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UMC Reports Second Quarter 2014 Results

28nm Moves to Mass Production with Increasing Momentum in 2H14

TAIPEI, July 30, 2014 /PRNewswire/ --

Second Quarter 2014 Overview[1]:

  • Revenue: NT$35.87 billion (US$1.20 billion)
  • Gross margin: 22.9%; operating margin: 8.1%
  • Foundry capacity utilization rate: 90%
  • Net income attributable to the stockholders of the parent: NT$3.48 billion (US$117 million)
  • Earnings per share: NT$0.28; earnings per ADS: US$0.047

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 2014.

Revenue was NT$35.87 billion, with gross margin at 22.9% and operating margin at 8.1%. Net income attributable to the stockholders of the parent was NT$3.48 billion, with earnings per ordinary share of NT$0.28.

Mr. Po-Wen Yen, CEO of UMC, said "In the second quarter of 2014, UMC recorded NT$32.57 billion in revenue from the foundry segment, with operating margin from foundry operations of 10.2%. Wafer shipments reached 1.426 million 8-inch equivalent wafers. Our 28nm business represented 1% of revenue, while 40nm accounted for 21%."

CEO Yen added, "Second quarter foundry revenue grew 13.4% sequentially, fueled by strong communication segment demand that lifted capacity utilization to 90%. Market conditions also reflected a turnaround, with rising demand for portable computing devices helping to drive our 28nm shipments. We project continued 28nm revenue contribution growth in 3Q14 as a result of the sustained demand for mobile and tablet computing. We are optimistic in the long term that our 28nm production ramp will strengthen our overall product mix and generate abundant opportunities for UMC to win additional foundry market share. For other technologies, we have strengthened the IP portfolio for our 55nm LP platform to address low power and wireless applications by offering Kilopass' Gusto and Cypress's SONOS embedded flash memories. These enhanced IP solutions will further diversify our manufacturing offerings to fulfill a broader range of specialty technology products on our proven and versatile 55LP platform. Designers in wearable and Internet of Things (IoT) applications have already realized product tape-outs using our 55LP technologies and IP."

CEO Yen continued, "We expect the semiconductor demand strength to continue into the third quarter of 2014. For 28nm momentum, our activities have increased, including IP verifications, customer tape outs on standalone products and product reliability qualifications. These 28nm customer collaborations will provide further traction heading into the second half of 2014. UMC will continue to broaden our customer base and penetrate additional high growth areas to expand customer adoption. We remain confident for the long term, as our sound business strategies, solid engineering execution and strong commitment to customer service will help ensure UMC's future business growth and deliver enhanced profitability to raise shareholder value."

[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 Jun 30, 2014, the three-month period ending Mar 31, 2014, and the equivalent three-month period that ended Jun 30, 2013. For all 2Q14 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Jun 30, 2014 exchange rate of NT$ 29.86 per U.S. Dollar.

Summary of Operating Results

 

Operating Results

(Amount: NT$ million)

   2Q14

  1Q14

QoQ %
change

2Q13

YoY %
change

Net Operating Revenues

35,869

31,694

13.2

31,905

12.4

Gross Profit

8,207

5,901

39.1

6,177

32.9

Operating Expenses

(5,280)

(5,016)

5.3

(5,017)

5.2

Net Other Operating Income and Expenses

(10)

56

-

(11)

(9.1)

Operating Income

2,917

941

210.0

1,149

153.9

Net Non-Operating Income and Expenses

937

351

167.0

631

48.5

Net Income Attributable to the Stockholders of the Parent

3,482

1,180

195.1

1,812

92.2

EPS   (NT$ per share)

0.28

0.09


0.15


         (US$ per ADS[2])

0.047

0.015


0.025


[2] One ADS represents five Taiwan-listed ordinary shares.

Revenue increased 13.2% QoQ to NT$35.87 billion from NT$31.69 billion in 1Q14, and increased 12.4% YoY from NT$31.91 billion in 2Q13. Gross profit was NT$8.21 billion, or 22.9% of revenue, compared to NT$5.90 billion, or 18.6% of 1Q14 revenue. Operating income for the quarter was NT$2.92 billion, or 8.1% of revenue, compared to operating income of NT$0.94 billion, or 3.0% of 1Q14 revenue. Net income attributable to the stockholders of the parent in 2Q14 was NT$3.48 billion, compared to NT$1.18 billion in 1Q14.

Earnings per ordinary share for the quarter were NT$0.28. Earnings per ADS were US$0.047. The basic weighted average number of outstanding shares in 2Q14 was 12,489,095,718, compared with 12,479,924,736 shares in 1Q14 and 12,464,972,126 shares in 2Q13. The diluted weighted average number of outstanding shares was 12,607,860,758 in 2Q14, compared with 13,157,984,032 shares in 1Q14 and 13,236,433,274 shares in 2Q13. The fully diluted share count on June 30, 2014 was approximately 12,782,196,000. On June 30, 2014, UMC held 200 million treasury shares acquired from the 15th share buy-back programs.

Detailed Financials Section

Revenue increase was mainly driven by foundry wafer shipment growth. Depreciation increased 6.3% QoQ to NT$8.66 billion, mainly due to the deployment of new 28nm tools at Fab 12A. Other manufacturing costs rose 7.7% sequentially from the increase in wafer shipments. Gross margin increased to 22.9% sequentially, to NT$8.21 billion. Sales & Marketing expenses rose to NT$1.10 billion, including the increase in mask and IP expenses. Research and development expenses was NT$3.33 billion, 9.3% of operating revenues.

COGS & Expenses

(Amount: NT$ million)

2Q14

1Q14

QoQ %
change

2Q13

YoY %
change

Net Operating Revenues

35,869

31,694

13.2

31,905

12.4

COGS

(27,662)

(25,793)

7.2

(25,728)

7.5

  Depreciation

(8,662)

(8,145)

6.3

(8,546)

1.4

  Other Mfg. Costs

(19,000)

(17,648)

7.7

(17,182)

10.6

Gross Profit

8,207

5,901

39.1

6,177

32.9

Gross Margin (%)

22.9%

18.6%


19.4%


Operating Expenses

(5,280)

(5,016)

5.3

(5,017)

5.2

  G&A

(857)

(848)

1.1

(966)

(11.3)

  Sales & Marketing

(1,097)

(833)

31.7

(800)

37.1

  R&D

(3,326)

(3,335)

(0.3)

(3,251)

2.3

Net Other Operating

Income & Expenses

(10)

56

-

(11)

(9.1)

Operating Income

2,917

941

210.0

1,149

153.9

Net non-operating income in 2Q14 was NT$937 million. Net interest expenses was NT$149 million, primarily from the redemption of bonds during 2Q14. The investment disposal gains were NT$792 million, including a NT$416 million gain from the sale of Epistar shares.

Non-Operating Income and Expenses

(Amount: NT$ million)

2Q14

1Q14

2Q13

Non-Operating Income and Expenses

937

351

631

Net Interest Income and Expenses

(149)

(23)

(83)

Net Investment Gain and Loss

188

(110)

(33)

Gain and Loss on Disposal of Investment

792

367

671

Exchange Gain and Loss  

(4)

22

(11)

Other Gain and Loss

110

95

87

Cash flow from operations generated NT$7.68 billion. CAPEX spending was NT$7.89 billion, including NT$7.75 billion from the foundry segment, resulting in free cash outflow of NT$204 million during 2Q14. Cash outflow from financing activities was NT$4.42 billion mainly due to the net redemption effect of NT$10.25 billion in bonds and issuance of NT$5.00 billion in new domestic bonds. Total cash outflow was NT$4.30 billion in 2Q14. Over the next 12 months, the company expects to repay NT$4.15 billion in bank loans.

Cash Flow Summary

(Amount: NT$ million)

For the 3-Month Period 

Ended Jun. 30, 2014

For the 3-Month Period

 Ended Mar. 31, 2014

Cash Flow from Operating Activities

7,681

6,232

  Net Income before tax

3,854

1,292

  Depreciation & Amortization

9,949

9,850

Share of profit or loss of associates and joint ventures

(132)

35

Gain on disposal of investments

(792)

(367)

  Changes in Working Capital

(5,002)

(4,746)

  Other

(196)

168

Cash Flow from Investing Activities

(7,032)

(6,100)

  Capital Expenditures

(7,885)

(6,277)

Proceeds from disposal of available-for-sale financial assets

1,102

529

Acquisition of intangible assets

(428)

(175)

  Other

179

(177)

Cash Flow from Financing Activities

(4,423)

2,395

  Bank Loans

755

2,325

Bonds Issued

5,000

-

Redemption of Bonds

(10,249)

(57)

  Other

71

127

Effect of Exchange Rate Changes

 on Cash and Cash Equivalents

(523)

573

Net Increase(Decrease) in Cash and Cash Equivalents

(4,297)

3,100

Cash and Cash Equivalents of Disposal Group included in Non-Current Assets Held for Sale

-

(16)

Total Increase(Decrease) in Cash and Cash Equivalents

(4,297)

3,084

Cash and cash equivalents decreased to NT$49.63 billion, reflecting CAPEX and bond redemption in 2Q14. Days of inventory decreased by three days to 47 days in 2Q14.

Current Assets

(Amount: NT$ billion)

2Q14

1Q14

 2Q13

Cash and Cash Equivalents

49.63

53.92

50.65

Notes & Accounts Receivable

21.62

18.89

19.38

  Days Sales Outstanding

52

51

53

Inventories, net

13.84

14.42

14.33

  Days of Inventory

47

50

51

Total Current Assets

98.37

96.75

92.90

Current liabilities increased to NT$49.68 billion mainly due to the increase in payables on equipment acquisition and other current liabilities including increased accrual for dividend distribution of 2013. Debt to equity ratio increased to 41%.

Liabilities

(Amount: NT$ billion)

2Q14

1Q14

2Q13

Total Current Liabilities

49.68

49.24

57.62

  Notes & Accounts Payable

6.85

7.15

7.17

  Short-Term Credit / Bonds

15.75

24.42

23.51

  Payables on Equipment

7.19

4.82

7.59

  Other

19.89

12.85

19.35

Long-Term Credit / Bonds

31.92

27.66

28.54

Total Liabilities

88.69

83.85

93.19

Debt to Equity

41%

39%

44%

Analysis of Revenue[3] for Foundry Segment

Revenue from Asia Pacific and Japan increased from 48% to 52% of sales, mainly due to stronger demand from Asia Pacific and Japan based communication and computer customers.

Revenue Breakdown by Region

Region

2Q14

1Q14

4Q13

3Q13

2Q13

North America

43%

45%

47%

43%

47%

Asia Pacific

46%

45%

41%

44%

42%

Europe

5%

7%

8%

7%

8%

Japan

6%

3%

4%

6%

3%

28nm node represented 1% of revenue. 40nm revenue continued to grow and contributed 21% of foundry sales. 40nm and below technologies accounted for 22% of sales in 2Q14.

Revenue Breakdown by Geometry

Geometry

2Q14

1Q14

4Q13

3Q13

2Q13

28nm and below

1%

0%

0%

0%

0%

40nm <x<=28nm

21%

20%

24%

20%

20%

40nm<x<=65nm

31%

31%

29%

34%

31%

65nm<x<=90nm

6%

7%

7%

6%

6%

90nm<x<=0.13um

13%

14%

14%

16%

15%

0.13um<x<=0.18um

13%

12%

12%

11%

13%

0.18um<x<=0.35um

12%

12%

11%

10%

11%

0.5um and above

3%

4%

3%

3%

4%

The percentage of revenue from IDM customers increased to 10%.

Revenue Breakdown by Customer Type

Customer Type

2Q14

1Q14

4Q13

3Q13

2Q13

Fabless

90%

92%

89%

86%

90%

IDM

10%

8%

11%

14%

10%

Communication segment accounted for 49%, reflecting strong demand in mobile applications.

Revenue Breakdown by Application (1)

Application

2Q14

1Q14

4Q13

3Q13

2Q13

Computer

18%

18%

15%

16%

18%

Communication

49%

46%

49%

52%

51%

Consumer

29%

31%

31%

28%

28%

Others

4%

5%

5%

4%

3%

(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.

[3] Revenue in this section represents wafer sales

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) remained flat in 2Q14.

(To view ASP trend, visit http://www.umc.com/english/investors/2Q14_ASP_trend.asp )

Shipment and Utilization Rate[4] for Foundry Segment

Wafer shipments increased 13.4% QoQ to 1,426K in 2Q14, compared to 1,258K 8-inch equivalent wafers shipped in 1Q14. Overall utilization rate for the quarter was 90%.

Wafer Shipments


2Q14

1Q14

4Q13

3Q13

2Q13

Wafer Shipments
(8" K equivalents)

1,426

1,258

1,236

1,329

1,307


Quarterly Capacity Utilization Rate


2Q14

1Q14

4Q13

3Q13

2Q13

Utilization Rate

90%

81%

79%

87%

85%

Total Capacity
(8" K equivalents)

1,597

1,563

1,560

1,548

1,537

[4] Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Capacity[5] for Foundry Segment

Capacity during the second quarter was 1,597K 8-inch equivalent wafers. The incremental increase in 34K 8-inch equivalent wafers during 2Q14 was primarily due to capacity expansion at Fab 12A, Fab 12i and Fab 8N. UMC's estimated capacity in 3Q14 will be 1,586K 8-inch equivalent wafers, due to the change in capacity profile at Fab 8D and capacity upgrades at Fab 12i.

Annual Capacity in

thousands of wafers


Quarterly Capacity in

thousands of wafers

FAB

Geometry
(um)

2013

2012

2011

2010


FAB

3Q14E

2Q14

1Q14

4Q13

Fab6A

6"

3.5 – 0.45

448

481

538

588


Fab6A

113

113

111

113

Fab8A

8"

0.5 – 0.25

813

815

813

816


Fab8A

204

204

201

204

Fab8C

8"

0.35 – 0.11

347

360

359

366


Fab8C

87

87

86

87

Fab8D

8"

0.13 – 0.09

382

371

364

314


Fab8D

86

93

94

96

Fab8E

8"

0.5 – 0.18

418

449

469

410


Fab8E

105

105

103

105

Fab8F

8"

0.18 – 0.11

388

389

388

388


Fab8F

98

98

96

98

Fab8S

8"

0.18 – 0.11

335

348

307

304


Fab8S

84

84

83

84

Fab8N

8"

0.5 – 0.13

469

-

-

-


Fab8N

140

140

126

128

Fab12A

12"

0.18 – 0.028

651

579

501

374


Fab12A

174

174

171

164

Fab12i

12"

0.13 – 0.040

550

537

530

454


Fab12i

145

147

145

145

Total(1) 

6,107

5,514

5,322

4,791


Total

1,586

1,597

1,563

1,560

YoY Growth Rate

11%

4%

11%

4%


2010~2012 figures account for UMC parent company only.

(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.

[5] Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

CAPEX for Foundry Segment

The foundry capital expenditure for 2014 will be US$1.3 billion. Spending during the first half of 2014 in the foundry segment was US$462 million.

Capital Expenditure by Year - in US$ billion

Year

2013

2012

2011

2010

2009

CAPEX

$ 1.1

$ 1.7

$ 1.6

$ 1.8

$ 0.55

2009~2012 figures account for UMC parent company only.

2014 CAPEX Plan

8"

12"

Total

13%

87%

US$ 1.3 billion

Third Quarter of 2014 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Foundry Segment Wafer Shipments: To increase by low single-digit percentage range
  • Foundry Segment ASP in US$: To remain flat
  • Foundry Segment Profitability: Gross profit margin will be in the mid-20 percentage range
  • Foundry Segment Capacity Utilization: Low-90% range
  • 2014 CAPEX for Foundry Segment: US$1.3bn
  • Guidance to New Business Segment: Revenue to be approximately NT$1.2bn and net loss attributable to UMC parent company to be approximately NT$760mn

Recent Developments / Announcements

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

Conference Call / Webcast Announcement

Wednesday, July 30, 2014

Time:

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


Dial-in numbers and Access Codes:

USA Toll Free:

1-800 871-3110, 1-888 700-7397

Taiwan Number:

02-2192-8016

Other Areas:

+886-2-2192-8016

Access Code:

UMC

A live webcast and replay of the 2Q14 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 technology and manufacturing for applications spanning every major sector of the IC industry. UMC's robust foundry solutions allow chip designers to leverage the company's leading-edge processes, which include 28nm poly-SiON and gate-last High-K/Metal Gate technology, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i. Fab 12A consists of Phases 1-4 which are in production for customer products down to 28nm. Construction has been completed for Phases 5&6, with future plans for Phases 7&8. The company employs over 15,000 people worldwide and has offices in Taiwan, mainland 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 future outsourcing, wafer capacity, technologies, business relationships and market conditions.  Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its registration statements and reports on Forms F-1, F-3, F-6 and 20-F and 6-K, 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

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 and reports on Form F-1, F-3, F-6 and 20-F and 6-K, 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 prepared and published in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from 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 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 AND SUBSIDIARIES  

 Consolidated Condensed Balance Sheet

As of  June 30, 2014

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




June 30, 2014


US$


NT$


%

Assets






Current assets






 Cash and cash equivalents

1,662


49,634


16.3%

 Financial assets at fair value through profit or loss, current

29


880


0.3%

Available-for-sale financial assets, current

91


2,729


0.9%

 Notes & Accounts receivable, net

724


21,616


7.1%

 Inventories, net

464


13,844


4.6%

 Other current assets

324


9,671


3.2%

 Total current assets

3,294


98,374


32.4%







Non-current assets






 Funds and investments

1,184


35,364


11.6%

 Property, plant and equipment

5,258


157,002


51.7%

 

 Other non-current assets

438


13,058


4.3%

 

    Total non-current assets

6,880


205,424


67.6%

 

Total assets

10,174


303,798


100.0%








Liabilities






Current liabilities






 Short-term loans

266


7,954


2.6%

 Financial liabilities at fair value through profit or loss, current

0


4


0.0%

Payables

1,100


32,852


10.8%

 Dividends payable

4


125


0.0%

Current portion of long-term liabilities

261


7,798


2.6%

 Other current liabilities

33


946


0.4%

 Total current liabilities

1,664


49,679


16.4%







Non-current liabilities






 Bonds payable

836


24,976


8.2%

 Long-term loans

233


6,947


2.3%

 Other non-current liabilities

237


7,083


2.3%

 Total non-current liabilities

1,306


39,006


12.8%

 Total liabilities

2,970


88,685


29.2%







Equity






Equity attributable to the parent company






Capital

4,255


127,063


41.8%

Additional paid-in capital

1,320


39,402


13.0%

Retained earnings, unrealized gain or loss on available-for-sale
    financial assets and exchange differences on translation of
    foreign operations

1,569


46,872


15.4%

Treasury stock

(79)


(2,365)


(0.8%)

Total equity attributable to the parent company

7,065


210,972


69.4%

Non-controlling interests

139


4,141


1.4%

  Total equity

7,204


215,113


70.8%

Total liabilities and equity

10,174


303,798


100.0%







NoteNew Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2014 exchange rate of NT $29.86 per U.S. Dollar.


All figures are prepared in accordance with TIFRSs.

 

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, 2014


June 30, 2013


%


June 30, 2014


March 31, 2014


%


US$


NT$


US$


NT$


Chg.


US$


NT$


US$


NT$


Chg.

Net operating revenues

1,201


35,869


1,068


31,905


12.4%


1,201


35,869


1,061


31,694


13.2%

Operating costs

(926)


(27,662)


(861)


(25,728)


7.5%


(926)


(27,662)


(863)


(25,793)


7.2%

Gross profit

275


8,207


207


6,177


32.9%


275


8,207


198


5,901


39.1%


22.9%


22.9%


19.4%


19.4%




22.9%


22.9%


18.6%


18.6%



Operating expenses




















  - Sales and marketing expenses

(37)


(1,097)


(27)


(800)


37.1%


(37)


(1,097)


(28)


(833)


31.7%

  - General and administrative expenses

(29)


(857)


(33)


(966)


(11.3%)


(29)


(857)


(28)


(848)


1.1%

  - Research and development expenses

(111)


(3,326)


(109)


(3,251)


2.3%


(111)


(3,326)


(112)


(3,335)


(0.3%)

      Subtotal

(177)


(5,280)


(169)


(5,017)


5.2%


(177)


(5,280)


(168)


(5,016)


5.3%

Net other operating income and expenses

(0)


(10)


(0)


(11)


(9.1%)


(0)


(10)


2


56


-

Operating income

98


2,917


38


1,149


100.0%


98


2,917


32


941


100.0%


8.1%


8.1%


3.6%


3.6%




8.1%


8.1%


3.0%


3.0%























Net non-operating income and expenses

31


937


22


631


48.5%


31


937


11


351


100.0%

Income from continuing operations before
   income tax

129


3,854


60


1,780


100.0%


129


3,854


43


1,292


100.0%


10.7%


10.7%


5.6%


5.6%




10.7%


10.7%


4.1%


4.1%























Income tax expense

(18)


(528)


(2)


(42)


100.0%


(18)


(528)


(6)


(181)


100.0%

Net income

111


3,326


58


1,738


91.4%


111


3,326


37


1,111


100.0%


9.3%


9.3%


5.4%


5.4%




9.3%


9.3%


3.5%


3.5%























Other comprehensive income

4


103


12


350


(70.6%)


4


103


139


4,130


(97.5%)





















Total comprehensive income

115


3,429


70


2,088


64.2%


115


3,429


176


5,241


(34.6%)





















    Net income attributable to:




















Stockholders of the parent

117


3,482


61


1,812


92.2%


117


3,482


40


1,180


100.0%

Non-controlling interests

(6)


(156)


(3)


(74)


100.0%


(6)


(156)


(3)


(69)


100.0%





















    Comprehensive income attributable to:




















Stockholders of the parent

122


3,636


72


2,160


68.3%


122


3,636


176


5,261


(30.9%)

Non-controlling interests

(7)


(207)


(2)


(72)


100.0%


(7)


(207)


(0)


(20)


100.0%





















Earnings per share-basic

0.009


0.28


0.005


0.15




0.009


0.28


0.003


0.09



Earnings per ADS (2)

0.047


1.40


0.025


0.75




0.047


1.40


0.015


0.45



Weighted average number of shares




















outstanding (in millions)



12,489




12,465






12,489




12,480











































Notes:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2014 exchange rate of NT $29.86 per U.S. Dollar.









     All figures are prepared in accordance with TIFRSs.

(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, 2014


June 30, 2014


US$


NT$


%


US$


 NT$ 


%

Net operating revenues

1,201


35,869


100.0%


2,263


67,563


100.0%

Operating costs

(926)


(27,662)


(77.1%)


(1,791)


(53,455)


(79.1%)

Gross profit

275


8,207


22.9%


472


14,108


20.9%

























Operating expenses












  - Sales and marketing expenses

(37)


(1,097)


(3.0%)


(65)


(1,931)


(2.9%)

  - General and administrative expenses

(29)


(857)


(2.4%)


(57)


(1,705)


(2.5%)

  - Research and development expenses

(111)


(3,326)


(9.3%)


(223)


(6,660)


(9.8%)

      Subtotal

(177)


(5,280)


(14.7%)


(345)


(10,296)


(15.2%)

Net other operating income and expenses

(0)


(10)


(0.1%)


2


45


0.0%

Operating income

98


2,917


8.1%


129


3,857


5.7%













Net non-operating income and expenses

31


937


2.6%


43


1,289


1.9%

Income from continuing operations before
   income tax

129


3,854


10.7%


172


5,146


7.6%

























Income tax expense

(18)


(528)


(1.4%)


(23)


(709)


(1.0%)

Net income 

111


3,326


9.3%


149


4,437


6.6%













Other comprehensive income

4


103


0.3%


141


4,233


6.2%













Total comprehensive income

115


3,429


9.6%


290


8,670


12.8%













    Net income attributable to:












Stockholders of the parent

117


3,482


9.7%


156


4,662


6.9%

Non-controlling interests

(6)


(156)


(0.4%)


(7)


(225)


(0.3%)













    Comprehensive income attributable to:












Stockholders of the parent

122


3,636


10.1%


298


8,897


13.2%

Non-controlling interests

(7)


(207)


(0.5%)


(8)


(227)


(0.4%)













Earnings per share-basic

0.009


0.28




0.012


0.37



Earnings per ADS (2)

0.047


1.40




0.062


1.85















Weighted average number of shares
     outstanding (in millions)



12,489






12,485















Notes:

(1) New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2014 exchange rate of NT $29.86 per U.S. Dollar.

     All figures are prepared in accordance with TIFRSs.

(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, 2014

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






USD


NTD

Cash flows from operating activities :




    Net income before tax

172


5,146

    Depreciation & Amortization

663


19,799

    Impairment loss on financial assets

5


163

    Gain on disposal of investments

(39)


(1,159)

    Changes in notes & accounts receivable

(165)


(4,916)

    Changes in other current assets

(155)


(4,642)

    Changes in assets, liabilities and others

(15)


(478)

Net cash provided by operating activities

466


13,913





Cash flows from investing activities :




    Acquisition of available-for-sales financial assets

(4)


(115)

    Proceeds from disposal of available-for-sale financial assets

55


1,631

    Acquisition of financial assets measured at cost

(16)


(464)

    Proceed from sale of financial assets measured at cost

16


478

    Acquisition ofinvestments accounted for under the equity method

(4)


(121)

    Acquisition of property, plant and equipment

(474)


(14,162)

    Proceeds from disposal of property, plant and equipment 

8


252

    Acquisition of intangible assets

(20)


(603)

    Others

(1)


(28)

Net cash used in investing activities

(440)


(13,132)





Cash flows from financing activities :




    Increase in short-term loans

112


3,335

    Proceeds from bonds issued

167


5,000

    Redemption of bonds

(345)


(10,306)

    Proceeds from long-term loans

33


1,000

    Repayments of long-term loans

(42)


(1,256)

    Others

7


199

Net cash used in financing activities

(68)


(2,028)





Effect of exchange rate changes on cash and cash equivalents

2


50

Net decrease in cash and cash equivalents

(40)


(1,197)





Cash and cash equivalents at beginning of period

1,702


50,831





Cash and cash equivalents at end of period

1,662


49,634



Note: New Taiwan Dollars have been translated into U.S. Dollars at the June 30, 2014 exchange rate of NT $29.86 per U.S. Dollar.

         All figures are prepared in accordance with TIFRSs.

 Contacts:

Bowen Huang / David Wong
UMC, Investor Relations
+886-2-2658-9168, ext. 16957
[email protected]
[email protected]

SOURCE United Microelectronics Corporation

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