UMC Reports Third Quarter 2011 Results

28nm technology platform development accelerating; company to maintain operating profitability despite declining utilization

Oct 26, 2011, 03:03 ET from United Microelectronics Corporation

TAIPEI, Taiwan, Oct. 26, 2011 /PRNewswire-Asia/ --

Third Quarter 2011 Overview (Note 1):

  • Revenue: decreased 10.5% QoQ to NT$25.19 billion (US$ 826.35 million)
  • Gross margin: 19.8%; operating margin: 6.1%
  • Capacity utilization: 74%
  • Net income: NT$1.95 billion (US$ 64.11 million)
  • Earnings per share: NT$0.16; earnings per ADS: US$0.03

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 Sep 30, 2011, the three-month period ending Jun 30, 2011, and the equivalent three-month period that ended Sep 30, 2010. For all 3Q11 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Sep 30, 2011 exchange rate of NT$30.48 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 third quarter of 2011.

Revenue was NT$25.19 billion, a 10.5% quarter-over-quarter decrease from NT$28.15 billion in 2Q11, and a 22.9% year-over-year decrease from NT$32.65 billion in 3Q10.  Gross margin was 19.8%, operating margin was 6.1%, net income was NT$1.95 billion, and earnings per ordinary share were NT$0.16.

Dr. Shih-Wei Sun, CEO of UMC, said: "In Q3 2011, revenue was in line with UMC's guidance. We shipped 1.03 million 8-inch equivalent wafers, with ASP remaining flat. Overall utilization rate was 74%, with 40% of revenue coming from 65nm & below technologies."

Dr. Sun continued "We maintain our previous semiconductor market view as we enter the fourth quarter of 2011, with unresolved European and U.S. sovereign debt, China inflation, and limited inventory distribution and digestion visibility through the supply chain all contributing to industry uncertainty. Accordingly, semiconductor market demand remains weak, as reflected by our customers' conservative order patterns.  During this time, UMC will continue with its cautious approach. We do anticipate UMC's rate of revenue decline to ease in Q4, and will maintain operating profitability as our efforts to strengthen the company's operating efficiency and cost structure bear fruit."

"Despite the dynamic nature of the semiconductor industry, we believe that customer-driven development of advanced processes and IP platforms will form the foundation of UMC's next growth phase. In addition to our volume-production 40nm technologies, we have also invested heavily to develop our 28nm technologies and IP platforms, including the High-K/Metal-Gate 28HPM and the Poly/SiON 28HLP processes. UMC's 28HPM process is developed with the mainstream Gate-Last approach, and is suitable for high performance mobile devices and high-speed networking products. The 28HLP platform delivers industry leading performance-to-cost ratio through the adoption of traditional Poly/SiON gate-stack and proprietary performance enhancement process features. These 28nm technologies are supported with robust IP platforms developed through cross collaboration with ARM, Synopsys, and our customers to create optimized 28nm integrated solutions. Customer 28HLP product has entered pilot production, with 28HPM scheduled for pilot production in mid 2012. We are optimistic about our 28HLP and 28HPM since they form the dual-engine that will propel UMC's advanced process growth, strengthen our future competitiveness, and enhance our portfolio of comprehensive foundry solutions available to UMC customers."

Summary of Operating Results

Operating Results

(Amount: NT$ million)

3Q11

2Q11

QoQ % change

3Q10

YoY % change

Revenue

25,187

28,150

(10.5)

32,652

(22.9)

Gross Profit

4,984

6,718

(25.8)

10,648

(53.2)

Operating Expenses

(3,449)

(3,398)

1.5

(3,461)

(0.3)

Operating Income

1,535

3,320

(53.8)

7,187

(78.6)

Non-Operating Income

445

203

119.2

1,937

(77.0)

Net Income

1,954

3,192

(38.8)

8,720

(77.6)

EPS   (NT$ per share)

0.16

0.26

0.70

      (US$ per ADS)

0.026

0.043

0.115

Revenue decreased 10.5% QoQ to NT$25.19 billion from NT$28.15 billion in 2Q11, and decreased 22.9% YoY from NT$32.65 billion in 3Q10.  Gross profit was NT$4.98 billion, or 19.8% of revenue, compared to NT$6.72 billion, or 23.9% of 2Q11 revenue. Operating income for the quarter was NT$1.54 billion, or 6.1% of revenue, compared to NT$3.32 billion, or 11.8% of 2Q11 revenue.  The QoQ decrease in revenue was mainly due to lower volume.  Net income in 3Q11 was NT$1.95 billion, compared to NT$3.19 billion in 2Q11.

Earnings per ordinary share for the quarter were NT$0.16. Earnings per ADS (Note 2) were US$0.026.  The basic weighted average number of outstanding shares in 3Q11 was 12,606,278,572, compared with 12,513,899,178 shares in 2Q11 and 12,449,924,578 shares in 3Q10.  The diluted weighted average number of outstanding shares was 13,359,501,028 in 3Q11, compared with 13,013,072,483 shares in 2Q11 and 12,569,431,682 shares in 3Q10.  The fully diluted share count on September 30, 2011 was approximately 14,314,979,000.  On September 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)

3Q11

2Q11

QoQ % change

3Q10

YoY % change

Revenue

25,187

28,150

(10.5)

32,652

(22.9)

COGS

(20,203)

(21,432)

(5.7)

(22,004)

(8.2)

 Depreciation

(6,622)

(6,495)

2.0

(6,561)

0.9

 Other Mfg. Costs

(13,581)

(14,937)

(9.1)

(15,443)

(12.1)

Gross Profit

4,984

6,718

(25.8)

10,648

(53.2)

Gross Margin (%)

19.8%

23.9%

32.6%

Total Operating Exp.

(3,449)

(3,398)

1.5

(3,461)

(0.3)

 G&A

(630)

(588)

7.1

(692)

(9.0)

 Sales & Marketing

(535)

(585)

(8.5)

(567)

(5.6)

 R&D

(2,284)

(2,225)

2.7

(2,202)

3.7

Operating Income

1,535

3,320

(53.8)

7,187

(78.6)

Revenue decreased 10.5% QoQ to NT$25.19 billion from NT$28.15 billion in 2Q11 due to reduced shipment volume. Gross profit was NT$4.98 billion, or 19.8% of revenue, compared to NT$6.72 billion, or 23.9% of 2Q11 revenue, reflecting the lower capacity utilization. Total operating expenses increased 1.5% to NT$3.45 billion, mainly due to the increase in R&D expenses for advanced process nodes.  The total R&D expense was 9.1% of revenue in 3Q11.

Non-Operating Income (Expenses)

(Amount: NT$ million)

3Q11

2Q11

3Q10

Net Non-Operating Income

445

203

1,937

Net Interest Income

1

17

30

Net Investment Loss

(473)

(253)

1,778

Gain on Disposal of Investment

(22)

203

460

Exchange Gain

169

29

(111)

Other Gain

770

207

(220)

Net non-operating income during 3Q11 increased QoQ to NT$445 million. Net investment loss was NT$473 million, including a NT$1.5 billion investment loss accounted for under the equity method and NT$1.3 billion of cash dividends received.  Exchange gain was NT$169 million mainly due to the depreciation of the NT dollar.  The increase of the gain from other items was mainly due to the valuation gain from embedded options of exchangeable bonds.

Cash Flow Summary

(Amount: NT$ million)

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

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

Cash Flow from Operations

10,985

10,594

 Net Income

1,954

3,192

 Depreciation & Amortization

7,675

7,598

 Changes in Working Capital

(669)

(793)

 Other

2,025

597

Cash Flow from Investing

(10,559)

(10,108)

 Capital Expenditures

(10,531)

(10,255)

 Other

(28)

147

Cash Flow from Financing

(13,006)

14,019

 Bank Loans

1,763

(1,262)

 ECB Issued

-

14,365

 Employee Stock Option

69

918

 Cash Dividends

(14,034)

-

 Reacquisition of ECB

(804)

-

 Other

-

(2)

Effect of Exchange Rate

665

(153)

Net Cash Flow

(11,915)

14,352

Operating cash inflow was NT$10.99 billion. Free cash flow (Note 3) for 3Q11 was NT$454 million, as CAPEX spending for the quarter was NT$10.53 billion. The NT$13.01 billion of financing cash outflow was mainly from the payment of cash dividends. Net cash outflow was NT$11.92 billion in 3Q11.

Note 3:

Free cash flow = Operating cash flow Capital expenditures

Current Assets

(Amount: NT$ billion)

3Q11

2Q11

3Q10

Cash & Cash Equivalents

33.47

45.38

38.93

Notes & Accounts Receivable

13.99

15.54

18.55

 Days Sales Outstanding

53

51

52

Inventories

11.35

11.39

10.67

 Avg. Inventory Turnover

52

51

44

Total Current Assets

66.80

81.26

78.41

Cash and cash equivalents decreased to NT$33.47 billion due to cash dividend payments in 3Q11.

Liabilities

(Amount: NT$ billion)

3Q11

2Q11

3Q10

Total Current Liabilities

28.16

48.72

41.90

 Accounts Payable

4.94

5.14

6.16

 Short-Term Credit / Bonds

7.35

6.90

8.21

Cash Dividends Payable

-

14.03

-

 Payable on Equipment

4.72

9.03

14.26

 Other

11.15

13.62

13.27

Long-Term Liabilities

15.28

14.38

0.81

Total Liabilities

46.96

66.63

46.2

Debt to Equity

22%

32%

21%

Current liabilities decreased to NT$28.16 billion, mainly due to the payment of NT$14.03 billion in cash dividends to stockholders. Total liabilities decreased to NT$46.96 billion in 3Q11.  The Debt to equity ratio returned to UMC's normal condition.

Analysis of Revenue (Note 4)

Revenue Breakdown by Region

Region

3Q11

2Q11

1Q11

4Q10

3Q10

North America

48%

49%

51%

53%

46%

Asia Pacific

40%

39%

35%

30%

40%

Europe

11%

11%

13%

16%

13%

Japan

1%

1%

1%

1%

1%

Revenue from Asia Pacific contributed 40% of UMC's Q3 revenue, reflecting the relative strength of Asia Pacific based communication customers.

Note 4:

Revenue in this section represents wafer sales.

Revenue Breakdown by Geometry

Geometry

3Q11

2Q11

1Q11

4Q10

3Q10

40nm and below

6%

6%

6%

5%

4%

40nm65nm

34%

31%

29%

30%

26%

65nm90nm

8%

13%

15%

16%

14%

90nm

24%

24%

23%

20%

24%

0.13um

13%

12%

13%

14%

15%

0.18um35um

11%

9%

9%

10%

12%

0.5um and above

4%

5%

5%

5%

5%

Revenue from 65nm and below accounted for 40% of total revenue, with 40nm remaining at 6% of UMC's Q3 revenue.

Revenue Breakdown by Customer Type

Customer Type

3Q11

2Q11

1Q11

4Q10

3Q10

Fabless

81%

73%

72%

73%

78%

IDM

19%

27%

28%

27%

22%

The percentage of revenue from Fabless customers increased from 73% to 81% in 3Q11.

Revenue Breakdown by Application (1)

Application

3Q11

2Q11

1Q11

4Q10

3Q10

Computer

17%

15%

14%

11%

12%

Communication

53%

53%

57%

56%

53%

Consumer

27%

29%

26%

30%

32%

Memory

1%

1%

1%

1%

1%

Others

2%

2%

2%

2%

2%

Revenue from the Computer sector grew to 17% of total 3Q11 revenue mainly due to relatively stronger demand from HDD controller. Weak DTV and STB related demand resulted in decreased Consumer sector revenue contribution for Q3.

Blended Average Selling Price Trend

The blended average selling price (ASP) was flat during 3Q11.

(To view ASP trend, visit http://www.umc.com/english/investors/3Q11_ASP_trend.asp)

Shipment and Utilization Rate (Note 5)

Wafer Shipments

3Q11

2Q11

1Q11

4Q10

3Q10

Wafer Shipments (8" K equivalents)

1,025

1,145

1,120

1,132

1,202

Quarterly Capacity Utilization Rate

3Q11

2Q11

1Q11

4Q10

3Q10

Utilization Rate

74%

87%

90%

94%

>99%

Total Capacity (8" K equivalents)

1,358

1,330

1,259

1,234

1,220

Wafer shipments decreased 10.5% sequentially to 1,025K in 3Q11, compared to 1,145K 8-inch equivalent wafers shipped in 2Q11. Since wafer shipments decreased and wafer capacity increased in Q3, overall utilization rate for the quarter dropped to 74%.

Note 5:

Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Capacity (Note 6)

Capacity during the third quarter was 1,358K 8-inch equivalent wafers. The increase in total capacity is mainly due to advanced capacity expansion at 12" fabs. The estimated installed capacity in 4Q11 will increase to 1,376K 8-inch equivalent wafers.

Annual Capacity in thousands of 8-inch wafer equivalents

Quarterly Capacity in thousands of 8-inch wafer equivalents

FAB

Geometry (um)

2011E

2010

2009

2008

FAB

4Q11E

3Q11

2Q11

1Q11

Fab6A

6"

3.5 – 0.45

303

331

328

328

Fab6A

76

76

76

75

Fab8A

8"

0.5 – 0.25

813

816

816

816

Fab8A

204

204

204

201

Fab8C

8"

0.35 – 0.11

359

366

405

417

Fab8C

90

90

90

89

Fab8D

8"

0.13 – 0.09

364

314

267

257

Fab8D

93

93

93

85

Fab8E

8"

0.5 – 0.18

469

410

408

408

Fab8E

118

119

119

114

Fab8F

8"

0.18 – 0.11

388

388

381

372

Fab8F

98

98

98

96

Fab8S

8"

0.18 – 0.11

307

304

300

291

Fab8S

79

77

77

75

Fab12A

12"

0.18 – 0.040

1,128

841

866

876

Fab12A

316

300

278

234

Fab12i

12"

0.13 – 0.065

1,192

1,021

815

742

Fab12i

302

302

296

291

Total (1)

5,322

4,791

4,586

4,507

Total

1,376

1,358

1,330

1,259

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.

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.

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

15%

85%

Approximately US$1.8 billion

The capital expenditure budget remains unchanged. By the end of the third quarter, UMC's year-to-date CAPEX totaled US$1.1 billion.  

Recent Developments / Announcements

Oct. 12, 2011

UMC and Synopsys Collaborate to Develop DesignWare IP for 28-nanometer Technology

Oct. 6, 2011

ARM and UMC Extend Long-Term IP Partnership into 28nm

Sep. 13, 2011

UMC Delivers Foundry Industry's Most Compact MTP IP Solution

Sep. 8, 2011

UMC Selected as a DJSI Global Component for Fourth Consecutive Year

Aug. 30, 2011

UMC Delivers High Endurance, Variable Voltage Range Embedded EEPROM Solution

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

Fourth Quarter of 2011 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Wafer shipment: Approximately 10% decrease
  • Wafer ASP in NT$: Approximately 5% increase
  • Operating Margin: Low single-digit percentage range
  • Capacity utilization: Mid to high 60% range
  • Segments: Communication segment will outpace consumer and computer segments

Conference Call / Webcast Announcement

Wednesday, October 26, 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 3Q11 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.

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  September  30, 2011

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

September  30, 2011

US$

NT$

%

ASSETS

Current Assets

Cash and Cash Equivalents

1,098

33,468

13.1%

Financial Assets at Fair Value through Profit or Loss, current

24

720

0.3%

Available-for-Sale Financial Assets, current

187

5,689

2.2%

Notes & Accounts Receivable, net

459

13,986

5.5%

Inventories, net

372

11,347

4.4%

Other Current Assets

52

1,591

0.6%

   Total Current Assets

2,192

66,801

26.1%

Non-Current Assets

Funds and Investments

1,916

58,397

22.8%

Property, Plant and Equipment, net

4,085

124,522

48.6%

Other Assets

207

6,318

2.5%

   Total Non-Current Assets

6,208

189,237

73.9%

TOTAL ASSETS

8,400

256,038

100.0%

LIABILITIES

Current Liabilities

Short-term Loans

50

1,527

0.6%

Financial Liabilities at Fair Value through Profit or Loss, current

39

1,201

0.5%

Payables

628

19,136

7.5%

Current Portion of Long-term Liabilities

191

5,819

2.3%

Other Current Liabilities

16

475

0.1%

   Total Current Liabilities

924

28,158

11.0%

Non-Current Liabilities

Bonds Payable

423

12,892

5.0%

Long-term Loans

78

2,392

0.9%

Other Liabilities

116

3,520

1.4%

   Total Non-Current Liabilities

617

18,804

7.3%

TOTAL LIABILITIES

1,541

46,962

18.3%

STOCKHOLDERS' EQUITY

Capital Stock

4,292

130,828

51.1%

Additional Paid-in Capital

1,523

46,440

18.1%

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

1,248

38,031

14.9%

Treasury Stock

(204)

(6,223)

(2.4%)

TOTAL STOCKHOLDERS' EQUITY

6,859

209,076

81.7%

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

8,400

256,038

100.0%

Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2011 exchange rate of NT $30.48 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

September 30, 2011

September 30, 2010

%

September 30, 2011

June 30, 2011

%

US$

NT$

US$

NT$

Chg.

US$

NT$

US$

NT$

Chg.

Net Sales

826

25,187

1,071

32,652

(22.9%)

826

25,187

924

28,150

(10.5%)

Cost of Goods Sold

(662)

(20,203)

(722)

(22,004)

(8.2%)

(662)

(20,203)

(704)

(21,432)

(5.7%)

Net Gross Profit

164

4,984

349

10,648

(53.2%)

164

4,984

220

6,718

(25.8%)

19.8%

19.8%

32.6%

32.6%

19.8%

19.8%

23.9%

23.9%

Operating Expenses

  - Sales & Marketing

(18)

(535)

(18)

(567)

(5.6%)

(18)

(535)

(19)

(585)

(8.5%)

  - General & Administrative

(21)

(630)

(23)

(692)

(9.0%)

(21)

(630)

(19)

(588)

7.1%

  - Research & Development

(75)

(2,284)

(72)

(2,202)

3.7%

(75)

(2,284)

(73)

(2,225)

2.7%

(114)

(3,449)

(113)

(3,461)

(0.3%)

(114)

(3,449)

(111)

(3,398)

1.5%

Operating Income

50

1,535

236

7,187

(78.6%)

50

1,535

109

3,320

(53.8%)

6.1%

6.1%

22.0%

22.0%

6.1%

6.1%

11.8%

11.8%

Net Non-Operating Income (Expenses)

15

445

63

1,937

(77.0%)

15

445

7

203

100.0%

Income from Continuing Operations before Income Tax

65

1,980

299

9,124

(78.3%)

65

1,980

116

3,523

(43.8%)

7.9%

7.9%

27.9%

27.9%

7.9%

7.9%

12.5%

12.5%

Income Tax Expense

(1)

(26)

(13)

(404)

(93.6%)

(1)

(26)

(11)

(331)

(92.1%)

Income from Continuing Operations

64

1,954

286

8,720

(77.6%)

64

1,954

105

3,192

(38.8%)

Extraordinary Gain

-

-

-

-

-

-

-

-

-

-

Net Income

64

1,954

286

8,720

(77.6%)

64

1,954

105

3,192

(38.8%)

7.8%

7.8%

26.7%

26.7%

7.8%

7.8%

11.3%

11.3%

Earnings per Share

0.005

0.16

0.023

0.70

0.005

0.16

0.009

0.26

Earnings per ADS (2)

0.026

0.80

0.115

3.50

0.026

0.80

0.043

1.30

Weighted Average Number of Shares

Outstanding (in millions)

12,606

12,450

12,606

12,514

Note:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2011 exchange rate of NT $30.48 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 Nine-Month Period Ended

September 30, 2011

September 30, 2011

US$

NT$

%

US$

NT$

%

Net Sales

826

25,187

100.0%

2,672

81,454

100.0%

Cost of Goods Sold

(662)

(20,203)

(80.2%)

(2,034)

(62,009)

(76.1%)

Net Gross Profit

164

4,984

19.8%

638

19,445

23.9%

Operating Expenses

 - Sales & Marketing

(18)

(535)

(2.1%)

(52)

(1,573)

(2.0%)

 - General & Administrative

(21)

(630)

(2.5%)

(62)

(1,886)

(2.3%)

 - Research & Development

(75)

(2,284)

(9.1%)

(219)

(6,689)

(8.2%)

(114)

(3,449)

(13.7%)

(333)

(10,148)

(12.5%)

Operating Income

50

1,535

6.1%

305

9,297

11.4%

Net Non-Operating Income (Expenses)

15

445

1.8%

35

1,080

1.3%

Income from Continuing Operations before    Income Tax

65

1,980

7.9%

340

10,377

12.7%

Income Tax Expense

(1)

(26)

(0.1%)

(24)

(748)

(0.9%)

Net Income

64

1,954

7.8%

316

9,629

11.8%

Earnings per Share

0.005

0.16

0.025

0.77

Earnings per ADS (2)

0.026

0.80

0.126

3.85

Weighted Average Number of Shares     Outstanding (in millions)

12,606

12,545

Note:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2011 exchange rate of NT $30.48 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 Nine-Month Period Ended September 30, 2011

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

USD

NTD

Cash flows from operating activities :

   Net Income

316

9,629

   Depreciation & Amortization

741

22,591

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

15

466

   Cash dividends received under the equity method

19

585

   Investment loss accounted for under the equity method

62

1,897

   Gain on valuation of financial assets and liabilities

(21)

(633)

   Impairment loss

9

283

   Gain on disposal of investments

(6)

(197)

   Gain on disposal of property, plant and equipment

(1)

(29)

   Exchange loss on financial assets and liabilities

3

81

   Exchange loss on long-term liabilities

8

231

   Amortization of bond discounts

7

215

   Gain on reacquisition of bonds

(2)

(70)

   Amortization of deferred income

(2)

(76)

   Stock-based payment

21

638

   Changes in assets, liabilities and others

(45)

(1,365)

Net cash provided by operating activities

1,124

34,246

Cash flows from investing activities :

   Proceeds from disposal of available-for-sales financial assets

5

174

   Acquisition of financial assets measured at cost

(6)

(196)

   Proceed from sale of financial assets measured at cost

1

50

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

(51)

(1,544)

   Proceeds from liquidation of long-term investments

4

111

   Acquisition of property, plant and equipment

(1,100)

(33,543)

   Proceeds from disposal of property, plant and equipment

1

39

   Increase in deferred charges

(6)

(198)

   Decrease in other assets - others

(1)

(33)

Net cash used in investing activities

(1,153)

(35,140)

Cash flows from financing activities :

   Decrease in short-term loans

(38)

(1,163)

   Proceeds from long-term loans

59

1,800

   Repayments of long-term loans

(8)

(258)

   Acquisition of bonds

(26)

(804)

   Proceeds from bonds issued

473

14,423

   Bonds issue cost

(2)

(61)

   Cash dividends

(461)

(14,034)

   Exercise of employee stock options

32

986

   Proceeds from disposal of treasury stock

0

14

   Decrease in deposits-in

(0)

(11)

Net cash provided by financing activities

29

892

Effect of exchange rate changes on cash and cash equivalents

17

535

Net increase in cash and cash equivalents

17

533

Cash and cash equivalents at beginning of period

1,081

32,935

Cash and cash equivalents at end of period

1,098

33,468

Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2011 exchange rate of NT $30.48 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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