UMC Reports Fourth Quarter 2019 Results

4Q19 posts record high revenue of NT$41.85 billion; FY19 EPS up 41% YoY to NT$0.82

Fourth Quarter 2019 Overview1:

  • Revenue: NT$41.85 billion (US$1.39 billion)
  • Gross margin: 16.7%
  • Foundry revenue from 28nm: 10%; Foundry operating margin: 4.9%
  • Foundry capacity utilization rate: 92%
  • Net income attributable to stockholders of the parent: NT$3.84 billion (US$128 million)
  • Earnings per share: NT$0.33; earnings per ADS: US$0.055

TAIPEI, Taiwan — (BUSINESS WIRE) — February 5, 2020United 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 2019.

Fourth quarter consolidated revenue was NT$41.85 billion, up 10.9% QoQ from NT$37.74 billion in 3Q19 and up 17.8% YoY from NT$35.52 billion in 4Q18. Consolidated gross margin for 4Q19 was 16.7%. Net income attributable to the stockholders of the parent was NT$3.84 billion, with earnings per ordinary share of NT$0.33.

Jason Wang, co-president of UMC, said, “During the fourth quarter, we started to account for the foundry operations at our recently acquired USJC (Fab 12M) in Japan. In spite of currency headwinds encountered in the foreign exchange markets, our foundry revenue increased 10.9% QoQ to NT$41.83 billion, leading to a foundry operating margin of 4.9%. Utilization rate increased to 92%, bringing wafer shipments to 2.04 million 8-inch equivalent wafers primarily driven by the communication and computing segments. For the year, our earnings per share increased 41% YoY to NT$0.82. Our continued disciplined CAPEX approach also enabled UMC to generate a total of NT$37.1 billion in free cash flow, up 19% YoY. In terms of technology, we recently validated our 22nm process on a USB 2.0 test vehicle, demonstrating the technology readiness of this design rule shrink from 28nm. UMC’s 22nm process features a 10% area reduction, better power-to-performance ratio and enhanced RF capabilities compared to our existing 28nm High-K/Metal Gate technology.”

Co-president Wang further commented, “Looking to the first quarter of 2020, based on customer forecasts, the overall business outlook appears to remain consistent with the previous quarter, primarily due to stable wafer demand across wireless communication and computer peripheral segments. As we receive new product tape-outs that will enter future production pipelines, we expect to benefit from 5G and IoT trends that will generate additional semiconductor demand, specifically in wireless devices as well as power management applications. While our focus remains to maintain a disciplined capital expenditure spending, owing to mid to long term customer and market demand, we have setup our 2020 capex budget of US$1 billion. In the meantime, UMC will continue to penetrate into new segments and expand our presence in existing markets; our core competence in process technology development, and world-class foundry service will strengthen our position in delivering logic and specialty manufacturing solutions.”

Summary of Operating Results

Operating Results

(Amount: NT$ million)

4Q19

3Q19

QoQ %
change

4Q18

YoY %
change

Operating Revenues

41,849

37,738

10.9

35,517

17.8

Gross Profit

6,968

6,433

8.3

4,601

51.4

Operating Expenses

(6,165)

(5,131)

20.2

(6,396)

(3.6)

Net Other Operating Income and Expenses

1,215

1,207

0.6

1,206

0.7

Operating Income (Loss)

2,018

2,509

(19.6)

(589)

-

Net Non-Operating Income and Expenses

946

(532)

-

(1,998)

-

Net Income (Loss) Attributable to Stockholders of the Parent

3,837

2,929

31.0

(1,707)

-

EPS (NT$ per share)

0.33

0.25

 

(0.14)

 

(US$ per ADS)

0.055

0.042

 

(0.023)

 


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