UMC United Microelectronics Corp

1H results lead to EPS of NT$0.58 per share; MIFS acquisition to fuel long term growth

Second Quarter 2018 Overview1:

• Revenue: NT$38.85 billion (US$1.28 billion)
• Gross margin: 17.2%
• Foundry revenue from 28nm: 15%; Foundry operating margin: 8.4%
• Foundry capacity utilization rate: 97%
• Net Income attributable to stockholders of the parent: NT$3.66 billion (US$120 million)
• Earnings per share: NT$0.30; earnings per ADS: US$0.049

United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the second quarter of 2018.

Second quarter consolidated revenue was NT$38.85 billion, up 3.6% QoQ from NT$37.50 billion in 1Q18 and 3.5% YoY from NT$37.54 billion in 2Q17. Consolidated gross margin for 2Q18 was 17.2%. Net income attributable to stockholders of the parent was NT$3.66 billion, with earnings per ordinary share of NT$0.30.

Jason Wang, co-president of UMC, said, “In the second quarter, foundry revenue increased 3.6% sequentially to NT$38.77 billion. Foundry operating margin was 8.4%. Overall capacity utilization reached 97%, bringing wafer shipments to 1.85 million 8-inch equivalent wafers. The operating results from 2Q18 reflected full utilization from 8" and mature 12" technologies, driven by strong demand in computing and communications segments. This led to a first half EPS of NT$0.58 while generating NT$13.42 billion in free cash flow. To further take advantage of this healthy demand situation, our Board of Directors approved for the company to supplement UMC’s mature 12" process capacity through the full acquisition of Fujitsu’s 300mm MIFS Semiconductor fab in Japan. The Board of Directors also approved a plan for our China-based operations to apply for listing on the Shanghai Stock Exchange, led by UMC’s HeJian.”

Co-president Wang continued, “We project third quarter demand outlook to remain flat due to rising inventory levels from slower smartphone digestion and the uncertainty surrounding the ongoing US-China trade tensions. Despite the current market situation, UMC has always focused on expanding our global scale to enhance customer value by providing a diversified manufacturing base across Asia that is also strategically positioned near our Taiwan headquarters for seamless logistical support. UMC’s intention to acquire MIFS Semiconductor and list our China operations on the Shanghai Stock Exchange corresponds with this global expansion strategy and will fuel our long-term foundry competitiveness. We will continue to strive for manufacturing excellence and better position ourselves globally to create benefits for our shareholders, customers and employees.”

1 Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending June 30, 2018, the three-month period ending March 31, 2018, and the equivalent three-month period that ended June 30, 2017. For all 2Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the June 30, 2018 exchange rate of NT$ 30.48 per U.S. Dollar.

Summary of Operating Results

  Operating Results (Amount: NT$ million)             2Q18     1Q18     QoQ %change     2Q17     YoY %change Net Operating Revenues             38,852     37,497     3.6     37,538     3.5 Gross Profit 6,675 4,642 43.8 6,739 (0.9) Operating Expenses (5,213) (4,850) 7.5 (5,330) (2.2) Net Other Operating Income and Expenses 1,719 977 75.9 259 563.7 Operating Income 3,181 769 313.7 1,668 90.7 Net Non-Operating Income and Expenses (1,095) 1,088 - 448 - Net Income Attributable to Stockholders of the Parent 3,659 3,400 7.6 2,099 74.3

EPS (NT$ per share)

0.30 0.28 0.17

(US$ per ADS)

            0.049     0.046           0.028        

Net operating revenues in 2Q18 increased 3.6% to NT$38.85 billion, including NT$38.77 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained at 44%. Gross profit increased 43.8% to NT$6.68 billion, or 17.2% of revenue. Operating expenses increased 7.5% to NT$5.21 billion. Net other operating income was NT$1.72 billion, leading to operating income of NT$3.18 billion. Net non-operating expense was NT$1.10 billion. Net income attributable to stockholders of the parent was NT$3.66 billion.

Earnings per ordinary share for the quarter was NT$0.30. Earnings per ADS was US$0.049. The basic weighted average number of outstanding shares in 2Q18 was 12,048,575,089, compared with 12,202,773,078 shares in 1Q18 and 12,208,239,978 shares in 2Q17. The diluted weighted average number of outstanding shares was 13,268,862,054 in 2Q18, compared with 13,457,161,259 shares in 1Q18 and 13,383,329,206 shares in 2Q17. The fully diluted share count on June 30, 2018 was approximately 13,644,606,000. On June 30, 2018, UMC held 600 million treasury shares acquired from the 16th, 17th and 18th share buy-back programs.

Detailed Financials Section

  COGS & Expenses (Amount: NT$ million)             2Q18     1Q18     QoQ %change     2Q17     YoY %change Net Operating Revenues             38,852     37,497     3.6     37,538     3.5 COGS (32,177) (32,855) (2.1) (30,799) 4.5 Depreciation (12,139) (11,815) 2.7 (11,100) 9.4 Other Mfg. Costs (20,038) (21,040) (4.8) (19,699) 1.7 Gross Profit 6,675 4,642 43.8 6,739 (0.9) Gross Margin (%) 17.2% 12.4% 18.0% Operating Expenses (5,213) (4,850) 7.5 (5,330) (2.2) G&A (1,083) (1,017) 6.5 (1,035) 4.6 Sales & Marketing (1,103) (909) 21.3 (1,049) 5.1 R&D (3,027) (2,924) 3.5 (3,246) (6.7) Net Other Operating

Income & Expenses

1,719 977 75.9 259 563.7 Operating Income             3,181     769     313.7     1,668     90.7  

Net operating revenues grew 3.6% to NT$38.85 billion. COGS decreased 2.1% to NT$32.18 billion, as depreciation increased 2.7% to NT$12.14 billion while other manufacturing costs decreased 4.8% to NT$20.04 billion. Gross profit was NT$6.68 billion. Operating expenses increased 7.5% to NT$5.21 billion. General and Administrative (G&A) expenses increased 6.5% to NT$1.08 billion. Sales & Marketing expenses increased 21.3% to NT$1.10 billion and R&D expenses was up 3.5% to NT$3.03 billion, or 7.8% of net operating revenues. Net other operating income was NT$1.72 billion, leading to an operating income of NT$3.18 billion.

 

Non-Operating Income and Expenses

(Amount: NT$ million)             2Q18     1Q18     2Q17 Non-Operating Income and Expenses             (1,095)     1,088     448 Net Interest Income and Expenses (505) (529) (502) Net Investment Gain and Loss 105 582 228 Exchange Gain and Loss (720) 1,021 807 Other Gain and Loss             25     14     (85)  

Net non-operating expense in 2Q18 was NT$1.10 billion, which primarily resulted from NT$720 million in exchange loss and NT$505 million in net interest expense, which were partially offset by a NT$105 million in net investment gain.

 

Cash Flow Summary

(Amount: NT$ million)            

For the 3-MonthPeriod EndedJun. 30, 2018

   

For the 3-MonthPeriod EndedMar. 31, 2018

Cash Flow from Operating Activities             14,264     8,776 Net income before tax 2,086 1,857 Depreciation & Amortization 13,373 13,288 Net loss (gain) of financial assets

and liabilities at FVTPL

112 (377) Exchange loss (gain) on financial assets and liabilities 1,516 (1,356) Changes in working capital (1,354) (3,231) Interest paid (911) (312) Income tax paid (86) (632) Other (472) (461) Cash Flow from Investing Activities (6,077) 666 Capital expenditures (3,901) (5,716) Acquisition of investments accounted for under the equity method (840) - Changes in refundable deposits (980) 60 Acquisition of intangible assets (130) (248) Other (226) 6,570 Cash Flow from Financing Activities (10,795) (13,714) Bank loans (8,859) (5,561) Redemption of bonds - (7,500) Treasury stock acquired (2,534) (595) Other 598 (58) Effect of Exchange Rate 657 (260) Net Cash Flow             (1,951)     (4,532)  

Cash inflow from operating activities was NT$14.26 billion. Cash outflow from investing activities totaled NT$6.08 billion, including NT$3.90 billion in CAPEX spending for the foundry segment, resulting in free cash flow of NT$10.36 billion. Cash outflow from financing activities totaled NT$10.80 billion, mainly from NT$8.86 billion in bank loan payments and NT$2.53 billion in share buyback. Net cash outflow in 2Q18 was NT$1.95 billion. Over the next 12 months, the company expects to repay NT$3.11 billion in bank loans.

  Current Assets (Amount: NT$ billion)             2Q18     1Q18     2Q17 Cash and Cash Equivalents             75.19     77.14     68.13 Notes & Accounts Receivable 27.01 25.01 22.23 Days Sales Outstanding 61 56 52 Inventories, net 17.66 17.14 16.28 Days of Inventory 49 49 48 Total Current Assets             137.08     136.42     120.08  

Cash and cash equivalents decreased to NT$75.19 billion. Days of inventory remained at 49 days.

  Liabilities (Amount: NT$ billion)             2Q18     1Q18     2Q17 Total Current Liabilities             59.17     72.57     87.70 Notes & Accounts Payable 7.41 7.00 6.65 Short-Term Credit / Bonds 17.23 40.00 48.19 Payable on Equipment 3.61 2.97 5.28 Dividends payable 8.56 - 6.11 Other 22.36 22.60 21.47 Long-Term Credit / Bonds 67.76 52.61 51.24 Long-Term Investment Liabilities 20.79 20.90 19.92 Total Liabilities 170.11 169.35 172.62 Debt to Equity             81%     78%     81%  

Current liabilities decreased to NT$59.17 billion, mainly from a decrease in Short-Term Credit/Bonds. Total liabilities increased to NT$170.11 billion, mainly from the increase in Long-Term Credit/Bonds, leading to a debt to equity ratio of 81%.

Analysis of Revenue2 for Foundry Segment

  Revenue Breakdown by Region Region             2Q18     1Q18     4Q17     3Q17     2Q17 North America             37%     42%     43%     43%     42% Asia Pacific             51%     47%     45%     47%     47% Europe             9%     8%     9%     8%     7% Japan             3%     3%     3%     2%     4%                            

Revenue from Asia Pacific increased to 51%, while contribution from North American customers declined to 37%. Revenue from Japan remained at 3%.

  Revenue Breakdown by Geometry Geometry             2Q18     1Q18     4Q17     3Q17     2Q17 14nm and below             3%     2%     2%     1%     1% 14nm<x<=28nm             15%     12%     15%     15%     17% 28nm<x<=40nm             26%     30%     28%     29%     28% 40nm<x<=65nm             12%     13%     12%     12%     12% 65nm<x<=90nm             7%     6%     5%     6%     5% 90nm<x<=0.13um             11%     11%     12%     12%     12% 0.13um<x<=0.18um             13%     13%     13%     12%     12% 0.18um<x<=0.35um             10%     10%     10%     10%     10% 0.5um and above             3%     3%     3%     3%     3%                            

Business from 14nm increased to 3% of 2Q18 revenue, while 28nm contribution was 15%.

  Revenue Breakdown by Customer Type Customer Type             2Q18     1Q18     4Q17     3Q17     2Q17 Fabless             92%     92%     91%     90%     91% IDM             8%     8%     9%     10%     9%                            

Revenue from fabless customers remained at 92% of revenue.

  Revenue Breakdown by Application (1) Application             2Q18     1Q18     4Q17     3Q17     2Q17 Computer             16%     14%     13%     14%     14% Communication             47%     47%     49%     47%     48% Consumer             28%     29%     29%     31%     29% Others             9%     10%     9%     8%     9%                            

The communication segment remained at 47% of sales, while revenue from consumer applications declined to 28%.

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.2 Revenue in this section represents wafer sales

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) in 2Q18 declined slightly.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q18_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

  Wafer Shipments               2Q18     1Q18     4Q17     3Q17     2Q17 Wafer Shipments(8” K equivalents)             1,846     1,747     1,670     1,748     1,741   Quarterly Capacity Utilization Rate               2Q18     1Q18     4Q17     3Q17     2Q17 Utilization Rate             97%     94%     90%     96%     96% Total Capacity(8” K equivalents)             1,918     1,858     1,886     1,861     1,816                            

In 2Q18, wafer shipments grew 5.7% to 1,846K. Quarterly capacity increased 3.2% QoQ to 1,918K, resulting in an overall utilization rate of 97% in 2Q18.

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Capacity4 for Foundry Segment

Total capacity in the second quarter amounted to 1,918K 8-inch equivalent wafers. We expect capacity in the third quarter to grow 1.0% QoQ to 1,938K 8-inch equivalent wafers, including the capacity expansion at Fab 12i and USCXM.

           

Annual Capacity inthousands of wafers

Quarterly Capacity inthousands of wafers

FAB   Geometry(um)         2017     2016     2015     2014 FAB         3Q18E     2Q18     1Q18     4Q17 WTK   6"   3.5 – 0.45         422     423     421     448 WTK         93     106     104     106 Fab 8A   8"   0.5 – 0.25         825     827     813     813 Fab 8A         207     207     204     207 Fab 8C   8"   0.35 – 0.11         357     348     347     347 Fab 8C         92     92     91     92 Fab 8D   8"   0.13 – 0.09         341     342     341     358 Fab 8D         86     86     85     86 Fab 8E   8"   0.5 – 0.18         418     419     418     418 Fab 8E         105     105     103     105 Fab 8F   8"   0.18 – 0.11         417     401     388     388 Fab 8F         108     108     107     108 Fab 8S   8"   0.18 – 0.11         347     336     335     335 Fab 8S         93     93     92     93 HJ   8"   0.5 – 0.11         753     750     667     547 HJ         194     194     190     194 Fab 12A   12"   0.13 – 0.014         970     885     793     700 Fab 12A         250     250     246     250 Fab 12i   12"   0.13 – 0.040         537     584     572     573 Fab 12i         144     136     131     134 USCXM   12"   0.040 – 0.028         97     9     -     - USCXM         51     46     35     35 Total(1)         7,304     6,983     6,617     6,323 Total         1,938     1,918     1,858     1,886 YoY Growth Rate         5%     6%     5%     4%                                        

(1) 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. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

  Capital Expenditure by Year - in US$ billion Year           2017         2016         2015           2014         2013 CAPEX         $ 1.4       $ 2.8       $ 1.9         $ 1.4       $ 1.1          

2018 CAPEX Plan

              8"    

12"

     

Total

33%

 

   

67%

 

     

US$1.1 billion

 

CAPEX spending in 2Q18 was US$131 million, bringing first half 2018 capital expenditures to US$326 million. Full year 2018 CAPEX plan is budgeted for US$1.1 billion.

4 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.

Third Quarter of 2018 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To remain flat
• ASP in USD: Marginal increase
• Profitability: Gross profit margin will be in the mid-teens % range
• Foundry Segment Capacity Utilization: Low 90% range
• 2018 CAPEX for Foundry Segment: US$1.1 billion

Recent Developments / Announcements

            Jul. 3, 2018

Fujian Intermediate People's Court of China Rules in Favor of UMC in Patent Infringement Lawsuits Against Micron

 

 

Jun. 29, 2018

UMC Board Approves 100% Acquisition of MIFS Fab from Fujitsu as Part of Global Manufacturing Strategy

 

Jun. 12, 2018

UMC Shareholders Elect 14(th) Term of Directors at Annual Shareholders Meeting

 

May 29, 2018

UMC Earns Highest Ranks in Corporate Governance Evaluation for 4th Consecutive Year

 

May 24, 2018

UMC Holds 2018 China Technology Forum

 

Apr. 26, 2018

UMC Files Form 20-F for 2017 with US Securities and Exchange Commission

 

Apr. 25, 2018

UMC 1Q 2018 Financial Results

 

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

Conference Call / Webcast Announcement

Wednesday, July 25, 2018

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:USA Toll Free: 1-866 836-0101Taiwan Number: 02-2192-8016Other Areas: +886-2-2192-8016

Access Code: UMC

A live webcast and replay of the 2Q18 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 600,000 wafers per month. The company employs more than 20,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, 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 introduction of new services and technologies, future outsourcing, competition, wafer capacity, 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 regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. 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.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States 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) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) 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 natural disasters, 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 United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and 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 prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

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 AND SUBSIDIARIES Consolidated Condensed Balance Sheet

As of June 30, 2018

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)                         June 30, 2018 US$ NT$ % Assets Current assets Cash and cash equivalents 2,467 75,193 19.7% Financial assets at fair value through profit or loss, current 15 470 0.1% Contract assets, current 5 152 0.0% Notes & Accounts receivable, net 886 27,012 7.1% Inventories, net 579 17,656 4.6% Other current assets 545 16,600 4.5% Total current assets 4,497 137,083 36.0%   Non-current assets Funds and investments 1,225 37,334 9.8% Property, plant and equipment 6,195 188,825 49.6% Other non-current assets 579 17,648 4.6% Total non-current assets 7,999 243,807 64.0% Total assets 12,496 380,890 100.0%   Liabilities Current liabilities Short-term loans 381 11,620 3.0% Financial liabilities at fair value through profit or loss, current 1 39 0.0% Contract liabilities, current 69 2,115 0.6% Payables 859 26,187 6.8% Dividends payable 281 8,557 2.3% Current portion of long-term liabilities 184 5,612 1.5% Other current liabilities 166 5,041 1.3% Total current liabilities 1,941 59,171 15.5%   Non-current liabilities Bonds payable 1,270 38,699 10.2% Long-term loans 954 29,065 7.6% Other non-current liabilities 1,416 43,173 11.4% Total non-current liabilities 3,640 110,937 29.2% Total liabilities 5,581 170,108 44.7%   Equity Equity attributable to the parent company Capital 4,142 126,243 33.2% Additional paid-in capital 1,344 40,968 10.8%

Retained earnings, unrealized gains or losses on financial

assets measured at fair value through other comprehensive

income and exchange differences on translation of foreign

operations

1,667 50,809 13.3% Treasury stock (258) (7,848) (2.1%) Total equity attributable to the parent company 6,895 210,172 55.2% Non-controlling interests 20 610 0.1% Total equity 6,915 210,782 55.3% Total liabilities and equity 12,496 380,890 100.0%   Note：New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar.     UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) Except Per Share and Per ADS Data                                                           Year over Year Comparison Quarter over Quarter Comparison Three-Month Period Ended Three-Month Period Ended June 30, 2018 June 30, 2017 Chg. June 30, 2018 March 31, 2018 Chg. US$ NT$ US$ NT$ % US$ NT$ US$ NT$ % Net operating revenues 1,275 38,852 1,232 37,538 3.5% 1,275 38,852 1,230 37,497 3.6% Operating costs (1,056) (32,177) (1,011) (30,799) 4.5% (1,056) (32,177) (1,078) (32,855) (2.1%) Gross profit 219 6,675 221 6,739 (0.9%) 219 6,675 152 4,642 43.8% 17.2% 17.2% 18.0% 18.0% 17.2% 17.2% 12.4% 12.4% Operating expenses - Sales and marketing expenses (36) (1,103) (34) (1,049) 5.1% (36) (1,103) (30) (909) 21.3% - General and administrative expenses (36) (1,083) (34) (1,035) 4.6% (36) (1,083) (33) (1,017) 6.5% - Research and development expenses (99) (3,027) (107) (3,246) (6.7%) (99) (3,027) (96) (2,924) 3.5% Subtotal (171) (5,213) (175) (5,330) (2.2%) (171) (5,213) (159) (4,850) 7.5% Net other operating income and expenses 56 1,719 9 259 563.7% 56 1,719 32 977 75.9% Operating income 104 3,181 55 1,668 90.7% 104 3,181 25 769 313.7% 8.2% 8.2% 4.4% 4.4% 8.2% 8.2% 2.1% 2.1%   Net non-operating income and expenses (36) (1,095) 14 448 - (36) (1,095) 36 1,088 -

Income from continuing operations before income tax

68 2,086 69 2,116 (1.4%) 68 2,086 61 1,857 12.3% 5.4% 5.4% 5.6% 5.6% 5.4% 5.4% 5.0% 5.0%   Income tax benefit (expense) 11 331 (21) (638) - 11 331 38 1,173 (71.8%) Net income 79 2,417 48 1,478 63.5% 79 2,417 99 3,030 (20.2%) 6.2% 6.2% 3.9% 3.9% 6.2% 6.2% 8.1% 8.1%   Other comprehensive income (loss) 87 2,641 46 1,396 89.2% 87 2,641 (7) (234) -   Total comprehensive income (loss) 166 5,058 94 2,874 76.0% 166 5,058 92 2,796 80.9%  

Net income attributable to:

　　Stockholders of the parent 120 3,659 69 2,099 74.3% 120 3,659 112 3,400 7.6% 　　Non-controlling interests (41) (1,242) (21) (621) 100.0% (41) (1,242) (13) (370) 235.7%   Comprehensive income (loss) attributable to: 　　Stockholders of the parent 207 6,297 114 3,488 80.5% 207 6,297 104 3,158 99.4% 　　Non-controlling interests (41) (1,239) (20) (614) 101.8% (41) (1,239) (12) (362) 242.3%   Earnings per share-basic 0.010 0.30 0.006 0.17 0.010 0.30 0.009 0.28 Earnings per ADS (2) 0.049 1.50 0.028 0.85 0.049 1.50 0.046 1.40

 

Weighted average number of sharesoutstanding (in millions)

12,049 12,208 12,049 12,203                                                                                   Notes:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar.

(2) 1 ADS equals 5 common shares.     UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Comprehensive Income 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 Six-Month Period Ended June 30, 2018 June 30, 2018 US$ NT$ % US$ NT$ % Net operating revenues 1,275 38,852 100.0% 2,505 76,349 100.0% Operating costs (1,056) (32,177) (82.8%) (2,134) (65,032) (85.2%) Gross profit 219 6,675 17.2% 371 11,317 14.8%   Operating expenses - Sales and marketing expenses (36) (1,103) (2.8%) (66) (2,012) (2.6%) - General and administrative expenses (36) (1,083) (2.8%) (69) (2,099) (2.8%) - Research and development expenses (99) (3,027) (7.8%) (195) (5,951) (7.8%) Subtotal (171) (5,213) (13.4%) (330) (10,062) (13.2%) Net other operating income and expenses 56 1,719 4.4% 89 2,696 3.6% Operating income 104 3,181 8.2% 130 3,951 5.2%   Net non-operating income and expenses (36) (1,095) (2.8%) (1) (8) (0.0%) Income from continuing operations before

income tax

68 2,086 5.4% 129 3,943 5.2%   Income tax benefit 11 331 0.8% 50 1,503 1.9% Net income 79 2,417 6.2% 179 5,446 7.1%   Other comprehensive income (loss) 87 2,641 6.8% 79 2,408 3.2%   Total comprehensive income (loss) 166 5,058 13.0% 258 7,854 10.3%   Net income attributable to: 　　Stockholders of the parent 120 3,659 9.4% 232 7,059 9.2% 　　Non-controlling interests (41) (1,242) (3.2%) (53) (1,613) (2.1%)   Comprehensive income (loss) attributable to: 　　Stockholders of the parent 207 6,297 16.2% 310 9,456 12.4% 　　Non-controlling interests (41) (1,239) (3.2%) (52) (1,602) (2.1%)   Earnings per share-basic 0.010 0.30 0.019 0.58 Earnings per ADS (2) 0.049 1.50 0.095 2.90  

Weighted average number of shares

outstanding (in millions)

12,049 12,125                                                 Notes: (1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar. (2) 1 ADS equals 5 common shares.     UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Statement of Cash Flows For The Six-Month Period Ended June 30, 2018 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)                         US$     NT$ Cash flows from operating activities :             Net income before tax     129     3,943 Depreciation & Amortization     875     26,662 Changes in notes & accounts receivable     (157)     (4,774) Changes in other current assets     37     1,136 Changes in contract liabilities     (61)     (1,846) Changes in assets, liabilities and others     (67)     (2,080) Net cash provided by operating activities     756     23,041             Cash flows from investing activities :             Acquisition of financial assets at fair value through profit or loss     (14)     (418) Acquisition of investments accounted for under the equity method     (28)     (840) Acquisition of property, plant and equipment     (316)     (9,617) Increase in refundable deposits     (30)     (920) Others     210     6,384 Net cash used in investing activities     (178)     (5,411)             Cash flows from financing activities :             Decrease in short-term loans     (458)     (13,965) Redemption of bonds     (246)     (7,500) Treasury stock acquired     (103)     (3,129) Others     3     85 Net cash used in financing activities     (804)     (24,509)             Effect of exchange rate changes on cash and cash equivalents     13     397 Net decrease in cash and cash equivalents     (213)     (6,482)             Cash and cash equivalents at beginning of period     2,680     81,675             Cash and cash equivalents at end of period     2,467     75,193                             Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2018 exchange rate of NT $30.48 per U.S. Dollar.  

View source version on businesswire.com: https://www.businesswire.com/news/home/20180725005300/en/

UMCInvestor RelationsMichael Lin / David Wong, + 886-2-2658-9168, ext. 16900jinhong_lin@umc.comdavid_wong@umc.com