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UMC Reports Third Quarter 2017 Results

28nm successfully enters production at Fab 12X

Third Quarter 2017 Overview1:

  • Revenue: NT$37.70 billion (US$1.24 billion)
  • Gross margin: 17.5%
  • Foundry revenue from 28nm: 15%; Foundry operating margin: 4.6%
  • Foundry capacity utilization rate: 96%
  • Net income attributable to the stockholders of the parent: NT$3.47 billion (US$115.00 million)
  • Earnings per share: NT$0.28; earnings per ADS: US$0.046

TAIPEI, Taiwan--(BUSINESS WIRE)-- United Microelectronics Corporation (NYSE:UMC; TWSE:2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the third quarter of 2017.

Third quarter consolidated revenue was NT$37.70 billion, flat from NT$37.54 billion in 2Q17 and down 1.2% YoY from NT$38.16 billion in 3Q16. 3Q17 consolidated gross margin was 17.5%. Net income attributable to the stockholders of the parent was NT$3.47 billion, with earnings per ordinary share of NT$0.28.

Jason Wang, co-president of UMC, said, “In the third quarter of 2017, UMC’s foundry revenue was NT$37.61 billion. In 3Q17, we continued to sustain stable utilization rates across our 8” and 12” mature technologies, driven by strong chip demand in consumer and computing peripheral segments. Our 8” facilities remained nearly full while mature 12” fabs operated above 90% capacity, lifting overall wafer shipments to 1.75 million 8-inch equivalents. Our 12” fab in Xiamen, Fab 12X, also began shipping 28nm wafers, with yield rates and chip performance reaching the same quality as our Tainan Fab 12A.”

President Wang continued, “Looking into 4Q17, we expect the business environment to decline, due to typical year-end seasonal adjustment. In addition, we foresee 28nm HKMG demand to soften. As we develop and redefine new process technologies according to market demand, we expect to enhance UMC’s market share by penetrating into emerging applications including IoT, 5G wireless and industrial segments, which will spur new waves of growth opportunities. UMC’s recent selection as a DJSI global component for the 10th consecutive year also highlights our active involvement in environment protection and sustainable manufacturing practices, demonstrating our commitment to setting higher corporate social responsibility standards.”

Summary of Operating Results

Operating Results
(Amount: NT$ million) 3Q17 2Q17 QoQ %
change
3Q16 YoY %
change
Net Operating Revenues 37,698 37,538 0.4 38,164 (1.2)
Gross Profit 6,592 6,739 (2.2) 8,301 (20.6)
Operating Expenses (5,404) (5,330) 1.4 (6,373) (15.2)
Net Other Operating Income and Expenses 441 259 70.3 (443) -
Operating Income (Loss) 1,629 1,668 (2.3) 1,485 9.7
Net Non-Operating Income and Expenses 1,236 448 175.9 466 165.2
Net Income Attributable to Stockholders of the Parent 3,473 2,099 65.5 2,975 16.7
EPS (NT$ per share) 0.28 0.17 0.24
(US$ per ADS) 0.046 0.028 0.040

Net operating revenues remained flat in 3Q17 at NT$37.70 billion, including NT$37.61 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained flat at 45%. Gross profit declined 2.2% to NT$6.59 billion, or 17.5% of revenue. Operating expenses increased 1.4% to NT$5.40 billion. Net other operating income was NT$441 million, leading to operating income of NT$1.63 billion. Net non-operating income was NT$1.24 billion. Net income attributable to stockholders of the parent was NT$3.47 billion.

Earnings per ordinary share for the quarter was NT$0.28. Earnings per ADS was US$0.046. The basic weighted average number of outstanding shares in 3Q17 was 12,208,239,978 compared with 12,208,239,978 shares in 2Q17 and 12,208,239,978 shares in 3Q16. The diluted weighted average number of outstanding shares was 13,441,188,010 in 3Q17, compared with 13,383,329,206 shares in 2Q17 and 13,402,233,597 shares in 3Q16. The fully diluted share count on September 30, 2017 was approximately 13,857,267,000. On September 30, 2017, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million) 3Q17 2Q17 QoQ %
change
3Q16 YoY %
change
Net Operating Revenues 37,698 37,538 0.4 38,164 (1.2)
COGS (31,106) (30,799) 1.0 (29,863) 4.2
Depreciation (11,145) (11,100) 0.4 (11,274) (1.1)
Other Mfg. Costs (19,961) (19,699) 1.3 (18,589) 7.4
Gross Profit 6,592 6,739 (2.2) 8,301 (20.6)
Gross Margin (%) 17.5% 18.0% 21.8%
Operating Expenses (5,404) (5,330) 1.4 (6,373) (15.2)
G&A (991) (1,035) (4.3) (1,769) (44.0)
Sales & Marketing (1,070) (1,049) 2.0 (1,207) (11.4)
R&D (3,343) (3,246) 3.0 (3,397) (1.6)
Net Other Operating

Income & Expenses

441 259 70.3 (443) -
Operating Income

(Loss)

1,629 1,668 (2.3) 1,485 9.7

Net operating revenues remained flat at NT$37.70 billion. COGS increased to NT$31.11 billion, as depreciation remained at NT$11.15 billion. Other manufacturing costs increased 1.3% to NT$19.96 billion, mainly due to higher wafer shipments. Gross profit was NT$6.59 billion. Operating expenses increased 1.4% to NT$5.40 billion. General & Administrative expense declined 4.3% to NT$991 million. R&D expense increased 3.0% to NT$3.34 billion, or 8.9% of net operating revenues. Net other operating income was NT$441 million, leading to an operating income of NT$1.63 billion.

Non-Operating Income and Expenses

(Amount: NT$ million) 3Q17 2Q17 3Q16
Non-Operating Income and Expenses 1,236 448 466
Net Interest Income and Expenses (538) (502) (326)
Net Investment Gain and Loss 478 (44) 834
Gain and Loss on Disposal of Investment 538 272 304
Exchange Gain and Loss 776 807 (338)
Other Gain and Loss (18) (85) (8)

Net non-operating income in 3Q17 increased to NT$1.24 billion, which resulted from an NT$776 million in exchange gain and an NT$538 million gain in disposal of investments.

Cash Flow Summary

(Amount: NT$ million) For the 3-Month Period Ended

Sep. 30, 2017

For the 3-Month Period Ended

Jun. 30, 2017

Cash Flow from Operating Activities 11,447 14,817
Net income before tax 2,865 2,116
Depreciation & Amortization 13,487 13,093
Gain on disposal of investments (538) (272)
Impairment loss on financial assets 300 109
Exchange gain on financial assets and liabilities (541) (625)
Changes in working capital (2,971) 1,051
Income tax paid (933) (232)
Other (222) (423)
Cash Flow from Investing Activities (4,984) (8,105)
Capital expenditures (7,288) (8,333)
Proceeds from disposal of AFS financial assets 563 583
Acquisition of intangible assets (251) (295)
Other 1,992 (60)
Cash Flow from Financing Activities (4,604) 707
Bank loans 1,482 8,054
Redemption of bonds - (7,500)
Cash dividends (6,112) -
Other 26 153
Effect of Exchange Rate (54) (97)
Net Cash Flow 1,805 7,322

Cash inflow from operating activities reached NT$11.45 billion. Cash outflow from investing activities totaled NT$4.98 billion, including NT$7.29 billion in CAPEX spending for the foundry segment, resulting in a free cash inflow of NT$4.16 billion. Cash outflow from financing activities was NT$4.60 billion, mainly from the effect of an NT$6.11 billion cash dividend payout and an NT$1.48 billion increase in bank loans. Net cash inflow in 3Q17 was NT$1.81 billion. Over the next 12 months, the company expects to repay NT$1.32 billion in bank loans.

Current Assets
(Amount: NT$ billion) 3Q17 2Q17 3Q16
Cash and Cash Equivalents 69.94 68.13 55.27
Notes & Accounts Receivable 22.61 22.23 22.37
Days Sales Outstanding 54 52 56
Inventories, net 17.10 16.28 17.17
Days of Inventory 49 48 53
Total Current Assets 124.71 120.08 106.97

Cash and cash equivalents increased to NT$69.94 billion. Days of inventory increased to 49 days.

Liabilities
(Amount: NT$ billion) 3Q17 2Q17 3Q16
Total Current Liabilities 82.36 87.70 83.44
Notes & Accounts Payable 6.61 6.65 6.74
Short-Term Credit / Bonds 48.74 48.19 47.05
Payable on Equipment 5.23 5.28 14.45
Dividends payable - 6.11 -
Other 21.78 21.47 15.20
Long-Term Credit / Bonds 52.36 51.24 39.68
Long-Term Investment Liabilities 20.34 19.92 20.54
Total Liabilities 169.74 172.62 155.96
Debt to Equity 79% 81% 71%

Current liabilities decreased to NT$82.36 billion, mainly resulting from an NT$6.11 billion in payout of cash dividends. Total liabilities decreased to NT$169.74 billion, leading to a debt to equity ratio of 79%.

Analysis of Revenue2 for Foundry Segment

Revenue Breakdown by Region
Region 3Q17 2Q17 1Q17 4Q16 3Q16
North America 43% 42% 41% 48% 52%
Asia Pacific 47% 47% 50% 45% 42%
Europe 8% 7% 5% 4% 4%
Japan 2% 4% 4% 3% 2%

Revenue from Asia Pacific and North American customers remained flat at 47% and 43% of sales respectively. Revenue contribution from Japan declined to 2%.

Revenue Breakdown by Geometry
Geometry 3Q17 2Q17 1Q17 4Q16 3Q16
14nm and below 1% 1% 0% - -
14nm<x<=28nm 15% 17% 17% 22% 21%
28nm<x<=40nm 29% 28% 29% 26% 27%
40nm<x<=65nm 12% 12% 13% 14% 15%
65nm<x<=90nm 6% 5% 4% 3% 4%
90nm<x<=0.13um 12% 12% 11% 11% 11%
0.13um<x<=0.18um 12% 12% 13% 11% 11%
0.18um<x<=0.35um 10% 10% 10% 10% 8%
0.5um and above 3% 3% 3% 3% 3%

14nm continued to represent 1% of 3Q17 revenue, while 28nm contribution declined to 15%. 40nm accounted for 29% of sales.

Revenue Breakdown by Customer Type
Customer Type 3Q17 2Q17 1Q17 4Q16 3Q16
Fabless 90% 91% 93% 93% 93%
IDM 10% 9% 7% 7% 7%

Revenue from fabless customers accounted for 90% in 3Q17.

Revenue Breakdown by Application (1)
Application 3Q17 2Q17 1Q17 4Q16 3Q16
Computer 14% 14% 12% 13% 12%
Communication 47% 48% 51% 53% 55%
Consumer 31% 29% 28% 26% 26%
Others 8% 9% 9% 8% 7%

Communication business decreased to 47%. Revenue from the consumer segment grew to 31% while computer remained at 14%

(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.

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) remained unchanged in 3Q17

(To view ASP trend, visit http://www.umc.com/english/investors/3Q17_ASP_trend.asp)

Shipment and Utilization Rate3 for Foundry Segment

Wafer Shipments
3Q17 2Q17 1Q17 4Q16 3Q16
Wafer Shipments
(8” K equivalents)
1,748 1,741 1,678 1,656 1,569
Quarterly Capacity Utilization Rate
3Q17 2Q17 1Q17 4Q16 3Q16
Utilization Rate 96% 96% 96% 94% 89%
Total Capacity
(8” K equivalents)
1,861 1,816 1,742 1,794 1,774

Wafer shipments increased to 1,748K in 3Q17. Quarterly capacity increased 2.5% QoQ to 1,861K, leading to an overall utilization rate of 96% in 3Q17.

Capacity4 for Foundry Segment

Total capacity in the third quarter was 1,861K 8-inch equivalent wafers. Estimated capacity in the fourth quarter will increase to 1,886K 8-inch equivalent wafers, primarily due to capacity expansion at Fab 12X and Fab 12A as well as enhancements to production capabilities at Fab 8S, Fab 8N and Fab 8F.

Annual Capacity in

thousands of wafers

Quarterly Capacity in

thousands of wafers

FAB Geometry
(um)
2016 2015 2014 2013 FAB 4Q17E 3Q17 2Q17 1Q17
WTK 6" 3.5 – 0.45 423 421 448 448 WTK 106 106 106 104
Fab 8A 8" 0.5 – 0.25 827 813 813 813 Fab 8A 207 207 207 204
Fab 8C 8" 0.35 – 0.11 348 347 347 347 Fab 8C 92 92 87 86
Fab 8D 8" 0.13 – 0.09 342 341 358 382 Fab 8D 86 86 86 84
Fab 8E 8" 0.5 – 0.18 419 418 418 418 Fab 8E 105 105 105 103
Fab 8F 8" 0.18 – 0.11 401 388 388 388 Fab 8F 108 107 102 100
Fab 8S 8" 0.18 – 0.11 336 335 335 335 Fab 8S 93 87 84 83
Fab 8N 8" 0.5 – 0.11 750 667 547 469 Fab 8N 194 188 188 185
Fab 12A 12" 0.13 – 0.028 885 793 700 651 Fab 12A 250 247 247 226
Fab 12i 12” 0.13 – 0.040 584 572 573 550 Fab 12i 134 134 134 137
Fab 12X 12” 0.040 9 - - - Fab 12X 35 33 19 10
Total(1) 6,983 6,617 6,323 6,107 Total 1,886 1,861 1,816 1,742
YoY Growth Rate 6% 5% 4% 11%

(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 2016 2015 2014 2013 2012
CAPEX $ 2.8 $ 1.9 $ 1.4 $ 1.1 $ 1.7

2012 figures account for UMC parent company only.

2017 CAPEX Plan

8" 12" Total
11% 89% US$1.7 billion

CAPEX spending in 3Q17 totaled US$241 million. Full year 2017 CAPEX plan is budgeted for US$1.7 billion.

Fourth Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Wafer Shipments: To decrease 3-4%
  • ASP in USD: To decline by approximately 1%
  • Profitability: Gross profit margin will be in mid-teens % range
  • Foundry Segment Capacity Utilization: High 80% range
  • 2017 CAPEX for Foundry Segment: US$1.7 billion

Recent Developments / Announcements

Sep. 7, 2017 UMC Selected as a DJSI Global Component for 10th Consecutive Year

Jul. 26, 2017 UMC 2Q 2017 Financial Results

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

Conference Call / Webcast Announcement

Wednesday, October 25, 2017

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

Dial-in numbers and Access Codes:

USA Toll Free: 1-866 836-0101

Taiwan Number: 02-2192-8016

Other Areas: +886-2-2192-8016

Access Code: UMC

A live webcast and replay of the 3Q17 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 high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (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 nearly 600,000 wafers per month. The company employs over 19,000 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.

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 September 30, 2017, the three-month period ending June 30, 2017, and the equivalent three-month period that ended September 30, 2016. For all 3Q17 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2017 exchange rate of NT$ 30.30 per U.S. Dollar.

2 Revenue in this section represents wafer sales

3 Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

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.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of September 30, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
September 30, 2017
US$ NT$ %
Assets
Current assets
Cash and cash equivalents 2,308 69,938 18.2%
Financial assets at fair value through profit or loss, current 28 844 0.2%
Notes & Accounts receivable, net 746 22,610 5.9%
Inventories, net 564 17,102 4.5%
Other current assets 470 14,215 3.7%
Total current assets 4,116 124,709 32.5%
Non-current assets
Funds and investments 1,146 34,737 9.0%
Property, plant and equipment 6,844 207,367 54.0%
Other non-current assets 573 17,360 4.5%
Total non-current assets 8,563 259,464 67.5%
Total assets 12,679 384,173 100.0%
Liabilities
Current liabilities
Short-term loans 748 22,670 5.9%
Financial liabilities at fair value through profit or loss, current 1 22 0.0%
Payables 906 27,446 7.2%
Current portion of long-term liabilities 861 26,074 6.8%
Other current liabilities 202 6,145 1.5%
Total current liabilities 2,718 82,357 21.4%
Non-current liabilities
Bonds payable 603 18,281 4.7%
Long-term loans 1,125 34,075 8.9%
Other non-current liabilities 1,156 35,023 9.2%
Total non-current liabilities 2,884 87,379 22.8%
Total liabilities 5,602 169,736 44.2%
Equity
Equity attributable to the parent company
Capital 4,167 126,243 32.9%
Additional paid-in capital 1,348 40,856 10.6%
Retained earnings, unrealized gain or loss on available-for-sale

financial assets and exchange differences on translation of

foreign operations

1,684 51,011 13.2%
Treasury stock (156) (4,719) (1.2%)
Total equity attributable to the parent company 7,043 213,391 55.5%
Non-controlling interests 34 1,046 0.3%
Total equity 7,077 214,437 55.8%
Total liabilities and equity 12,679 384,173 100.0%
Note:New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2017 exchange rate of NT $30.30 per U.S. Dollar.
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
Year over Year Comparison Quarter over Quarter Comparison
Three-Month Period Ended Three-Month Period Ended
September 30, 2017 September 30, 2016 Chg. September 30, 2017 June 30, 2017 Chg.
US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %
Net operating revenues 1,244 37,698 1,260 38,164 (1.2%) 1,244 37,698 1,239 37,538 0.4%
Operating costs (1,026) (31,106) (986) (29,863) 4.2% (1,026) (31,106) (1,017) (30,799) 1.0%
Gross profit 218 6,592 274 8,301 (20.6%) 218 6,592 222 6,739 (2.2%)
17.5% 17.5% 21.8% 21.8% 17.5% 17.5% 18.0% 18.0%
Operating expenses
- Sales and marketing expenses (35) (1,070) (40) (1,207) (11.4%) (35) (1,070) (35) (1,049) 2.0%
- General and administrative expenses (33) (991) (58) (1,769) (44.0%) (33) (991) (34) (1,035) (4.3%)
- Research and development expenses (110) (3,343) (112) (3,397) (1.6%) (110) (3,343) (107) (3,246) 3.0%
Subtotal (178) (5,404) (210) (6,373) (15.2%) (178) (5,404) (176) (5,330) 1.4%
Net other operating income and expenses 14 441 (15) (443) - 14 441 9 259 70.3%
Operating income 54 1,629 49 1,485 9.7% 54 1,629 55 1,668 (2.3%)
4.3% 4.3% 3.9% 3.9% 4.3% 4.3% 4.4% 4.4%
Net non-operating income and expenses 41 1,236 15 466 165.2% 41 1,236 15 448 175.9%
Income from continuing operations before

income tax

95 2,865 64 1,951 46.8% 95 2,865 70 2,116 35.4%
7.6% 7.6% 5.1% 5.1% 7.6% 7.6% 5.6% 5.6%
Income tax expense (14) (401) (6) (195) 105.6% (14) (401) (21) (638) (37.1%)
Net income 81 2,464 58 1,756 40.3% 81 2,464 49 1,478 66.7%
6.5% 6.5% 4.6% 4.6% 6.5% 6.5% 3.9% 3.9%
Other comprehensive income (loss) (35) (1,068) (73) (2,213) (51.7%) (35) (1,068) 46 1,396 -
Total comprehensive income (loss) 46 1,396 (15) (457) - 46 1,396 95 2,874 (51.4%)
Net income attributable to:
  Stockholders of the parent 115 3,473 98 2,975 16.7% 115 3,473 69 2,099 65.5%
  Non-controlling interests (34) (1,009) (40) (1,219) (17.2%) (34) (1,009) (20) (621) 62.5%
Comprehensive income (loss) attributable to:
  Stockholders of the parent 79 2,402 26 802 199.5% 79 2,402 115 3,488 (31.1%)
  Non-controlling interests (33) (1,006) (41) (1,259) (20.1%) (33) (1,006) (20) (614) 63.8%
Earnings per share-basic 0.009 0.28 0.008 0.24 0.009 0.28 0.006 0.17
Earnings per ADS (2) 0.046 1.40 0.040 1.20 0.046 1.40 0.028 0.85
Weighted average number of shares
outstanding (in millions) 12,208 12,208 12,208 12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2017 exchange rate of NT $30.30 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
For the Three-Month Period Ended For the Nine-Month Period Ended
September 30, 2017 September 30, 2017
US$ NT$ % US$ NT$ %
Net operating revenues 1,244 37,698 100.0% 3,718 112,654 100.0%
Operating costs (1,026) (31,106) (82.5%) (3,033) (91,894) (81.6%)
Gross profit 218 6,592 17.5% 685 20,760 18.4%
Operating expenses
- Sales and marketing expenses (35) (1,070) (2.8%) (109) (3,290) (2.9%)
- General and administrative expenses (33) (991) (2.6%) (101) (3,076) (2.7%)
- Research and development expenses (110) (3,343) (8.9%) (349) (10,580) (9.4%)
Subtotal (178) (5,404) (14.3%) (559) (16,946) (15.0%)
Net other operating income and expenses 14 441 1.1% 28 853 0.7%
Operating income 54 1,629 4.3% 154 4,667 4.1%
Net non-operating income and expenses 41 1,236 3.3% 46 1,382 1.3%
Income from continuing operations before

income tax

95 2,865 7.6% 200 6,049 5.4%
Income tax expense (14) (401) (1.1%) (20) (610) (0.6%)
Net income 81 2,464 6.5% 180 5,439 4.8%
Other comprehensive income (loss) (35) (1,068) (2.8%) (89) (2,669) (2.3%)
Total comprehensive income (loss) 46 1,396 3.7% 91 2,770 2.5%
Net income attributable to:
  Stockholders of the parent 115 3,473 9.2% 259 7,858 7.0%
  Non-controlling interests (34) (1,009) (2.7%) (79) (2,419) (2.2%)
Comprehensive income (loss) attributable to:
  Stockholders of the parent 79 2,402 6.4% 175 5,290 4.7%
  Non-controlling interests (33) (1,006) (2.7%) (84) (2,520) (2.2%)
Earnings per share-basic 0.009 0.28 0.021 0.64
Earnings per ADS (2) 0.046 1.40 0.106 3.20
Weighted average number of shares

outstanding (in millions)

12,208 12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2017 exchange rate of NT $30.30 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Nine-Month Period Ended September 30, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
US$ NT$
Cash flows from operating activities :
Net income before tax 200 6,049
Depreciation & Amortization 1,316 39,872
Gain on disposal of investments (43) (1,299)
Exchange gain on financial assets and liabilities (59) (1,790)
Changes in other current assets (39) (1,172)
Changes in other current liabilities 58 1,766
Changes in assets, liabilities and others (74) (2,235)
Income tax paid (53) (1,615)
Net cash provided by operating activities 1,306 39,576
Cash flows from investing activities :
Acquisition of available-for-sale financial assets (29) (864)
Proceeds from disposal of available-for-sale financial assets 61 1,847
Proceeds from capital reduction and liquidation of investments 67 2,035
Acquisition of property, plant and equipment (1,098) (33,275)
Acquisition of intangible assets (30) (924)
Others 59 1,799
Net cash used in investing activities (970) (29,382)
Cash flows from financing activities :
Increase in short-term loans 100 3,028
Proceeds from bonds issued 274 8,300
Redemption of bonds (248) (7,500)
Proceeds from long-term loans 392 11,867
Repayments of long-term loans (151) (4,577)
Cash dividends (202) (6,112)
Acquisition of subsidiaries (41) (1,228)
Others 6 170
Net cash provided by financing activities 130 3,948
Effect of exchange rate changes on cash and cash equivalents (58) (1,783)
Net Increase in cash and cash equivalents 408 12,359
Cash and cash equivalents at beginning of period 1,900 57,579
Cash and cash equivalents at end of period 2,308 69,938
Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2017 exchange rate of NT $30.30 per U.S. Dollar.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171025005479/en/

UMC, Investor Relations
Michael Lin, + 886-2-2658-9168, ext. 16900
jinhong_lin@umc.com
or
David Wong, + 886-2-2658-9168, ext. 16900
david_wong@umc.com

Source: United Microelectronics Corporation