 

94%

 		  

Total Capacity
(8" K equivalents)

 

1,376

 

1,358

 

1,330

 

1,259

 

1,234

 		  

 		  
           

Wafer shipments decreased 10.7% sequentially to 915K in 4Q11, compared to 1,025K 8-inch equivalent wafers shipped in 3Q11. Since wafer shipments decrease and wafer capacity increased in Q4, overall utilization rate for the quarter dropped to 68%.


Note 4:

 

Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

 		  
   
Capacity (Note 5)

Capacity during the fourth quarter was 1,376K 8-inch equivalent wafers. The increase in total capacity is mainly due to advanced capacity expansion at 12" fabs. The estimated installed capacity in 1Q12 will decrease to 1,364K 8-inch equivalent wafers mainly due to fewer working days.

Annual Capacity in

thousands of 8-inch wafer equivalents

 		  

FAB

 

Geometry
(um)

 

2011

 

2010

 

2009

 

2008

 		  

Fab6A

 

6"

 

3.5 – 0.45

 

303

 

331

 

328

 

328

 		  

Fab8A

 

8"

 

0.5 – 0.25

 

813

 

816

 

816

 

816

 		  

Fab8C

 

8"

 

0.35 – 0.11

 

359

 

366

 

405

 

417

 		  

Fab8D

 

8"

 

0.13 – 0.09

 

364

 

314

 

267

 

257

 		  

Fab8E

 

8"

 

0.5 – 0.18

 

469

 

410

 

408

 

408

 		  

Fab8F

 

8"

 

0.18 – 0.11

 

388

 

388

 

381

 

372

 		  

Fab8S

 

8"

 

0.18 – 0.11

 

307

 

304

 

300

 

291

 		  

Fab12A

 

12"

 

0.18 – 0.040

 

1,128

 

841

 

866

 

876

 		  

Fab12i

 

12"

 

0.13 – 0.065

 

1,192

 

1,021

 

815

 

742

 		  

Total(1)

 

5,323

 

4,791

 

4,586

 

4,507

 		  

YoY Growth Rate

 

11%

 

4%

 

2%

 

5%

 		  

(1)One 6-inch wafer is converted into 0.5625(6 square/8 square) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12 square/8 square) 8-inch equivalent wafers.

 		  
             

Quarterly Capacity in

thousands of 8-inch wafer equivalents

 		  

FAB

 

1Q12E

 

4Q11

 

3Q11

 

2Q11

 		  

Fab6A

 

69

 

76

 

76

 

76

 		  

Fab8A

 

203

 

204

 

204

 

204

 		  

Fab8C

 

89

 

90

 

90

 

90

 		  

Fab8D

 

92

 

93

 

93

 

93

 		  

Fab8E

 

112

 

118

 

119

 

119

 		  

Fab8F

 

97

 

98

 

98

 

98

 		  

Fab8S

 

86

 

79

 

77

 

77

 		  

Fab12A

 

315

 

316

 

300

 

278

 		  

Fab12i

 

301

 

302

 

302

 

296

 		  

Total

 

1,364

 

1,376

 

1,358

 

1,330

 		  

 		  
         

   

Note 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.

 		  

 		  
   
CAPEX

UMC Capital Expenditure by Year - in US$ billion

 		  

Year

 

2011

 

2010

 

2009

 

2008

 

2007

 		  

CAPEX

 

$ 1.6

 

$ 1.8

 

$ 0.55

 

$ 0.35

 

$ 0.9

 		  

 		  
           

2012 CAPEX Plan

 		  

 

8"

 

12"

 

Total

 		  

UMC

 

3%

 

97%

 

Approximately

US$2 billion

 		  

 		  
       
The total capital expenditure for 2011 was US$1.6 billion. The capital expenditure budget for 2012 is expected to be approximately US$2 billion. 97% of the amount will be used for 12" advanced capacity expansion.

Brief Summary of Full Year 2011 Results

Operating Results

 		  

(Amount: NT$ million)

 

2011

 

2010

 

YoY %
change

 		  

Revenue

 

105,880

 

120,431

 

(12.1)

 		  

Gross Profit

 

23,995

 

36,064

 

(33.5)

 		  

Operating Expenses

 

(13,857)

 

(13,436)

 

3.1

 		  

Operating Income

 

10,138

 

22,628

 

(55.2)

 		  

Non-Operating Income

 

1,428

 

2,759

 

(48.2)

 		  

Income Tax Expenses

 

(756)

 

(1,488)

 

(49.2)

 		  

Net Income

 

10,810

 

23,899

 

(54.8)

 		  

EPS  

 

(NT$ per share)

 

0.86

 

1.91

 
 		  

 

(US$ per ADS)

 

0.142

 

0.316

 
 		  

 		  
         
  • Revenue decreased 12.1% YoY to NT$105.88 billion, from NT$120.43 billion in 2010
  • Gross margin was 22.7%, compared to 29.9% in 2010
  • Operating margin was 9.6%, compared to 18.8% in 2010
  • Net income was NT$10.81 billion for 2011
  • EPS was NT$0.86, or EPADS was US$0.142 for 2011, compared to EPS of NT$1.91 or EPADS of US$0.316 for 2010
  • The percentage of revenue from 65nm and below technologies increased from 27% in 2010 to 39% in 2011
Annual Sales Breakdown in Revenue

 		  

Region

 

2011

 

2010

 		  

North America

 

49%

 

48%

 		  

Asia Pacific

 

39%

 

38%

 		  

Europe

 

11%

 

13%

 		  

Japan

 

1%

 

1%

 		  

 		  
     


 		  

Technology

 

2011

 

2010

 		  

65nm and below

 

39%

 

27%

 		  

65nm<x<=90nm

 

11%

 

17%

 		  

90nm<x<=0.13um

 

24%

 

23%

 		  

0.13um<x<=0.18um

 

12%

 

16%

 		  

0.18um<x<=0.35um

 

9%

 

12%

 		  

0.5um and above

 

5%

 

5%

 		  

 		  
     


 		  

Customer Type

 

2011

 

2010

 		  

Fabless

 

75%

 

78%

 		  

IDM

 

25%

 

22%

 		  

 		  
     


 		  

Application

 

2011

 

2010

 		  

Computer

 

15%

 

12%

 		  

Communication

 

55%

 

55%

 		  

Consumer

 

27%

 

30%

 		  

Memory

 

1%

 

1%

 		  

Others

 

2%

 

2%

 		  

 		  
     
Recent Developments / Announcements


 		  

Feb. 1, 2012

 

Faraday and UMC Strengthen IP Alliance for Advanced Nodes

 		  

Dec. 29, 2011

 

UMC Pushes 8" Manufacturing Limit with A+ Technology Solution

 		  

Nov. 30, 2011

 

Kilopass and UMC Sign Long Term Technology Roadmap Agreement

 		  

Nov. 16, 2011

 

UMC Receives Excellence in CSR Award from TWSE

 		  

Oct. 31, 2011

 

UMC Receives Government Approval to Acquire Stakes in He Jian

 		  

 		  
   
Please visit UMC's website for further details regarding the above announcements

First Quarter of 2012 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Wafer shipment: Increase marginally
  • Wafer ASP in US$: Decrease approximately 5%
  • Operating Margin: Low single-digit percentage range
  • Capacity utilization: High 60% range
  • Segments: Consumer and computer segments will outpace communication segment
  • 2012 CAPEX budget: Approximately US$2 billion
Conference Call / Webcast Announcement

Wednesday, February 8, 2012

Time:

 

9:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)

 		  
   
Dial-in numbers and Access Codes:

USA Toll Free:

 

1866 519 4004

 		  

UK Toll Free:

 

0808 234 6646

 		  

Singapore and Other Areas:

 

+65 6723 9381

 		  

 
 		  

Access Code:

 

UMC

 		  
   
A live webcast and replay of the 4Q11 results announcement will be available at www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced technology and manufacturing services for applications spanning every major sector of the IC industry. UMC's customer-driven foundry solutions allow chip designers to leverage the strength of the company's leading-edge processes, which include production proven 65nm, 45/40nm, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab12A in Taiwan and Singapore-based Fab12i are both in volume production for a variety of customer products. The company employs approximately 13,000 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web at http://www.umc.com.

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward looking within the meaning of the U.S. Federal Securities laws, including statements about future outsourcing, wafer capacity, technologies, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information concerning these risks is included in UMC's filings with the U.S. SEC, including on Form F-1, F-3, F-6 and 20-F, each as amended.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

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, but not limited to: (i) our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international global business activities; (iv) our dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3, F-6 and 20-F, in each case as amended. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

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 US GAAP.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION

 		  

Condensed Unconsolidated Balance Sheet

 		  

As of December 31, 2011

 		  

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

 		  

 
 
 
 
 
 		  

 
 
 
 
 
 		  

 

December  31, 2011

 		  

 

US$

 
 

NT$

 
 

%

 		  

ASSETS

 
 
 
 
 
 		  

Current Assets

 
 
 
 
 
 		  

Cash and Cash Equivalents

 

1,019

 
 

30,829

 
 

11.9%

 		  

Financial Assets at Fair Value through Profit or Loss, current

 

23

 
 

696

 
 

0.3%

 		  

Available-for-Sale Financial Assets, current

 

169

 
 

5,125

 
 

2.0%

 		  

Notes & Accounts Receivable, net

 

413

 
 

12,502

 
 

4.8%

 		  

Inventories, net

 

346

 
 

10,479

 
 

4.1%

 		  

Other Current Assets

 

38

 
 

1,134

 
 

0.4%

 		  

   Total Current Assets

 

2,008

 
 

60,765

 
 

23.5%

 		  

 
 
 
 
 
 		  

Non-Current Assets

 
 
 
 
 
 		  

Funds and Investments

 

1,985

 
 

60,076

 
 

23.2%

 		  

Property, Plant and Equipment, net

 

4,328

 
 

130,951

 
 

50.7%

 		  

Other Assets

 

221

 
 

6,701

 
 

2.6%

 		  

   Total Non-Current Assets

 

6,534

 
 

197,728

 
 

76.5%

 		  

TOTAL ASSETS

 

8,542

 
 

258,493

 
 

100.0%

 		  

 
 
 
 
 
 		  

LIABILITIES

 
 
 
 
 
 		  

Current Liabilities

 
 
 
 
 
 		  

Short-term Loans

 

150

 
 

4,547

 
 

1.8%

 		  

Financial Liabilities at Fair Value through Profit or Loss, current

 

25

 
 

742

 
 

0.3%

 		  

Payables

 

665

 
 

20,123

 
 

7.8%

 		  

Current Portion of Long-term Liabilities

 

194

 
 

5,881

 
 

2.3%

 		  

Other Current Liabilities

 

15

 
 

456

 
 

0.1%

 		  

   Total Current Liabilities

 

1,049

 
 

31,749

 
 

12.3%

 		  

 
 
 
 
 
 		  

Non-Current Liabilities

 
 
 
 
 
 		  

Bonds Payable

 

396

 
 

11,984

 
 

4.6%

 		  

Long-term Loans

 

106

 
 

3,219

 
 

1.2%

 		  

Other Liabilities

 

120

 
 

3,604

 
 

1.5%

 		  

   Total Non-Current Liabilities

 

622

 
 

18,807

 
 

7.3%

 		  

TOTAL LIABILITIES

 

1,671

 
 

50,556

 
 

19.6%

 		  

 
 
 
 
 
 		  

STOCKHOLDERS' EQUITY

 
 
 
 
 
 		  

Capital Stock

 

4,324

 
 

130,845

 
 

50.6%

 		  

Additional Paid-in Capital

 

1,535

 
 

46,461

 
 

18.0%

 		  

Retained Earnings, Unrealized Gain or Loss on Financial
    Instruments and Cumulative Translation Adjustment

 

1,218

 
 

36,854

 
 

14.2%

 		  

Treasury Stock

 

(206)

 
 

(6,223)

 
 

(2.4%)

 		  

TOTAL STOCKHOLDERS' EQUITY

 

6,871

 
 

207,937

 
 

80.4%

 		  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

8,542

 
 

258,493

 
 

100.0%

 		  

 		  
           



UNITED MICROELECTRONICS CORPORATION

 		  

Condensed Unconsolidated Income Statement

 		  

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

 		  

Except Per Share and Per ADS Data

 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

 

Year over Year Comparison

 
 

Quarter over Quarter Comparison

 		  

 

Three-Month Period Ended

 
 
 

Three-Month Period Ended

 
 		  

 

December 31, 2011

 
 

December 31, 2010

 
 

%

 
 

December 31, 2011

 
 

September 30, 2011

 
 

%

 		  

 

US$

 
 

NT$

 
 

US$

 
 

NT$

 
 

Chg.

 
 

US$

 
 

NT$

 
 

US$

 
 

NT$

 
 

Chg.

 		  

Net Sales

 

807

 
 

24,425

 
 

1,035

 
 

31,319

 
 

(22.0%)

 
 

807

 
 

24,425

 
 

832

 
 

25,187

 
 

(3.0%)

 		  

Cost of Goods Sold

 

(657)

 
 

(19,875)

 
 

(703)

 
 

(21,267)

 
 

(6.5%)

 
 

(657)

 
 

(19,875)

 
 

(667)

 
 

(20,203)

 
 

(1.6%)

 		  

Net Gross Profit

 

150

 
 

4,550

 
 

332

 
 

10,052

 
 

(54.7%)

 
 

150

 
 

4,550

 
 

165

 
 

4,984

 
 

(8.7%)

 		  

 

18.6%

 
 

18.6%

 
 

32.1%

 
 

32.1%

 
 
 
 

18.6%

 
 

18.6%

 
 

19.8%

 
 

19.8%

 
 
 		  

Operating Expenses

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

 - Sales & Marketing

 

(27)

 
 

(822)

 
 

(16)

 
 

(486)

 
 

69.1%

 
 

(27)

 
 

(822)

 
 

(18)

 
 

(535)

 
 

53.6%

 		  

 - General & Administrative

 

(20)

 
 

(601)

 
 

(24)

 
 

(732)

 
 

(17.9%)

 
 

(20)

 
 

(601)

 
 

(21)

 
 

(630)

 
 

(4.6%)

 		  

 - Research & Development

 

(75)

 
 

(2,287)

 
 

(74)

 
 

(2,234)

 
 

2.4%

 
 

(75)

 
 

(2,287)

 
 

(75)

 
 

(2,284)

 
 

0.1%

 		  

 

(122)

 
 

(3,710)

 
 

(114)

 
 

(3,452)

 
 

7.5%

 
 

(122)

 
 

(3,710)

 
 

(114)

 
 

(3,449)

 
 

7.6%

 		  

Operating Income

 

28

 
 

840

 
 

218

 
 

6,600

 
 

(87.3%)

 
 

28

 
 

840

 
 

51

 
 

1,535

 
 

(45.3%)

 		  

 

3.4%

 
 

3.4%

 
 

21.1%

 
 

21.1%

 
 
 
 

3.4%

 
 

3.4%

 
 

6.1%

 
 

6.1%

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

Net Non-Operating Income

 

11

 
 

349

 
 

14

 
 

426

 
 

(18.1%)

 
 

11

 
 

349

 
 

14

 
 

445

 
 

(21.6%)

 		  

Income from Continuing Operations before Income Tax

 

39

 
 

1,189

 
 

232

 
 

7,026

 
 

(83.1%)

 
 

39

 
 

1,189

 
 

65

 
 

1,980

 
 

(39.9%)

 		  

 

4.9%

 
 

4.9%

 
 

22.4%

 
 

22.4%

 
 
 
 

4.9%

 
 

4.9%

 
 

7.9%

 
 

7.9%

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

Income Tax Expense

 

(0)

 
 

(9)

 
 

(20)

 
 

(602)

 
 

(98.5%)

 
 

(0)

 
 

(9)

 
 

(0)

 
 

(26)

 
 

(65.4%)

 		  

Net Income

 

39

 
 

1,180

 
 

212

 
 

6,424

 
 

(81.6%)

 
 

39

 
 

1,180

 
 

65

 
 

1,954

 
 

(39.6%)

 		  

 

4.8%

 
 

4.8%

 
 

20.5%

 
 

20.5%

 
 
 
 

4.8%

 
 

4.8%

 
 

7.8%

 
 

7.8%

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

Earnings per Share

 

0.003

 
 

0.09

 
 

0.017

 
 

0.52

 
 
 
 

0.003

 
 

0.09

 
 

0.005

 
 

0.16

 
 
 		  

Earnings per ADS(2)

 

0.015

 
 

0.45

 
 

0.086

 
 

2.60

 
 
 
 

0.015

 
 

0.45

 
 

0.026

 
 

0.80

 
 
 		  

Weighted Average Number of Shares

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

 Outstanding (in millions)

 
 
 

12,609

 
 
 
 

12,451

 
 
 
 
 
 

12,609

 
 
 
 

12,606

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 		  

Note:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2011 exchange rate of NT $30.26 per U.S. Dollar. All figures are in ROC GAAP.

(2) 1 ADS equals 5 common shares.

 		  
                                                                       



UNITED MICROELECTRONICS CORPORATION

 		  

Condensed Unconsolidated Income Statement

 		  

Figures in Millions 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 Twelve-Month Period Ended

 		  

 

December 31, 2011

 
 

December 31, 2011

 		  

 

US$

 
 

NT$

 
 

%

 
 

US$

 
 

NT$

 
 

%

 		  

Net Sales

 

807

 
 

24,425

 
 

100.0%

 
 

3,499

 
 

105,880

 
 

100.0%

 		  

Cost of Goods Sold

 

(657)

 
 

(19,875)

 
 

(81.4%)

 
 

(2,706)

 
 

(81,885)

 
 

(77.3%)

 		  

Net Gross Profit

 

150

 
 

4,550

 
 

18.6%

 
 

793

 
 

23,995

 
 

22.7%

 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Operating Expenses

 
 
 
 
 
 
 
 
 
 
 
 		  

 - Sales & Marketing

 

(27)

 
 

(822)

 
 

(3.4%)

 
 

(79)

 
 

(2,394)

 
 

(2.3%)

 		  

 - General & Administrative

 

(20)

 
 

(601)

 
 

(2.4%)

 
 

(82)

 
 

(2,487)

 
 

(2.3%)

 		  

 - Research & Development

 

(75)

 
 

(2,287)

 
 

(9.4%)

 
 

(297)

 
 

(8,976)

 
 

(8.5%)

 		  

 

(122)

 
 

(3,710)

 
 

(15.2%)

 
 

(458)

 
 

(13,857)

 
 

(13.1%)

 		  

Operating Income

 

28

 
 

840

 
 

3.4%

 
 

335

 
 

10,138

 
 

9.6%

 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Net Non-Operating Income

 

11

 
 

349

 
 

1.5%

 
 

47

 
 

1,428

 
 

1.3%

 		  

Income from Continuing Operations before
   Income Tax

 

39

 
 

1,189

 
 

4.9%

 
 

382

 
 

11,566

 
 

10.9%

 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Income Tax Expense

 

(0)

 
 

(9)

 
 

(0.1%)

 
 

(25)

 
 

(756)

 
 

(0.7%)

 		  

Net Income

 

39

 
 

1,180

 
 

4.8%

 
 

357

 
 

10,810

 
 

10.2%

 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Earnings per Share

 

0.003

 
 

0.09

 
 
 
 

0.028

 
 

0.86

 
 
 		  

Earnings per ADS(2)

 

0.015

 
 

0.45

 
 
 
 

0.142

 
 

4.30

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Weighted Average Number of Shares
    Outstanding (in millions)

 
 
 

12,609

 
 
 
 
 
 

12,561

 
 
 		  

 
 
 
 
 
 
 
 
 
 
 
 		  

Note:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2011 exchange rate of NT $30.26 per U.S. Dollar.

    All figures are in ROC GAAP.

(2) 1 ADS equals 5 common shares.

 		  
                       



UNITED MICROELECTRONICS CORPORATION

Condensed Unconsolidated Statement of Cash Flows

For The Twelve-Month Period Ended December 31, 2011

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

 		  

 
 
 
 		  

 

USD

 
 

NTD

 		  

Cash flows from operating activities :

 
 
 
 		  

   Net Income

 

357

 
 

10,810

 		  

   Depreciation & Amortization

 

1,008

 
 

30,509

 		  

   Bad debt

 

8

 
 

248

 		  

   Donation Income

 

(23)

 
 

(692)

 		  

   Loss on decline in market value, scrap and obsolescence of inventories

 

23

 
 

687

 		  

   Cash dividends received under the equity method

 

19

 
 

585

 		  

   Investment loss accounted for under the equity method

 

105

 
 

3,182

 		  

   Gain on valuation of financial assets and liabilities

 

(34)

 
 

(1,014)

 		  

   Impairment loss

 

9

 
 

283

 		  

   Gain on disposal of investments

 

(7)

 
 

(199)

 		  

   Gain on disposal of property, plant and equipment

 

(1)

 
 

(30)

 		  

   Gain on disposal of non-current assets held for sale

 

(6)

 
 

(193)

 		  

   Exchange loss on financial assets and liabilities

 

3

 
 

79

 		  

   Exchange loss on long-term liabilities

 

6

 
 

189

 		  

   Amortization of bond discounts

 

10

 
 

300

 		  

   Gain on reacquisition of bonds

 

(6)

 
 

(167)

 		  

   Amortization of deferred income

 

(3)

 
 

(96)

 		  

   Stock-based payment

 

26

 
 

794

 		  

   Changes in assets, liabilities and others

 

(0)

 
 

(57)

 		  

Net cash provided by operating activities

 

1,494

 
 

45,218

 		  

 
 
 
 		  

Cash flows from investing activities :

 
 
 
 		  

   Proceeds from disposal of available-for-sales financial assets

 

6

 
 

174

 		  

   Acquisition of financial assets measured at cost

 

(6)

 
 

(196)

 		  

   Proceed from sale of financial assets measured at cost

 

2

 
 

52

 		  

   Acquisition of long-term investments accounted for under the equity method

 

(178)

 
 

(5,386)

 		  

   Proceeds from liquidation of long-term investments

 

4

 
 

111

 		  

   Acquisition of property, plant and equipment

 

(1,533)

 
 

(46,400)

 		  

   Proceeds from disposal of property, plant and equipment

 

1

 
 

44

 		  

   Proceeds from disposal of non-current assets held for sale

 

19

 
 

577

 		  

   Increase in deferred charges

 

(12)

 
 

(357)

 		  

   Increase in other assets - others

 

(15)

 
 

(433)

 		  

Net cash used in investing activities

 

(1,712)

 
 

(51,814)

 		  

 
 
 
 		  

Cash flows from financing activities :

 
 
 
 		  

   Increase in short-term loans

 

62

 
 

1,875

 		  

   Proceeds from long-term loans

 

93

 
 

2,800

 		  

   Repayments of long-term loans

 

(13)

 
 

(387)

 		  

   Acquisition of bonds

 

(57)

 
 

(1,726)

 		  

   Proceeds from bonds issued

 

477

 
 

14,423

 		  

   Bonds issue cost

 

(2)

 
 

(67)

 		  

   Cash dividends

 

(464)

 
 

(14,034)

 		  

   Exercise of employee stock options

 

33

 
 

1,004

 		  

   Proceeds from disposal of treasury stock

 

0

 
 

15

 		  

   Increase in deposits-in

 

3

 
 

80

 		  

Net cash provided by financing activities

 

132

 
 

3,983

 		  

 
 
 
 		  

Effect of exchange rate changes on cash and cash equivalents

 

16

 
 

507

 		  

Net increase in cash and cash equivalents

 

(70)

 
 

(2,106)

 		  

 
 
 
 		  

Cash and cash equivalents at beginning of period

 

1,089

 
 

32,935

 		  

 
 
 
 		  

Cash and cash equivalents at end of period

 

1,019

 
 

30,829

 		  

 
 
 
 		  

 
 
 
 		  

Note: New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2011 exchange rate of NT $30.26 per U.S. Dollar. All figures are in ROC GAAP.

 		  
       
Contacts:

Bowen Huang / Jason Ho
UMC, Investor Relations
+ 886-2-2658-9168, ext. 16944 / 16970
bowen_huang@umc.com / jason_ho@umc.com

Source: United Microelectronics Corporation
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