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UMC Reports Second Quarter 2011 Results

Q2 results meet guidance; global macroeconomic factors to dampen customer demand in 2H11


News provided by

United Microelectronics Corporation

Aug 03, 2011, 02:41 ET

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TAIPEI, Taiwan, Aug. 3, 2011 /PRNewswire-Asia/ --

Second Quarter 2011 Overview (Note 1):

  • Revenue: increased 0.1% QoQ to NT$28.15 billion (US$ 980.49 million)
  • Gross margin: 23.9%; operating margin: 11.8%
  • Capacity utilization: 87%
  • Net income: NT$3.19 billion (US$ 111.11 million)
  • Earnings per share: NT$0.26; earnings per ADS: US$0.05

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 Jun 30, 2011, the three-month period ending March 31, 2011, and the equivalent three-month period that ended Jun 30, 2010. For all 2Q11 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Jun 30, 2011 exchange rate of NT$28.71 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 second quarter of 2011.

Revenue was NT$28.15 billion, a 0.1% quarter-over-quarter increase from NT$28.12 billion in 1Q11, and a 5.4% year-over-year decrease from NT$29.75 billion in 2Q10.  Gross margin was 23.9%, operating margin was 11.8%, net income was NT$3.19 billion, and earnings per ordinary share were NT$0.26.

Dr. Shih-Wei Sun, CEO of UMC, said: "In Q2 2011, wafer shipments reached 1.15 million 8-inch equivalent wafers, in line with UMC's guidance. As we enter the third quarter of 2011, certain macroeconomic factors such as European and U.S. sovereign debt issues and emerging market inflation have led to unfavorable global economic conditions. These macro uncertainties have led customers to adopt a conservative outlook. Furthermore, customers have adjusted their order patterns in order to consume elevated inventory levels due to overstocking after Japan's March earthquake. This ongoing situation has negatively impacted the worldwide semiconductor industry and will offset the high demand season traditionally seen during the second half of the year. Consequently, we anticipate UMC's business performance may reflect this weakened demand condition beyond Q3."

"During this period, we will further enhance our operations through active customer diversification, efficient business execution, and aggressive cost control measures. We will also focus on the opportunities ahead. UMC's CAPEX, which remains at US$1.8 billion for 2011, will support our advanced production ramp. UMC's R&D efforts will continue in earnest to prepare for customers' future technology requirements. We will also leverage our foundry technologies to take advantage of the fast-growing mobile communication and computing markets with high performance/low power consumption requirements. UMC's volume production 40nm process is expected to reach 10% of revenue by the end of 2011. We are also smoothly developing our 28nm process and design IP platform, with the first of several 28nm customer products entering pilot production in Q3, 2011.  For 65nm, UMC will benefit from the second wave of new customers targeting specialty technologies including analog, high voltage, CMOS image sensor, and embedded non-volatile memory products. We believe through the leadership of our cohesive, high caliber management team, healthy capital structure, and clearly defined business strategy, UMC will emerge from the downturn stronger and better positioned to capitalize on the business opportunities in 2012 and beyond."

Summary of Operating Results

Operating Results

(Amount: NT$ million)

2Q11

1Q11

QoQ %
change

2Q10

YoY %
change

Revenue

28,150

28,118

0.1

29,745

(5.4)

Gross Profit

6,718

7,742

(13.2)

8,805

(23.7)

Operating Expenses

(3,398)

(3,300)

3.0

(3,368)

0.9

Operating Income

3,320

4,442

(25.3)

5,437

(38.9)

Non-Operating Income

203

432

(53.0)

199

2.0

Net Income

3,192

4,483

(28.8)

5,273

(39.5)

EPS   (NT$ per share)

0.26

0.36


0.42


      (US$ per ADS)

0.045

0.063


0.073


Revenue increased 0.1% QoQ to NT$28.15 billion from NT$28.12 billion in 1Q11, and decreased 5.4% YoY from NT$29.75 billion in 2Q10. Wafer shipments increased 2.2% QoQ; however, the associated revenue growth was mostly offset by the appreciation of the NT dollar. Gross profit was NT$6.72 billion, or 23.9% of revenue, compared to NT$7.74 billion, or 27.5% of 1Q11 revenue. Operating income for the quarter was NT$3.32 billion, or 11.8% of revenue, compared to NT$4.44 billion, or 15.8% of 1Q11 revenue. Net income in 2Q11 was NT$3.19 billion, compared to NT$4.48 billion in 1Q11.

Earnings per ordinary share for the quarter were NT$0.26. Earnings per ADS (Note 2) were US$0.045.  The basic weighted average number of outstanding shares in 2Q11 was 12,513,899,178, compared with 12,513,899,178 shares in 1Q11 and 12,449,924,578 shares in 2Q10.  The diluted weighted average number of outstanding shares was 13,013,072,483 in 2Q11, compared with 12,810,053,573 shares in 1Q11 and 12,638,413,042 shares in 2Q10.  The fully diluted share count on June 30, 2011 was approximately 14,349,267,000.  On June 30, 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)

2Q11

1Q11

QoQ %
change

2Q10

YoY %
change

Revenue

28,150

28,118

0.1

29,745

(5.4)

COGS

(21,432)

(20,376)

5.2

(20,940)

2.3

 Depreciation

(6,495)

(5,840)

11.2

(6,832)

(4.9)

 Other Mfg. Costs

(14,937)

(14,536)

2.8

(14,108)

5.9

Gross Profit

6,718

7,742

(13.2)

8,805

(23.7)

Gross Margin (%)

23.9%

27.5%


29.6%


Total Operating Exp.

(3,398)

(3,300)

3.0

(3,368)

0.9

 G&A

(588)

(668)

(12.0)

(679)

(13.4)

 Sales & Marketing

(585)

(452)

29.4

(553)

5.8

 R&D

(2,225)

(2,180)

2.1

(2,136)

4.2

Operating Income

3,320

4,442

(25.3)

5,437

(38.9)

Higher COGS reflected increasing depreciation and wafer shipments in 2Q11. Total operating expenses increased to NT$3.40 billion, mainly due to the increase in R&D wafers and expenses for advanced process nodes. The total R&D expense was 7.9% of revenue in 2Q11.

Non-Operating Income (Expenses)

(Amount: NT$ million)

2Q11

1Q11

2Q10

Net Non-Operating Income

203

432

199

Net Interest Income

17

26

26

Net Investment Loss

(253)

(420)

(203)

Gain on Disposal of Investment

203

16

157

Exchange Gain

29

149

50

Other Gain

207

661

169

Net non-operating income during 2Q11 reached NT$203 million, predominantly from disposal gains of Chipbond and KYEC. Net investment loss was NT$253 million, including NT$150 million from decreased valuation of ProMos shares. At the end of 2Q11, UMC held NT$117 million worth of ProMos' common shares.

Cash Flow Summary

(Amount: NT$ million)

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

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

Cash Flow from Operations

10,594

12,667

 Net Income

3,192

4,483

 Depreciation & Amortization

7,598

7,317

 Changes in Working Capital

(793)

106

 Other

597

761

Cash Flow from Investing

(10,108)

(14,474)

 Capital Expenditures

(10,255)

(12,757)

 Other

147

(1,717)

Cash Flow from Financing

14,019

(120)

 Bank Loans

(1,262)

(123)

 ECB Issued

14,365

-

 Employee Stock Option

918

-

 Other

(2)

3

Effect of Exchange Rate

(153)

23

Net Cash Flow

14,352

(1,904)

Operating cash inflow was NT$10.59 billion. Free cash flow (Note 3) for 2Q11 was NT$339 million, as CAPEX spending for the quarter was NT$10.26 billion. The NT$14.02 billion of financing cash inflow was mainly from the issuance of ECB. Net cash inflow was NT$14.35 billion in 2Q11.

Note 3:

Free cash flow = Operating cash flow – Capital expenditures

Current Assets

(Amount: NT$ billion)

2Q11

1Q11

2Q10

Cash & Cash Equivalents

45.38

31.03

45.51

Notes & Accounts Receivable

15.54

15.78

18.53

 Days Sales Outstanding

51

52

54

Inventories

11.39

12.02

10.30

 Avg. Inventory Turnover

51

53

44

Total Current Assets

81.26

67.90

83.84

Cash and cash equivalents increased to NT$45.38 billion due to the ECB issuance in 2Q11.

Liabilities

(Amount: NT$ billion)

2Q11

1Q11

2Q10

Total Current Liabilities

48.72

38.37

38.01

 Accounts Payable

5.14

5.86

5.66

 Short-Term Credit / Bonds

6.90

8.16

6.30

Cash Dividends Payable

14.03

-

6.23

 Payable on Equipment

9.03

9.97

7.57

 Other

13.62

14.38

12.25

Long-Term Liabilities

14.38

0.79

0.92

Total Liabilities

66.63

42.66

42.42

Debt to Equity

32%

19%

21%

Total liabilities increased to NT$66.63 billion in 2Q11, attributed to the addition of NT$14.03 billion of cash dividends payable to stockholders in current liabilities and the ECB in long-term liabilities.  Consequently, UMC's debt to equity ratio increased to 32%, which will be lower in 3Q11 after the dividends paid out.

Analysis of Revenue (Note 4)

Note 4:

Revenue in this section represents wafer sales.

Revenue Breakdown by Region

Region

2Q11

1Q11

4Q10

3Q10

2Q10

North America

49%

51%

53%

46%

46%

Asia Pacific

39%

35%

30%

40%

42%

Europe

11%

13%

16%

13%

11%

Japan

1%

1%

1%

1%

1%

The percentage of revenue from Asia Pacific grew to 39%, reflecting the relative strength of Asia Pacific based computer and consumer customers.

Revenue Breakdown by Geometry

Geometry

2Q11

1Q11

4Q10

3Q10

2Q10

40nm and below

6%

6%

5%

4%

3%

40nm<x<=65nm

31%

29%

30%

26%

21%

65nm<x<=90nm

13%

15%

16%

14%

18%

90nm<x<=0.13um

24%

23%

20%

24%

22%

0.13um<x<=0.18um

12%

13%

14%

15%

18%

0.18um<x<=0.35um

9%

9%

10%

12%

13%

0.5um and above

5%

5%

5%

5%

5%

Revenue from 65nm and below grew to 37% of total revenue, with 40nm accounting for 6% of UMC's Q2 revenue contribution as demand remains steady for advanced process nodes.

Revenue Breakdown by Customer Type

Customer Type

2Q11

1Q11

4Q10

3Q10

2Q10

Fabless

73%

72%

73%

78%

81%

IDM

27%

28%

27%

22%

19%

The percentage of revenue from Fabless customers increased slightly to 73% in 2Q11 due to increased Fabless demand in Asia.

Revenue Breakdown by Application (1)

Application

2Q11

1Q11

4Q10

3Q10

2Q10

Computer

15%

14%

11%

12%

13%

Communication

53%

57%

56%

53%

54%

Consumer

29%

26%

30%

32%

31%

Memory

1%

1%

1%

1%

1%

Others

2%

2%

2%

2%

1%

(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. Memory consists of DRAM, SRAM, Flash, ROM, and EEPROM.

Revenue from the Consumer sector grew to 29% of total 2Q11 revenue was due to relatively stronger demand from DTV and STB in 2Q11. Weak feature phone related demand resulted in decreased Communication sector revenue contribution for Q2.

Blended Average Selling Price Trend

The blended average selling price (ASP) was flat during 2Q11.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q11_ASP_trend.asp)

Shipment and Utilization Rate (Note 5)

Note 5:

Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Wafer Shipments


2Q11

1Q11

4Q10

3Q10

2Q10

Wafer Shipments
(8" K equivalents)

1,145

1,120

1,132

1,202

1,156


Quarterly Capacity Utilization Rate


2Q11

1Q11

4Q10

3Q10

2Q10

Utilization Rate

87%

90%

94%

>99%

100%

Total Capacity
(8" K equivalents)

1,330

1,259

1,234

1,220

1,183

Wafer shipments increased 2.2% sequentially to 1,145K in 2Q11, compared to 1,120K 8-inch equivalent wafers shipped in 1Q11. Since wafer capacity increased in Q2, overall utilization rate for the quarter dropped to 87%.

Capacity (Note 6)

Note 6:

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.

Capacity during the second quarter was 1,330K 8-inch equivalent wafers. The increase in total capacity is mainly due to advanced capacity expansion at 12" fabs. The estimated installed capacity in 3Q11 will increase to 1,358K 8-inch equivalent wafers.

Annual Capacity in
thousands of 8-inch wafer equivalents

FAB

Geometry
(um)

2010

2009

2008

2007

Fab6A

6"

3.5 – 0.45

331

328

328

328

Fab8A

8"

0.5 – 0.25

816

816

816

816

Fab8C

8"

0.35 – 0.11

366

405

417

400

Fab8D

8"

0.13 – 0.09

314

267

257

260

Fab8E

8"

0.5 – 0.18

410

408

408

408

Fab8F

8"

0.18 – 0.11

388

381

372

372

Fab8S

8"

0.18 – 0.11

304

300

291

276

Fab12A

12"

0.18 – 0.040

841

866

876

847

Fab12i

12"

0.13 – 0.065

1,021

815

742

601

Total (1)

4,791

4,586

4,507

4,308

YoY Growth Rate

4%

2%

5%

7%

(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

3Q11E

2Q11

1Q11

4Q10

Fab6A

76

76

75

83

Fab8A

204

204

201

204

Fab8C

90

90

89

90

Fab8D

93

93

85

84

Fab8E

119

119

114

104

Fab8F

98

98

96

98

Fab8S

77

77

75

77

Fab12A

300

278

234

213

Fab12i

302

296

291

275

Total

1,358

1,330

1,259

1,234

CAPEX

UMC Capital Expenditure by Year - in US$ billion

Year

2010

2009

2008

2007

2006

CAPEX

$ 1.8

$ 0.55

$ 0.35

$ 0.9

$ 1.0


2011 CAPEX Plan


8"

12"

Total

UMC

14%

86%

Approximately US$1.8 billion

The capital expenditure budget remains unchanged.  By the end of the second quarter in 2011, UMC's year-to-date CAPEX totaled US$787 million.  

Recent Developments / Announcements

July 27, 2011

Cypress and UMC Deliver ICs on New 65-Nanometer SONOS Embedded Flash Technology

July 26, 2011

UMC Receives Award For Top 100 Recognizable Taiwan Brands

Jun. 15, 2011

UMC Shareholders Approve 2010 Annual Shareholders Meeting Proposals


-Shareholder cash dividend of NT$14,034 million, or approximately NT$1.12 per share


-Employee cash bonus of NT$2,477 million


-Directors' remuneration of NT$21 million

May 10, 2011

UMC Wins Global Views Monthly 2011 Healthy Workplace Award

Apr. 29, 2011

UMC Files Form 20-F for 2010 with US Securities and Exchange Commission

Third Quarter of 2011 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Revenue: Low teen percentage range decline, mostly driven by lower volume
  • Operating Margin: Low single-digit percentage range
  • Capacity utilization: Low 70% range
  • Segments: Consumer and computer segments will outpace the communication sector.

Conference Call / Webcast Announcement

Wednesday, August 3, 2011

Time:

8:00 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 2Q11 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.

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

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  June  30, 2011

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

















June  30, 2011



US$


NT$


%


ASSETS







Current Assets







Cash and Cash Equivalents

1,581


45,383


16.5%


Financial Assets at Fair Value through Profit or Loss, current

31


883


0.3%


Available-for-Sale Financial Assets, current

228


6,537


2.4%


Notes & Accounts Receivable, net

541


15,542


5.6%


Inventories, net

397


11,390


4.1%


Other Current Assets

53


1,526


0.6%


   Total Current Assets

2,831


81,261


29.5%









Non-Current Assets







Funds and Investments

2,211


63,482


23.1%


Property, Plant and Equipment, net

4,321


124,046


45.1%


Other Assets

219


6,305


2.3%


   Total Non-Current Assets

6,751


193,833


70.5%


TOTAL ASSETS

9,582


275,094


100.0%









LIABILITIES







Current Liabilities







Short-term Loans

50


1,438


0.5%


Financial Liabilities at Fair Value through Profit or Loss, current

62


1,784


0.6%


Payables

888


25,500


9.3%


Dividends Payable

489


14,034


5.1%


Current Portion of Long-term Liabilities

190


5,464


2.0%


Other Current Liabilities

18


503


0.2%


   Total Current Liabilities

1,697


48,723


17.7%









Non-Current Liabilities







Bonds Payable

477


13,688


5.0%


Long-term Loans

24


687


0.2%


Other Liabilities

123


3,531


1.3%


   Total Non-Current Liabilities

624


17,906


6.5%


TOTAL LIABILITIES

2,321


66,629


24.2%









STOCKHOLDERS' EQUITY







Capital Stock

4,555


130,762


47.5%


Additional Paid-in Capital

1,610


46,232


16.8%


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

1,313


37,694


13.8%


Treasury Stock

(217)


(6,223)


(2.3%)


TOTAL STOCKHOLDERS' EQUITY

7,261


208,465


75.8%


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

9,582


275,094


100.0%



















































Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2011 exchange rate of NT$ 28.71 per U.S. Dollar.


    All figures are in ROC GAAP.

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



June 30, 2011


June 30, 2010


%


June 30, 2011


March 31, 2011


%


US$


NT$


US$


NT$


Chg.


US$


NT$


US$


NT$


Chg.

Net Sales

980


28,150


1,036


29,745


(5.4%)


980


28,150


979


28,118


0.1%

Cost of Goods Sold

(746)


(21,432)


(729)


(20,940)


2.3%


(746)


(21,432)


(709)


(20,376)


5.2%

Net Gross Profit

234


6,718


307


8,805


(23.7%)


234


6,718


270


7,742


(13.2%)


23.9%


23.9%


29.6%


29.6%




23.9%


23.9%


27.5%


27.5%



Operating Expenses




















 - Sales & Marketing

(20)


(585)


(19)


(553)


5.8%


(20)


(585)


(16)


(452)


29.4%

 - General & Administrative

(20)


(588)


(24)


(679)


(13.4%)


(20)


(588)


(23)


(668)


(12.0%)

 - Research & Development

(78)


(2,225)


(74)


(2,136)


4.2%


(78)


(2,225)


(76)


(2,180)


2.1%


(118)


(3,398)


(117)


(3,368)


0.9%


(118)


(3,398)


(115)


(3,300)


3.0%

Operating Income

116


3,320


190


5,437


(38.9%)


116


3,320


155


4,442


(25.3%)


11.8%


11.8%


18.3%


18.3%




11.8%


11.8%


15.8%


15.8%























Net Non-Operating Income (Expenses)

7


203


4


130


56.2%


7


203


15


432


(53.0%)

Income from Continuing Operations before
  Income Tax

123


3,523


194


5,567


(36.7%)


123


3,523


170


4,874


(27.7%)


12.5%


12.5%


18.7%


18.7%




12.5%


12.5%


17.3%


17.3%























Income Tax Expense

(12)


(331)


(13)


(363)


(8.8%)


(12)


(331)


(14)


(391)


(15.3%)

Income from Continuing Operations

111


3,192


181


5,204


(38.7%)


111


3,192


156


4,483


(28.8%)

Extraordinary Gain

-


-


2


69


(100.0%)


-


-


-


-


-

Net Income

111


3,192


184


5,273


(39.5%)


111


3,192


156


4,483


(28.8%)


11.3%


11.3%


17.7%


17.7%




11.3%


11.3%


15.9%


15.9%























Earnings per Share

0.009


0.26


0.015


0.42




0.009


0.26


0.013


0.36



Earnings per ADS (2)

0.045


1.30


0.073


2.10




0.045


1.30


0.063


1.80



Weighted Average Number of Shares




















Outstanding (in millions)



12,514




12,450






12,514




12,514











































Note:




















(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2011 exchange rate of NT$ 28.71 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 Six-Month Period Ended


June 30, 2011


June 30, 2011


US$


NT$


%


US$


NT$


%

Net Sales

980


28,150


100.0%


1,960


56,268


100.0%

Cost of Goods Sold

(746)


(21,432)


(76.1%)


(1,456)


(41,807)


(74.3%)

Net Gross Profit

234


6,718


23.9%


504


14,461


25.7%

























Operating Expenses












 - Sales & Marketing

(20)


(585)


(2.1%)


(36)


(1,038)


(1.9%)

 - General & Administrative

(20)


(588)


(2.1%)


(44)


(1,256)


(2.2%)

 - Research & Development

(78)


(2,225)


(7.9%)


(154)


(4,405)


(7.8%)


(118)


(3,398)


(12.1%)


(234)


(6,699)


(11.9%)

Operating Income

116


3,320


11.8%


270


7,762


13.8%













Net Non-Operating Income (Expenses)

7


203


0.7%


22


635


1.1%

Income from Continuing Operations before
   Income Tax

123


3,523


12.5%


292


8,397


14.9%

























Income Tax Expense

(12)


(331)


(1.2%)


(25)


(722)


(1.3%)

Net Income

111


3,192


11.3%


267


7,675


13.6%













Earnings per Share

0.009


0.26




0.021


0.61



Earnings per ADS (2)

0.045


1.30




0.106


3.05















Weighted Average Number of Shares
    Outstanding (in millions)



12,514






12,514















Note:












(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2011 exchange rate of NT$ 28.71 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 Six-Month Period Ended June 30, 2011

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






USD


NTD

Cash flows from operating activities :




   Net Income

267


7,675

   Depreciation & Amortization

520


14,915

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

10


280

   Cash dividends received under the equity method

18


525

   Investment gain accounted for under the equity method

13


364

   Gain on valuation of financial assets and liabilities

(6)


(157)

   Impairment loss

5


141

   Gain on disposal of investments

(8)


(218)

   Gain on disposal of property, plant and equipment

(0)


(10)

   Exchange gain on financial assets and liabilities

(0)


(14)

   Exchange gain on long-term liabilities

(3)


(76)

   Amortization of bond discounts

4


129

   Amortization of deferred income

(2)


(54)

   Stock-based payment

16


460

   Changes in assets, liabilities and others

(24)


(699)

Net cash provided by operating activities

810


23,261





Cash flows from investing activities :




   Proceeds from disposal of available-for-sales financial assets

6


174

   Acquisition of financial assets measured at cost

(7)


(196)

   Proceed from sale of financial assets measured at cost

2


50

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

(54)


(1,544)

   Proceeds from liquidation of long-term investments

4


111

   Acquisition of property, plant and equipment

(802)


(23,012)

   Proceeds from disposal of property, plant and equipment

1


22

   Increase in deferred charges

(6)


(186)

   Decrease in other assets - others

(0)


(1)

Net cash used in investing activities

(856)


(24,582)





Cash flows from financing activities :




   Decrease in short-term loans

(43)


(1,234)

   Repayments of long-term loans

(5)


(151)

   Proceeds from bonds issued

502


14,423

   Bonds issue cost

(2)


(58)

   Exercise of employee stock options

32


918

   Proceeds from disposal of treasury stock

0


8

   Decrease in deposits-in

(0)


(7)

Net cash used by financing activities

484


13,899





Effect of exchange rate changes on cash and cash equivalents

(4)


(130)

Net decrease in cash and cash equivalents

434


12,448





Cash and cash equivalents at beginning of period

1,147


32,935





Cash and cash equivalents at end of period

1,581


45,383









Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2011 exchange rate of NT$ 28.71 per U.S. Dollar.

    All figures are in ROC GAAP.

Contacts:

Richard Yu / Bowen Huang / Jason Ho
UMC, Investor Relations
+886-2-2658-9168, ext. 16951 / 16944 / 16970
[email protected] / [email protected] / [email protected]

SOURCE United Microelectronics Corporation

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