UMC Reports 2005 Third Quarter Results: Rebound in ASP, Wafer Shipments Expected to Drive Operating Profit in 4Q05.TAIPEI Taipei (tībā`), city (1995 est. pop. 2,632,863), N Taiwan, capital of Taiwan and provisional capital of the Republic of China. Taiwan's largest city, it is the administrative, cultural, and industrial center of the island. , R.O.C. -- UMC UMC United Methodist Church UMC United Microelectronics Corporation UMC University Medical Center UMC United Microelectronics Corp (Republic of China) UMC University of Missouri-Columbia (NYSE NYSE See: New York Stock Exchange : UMC, TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 2303): Third Quarter 2005 Overview(1): --Revenue increased 21.3% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to NT$23.58 billion (US$711 million) --Net income increased sequentially to NT$2,165 million (US$65 million) --Wafer shipments increased 17.6% sequentially to 741 thousand 8-inch equivalent wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. --EPS was NT$0.12; EPADS EPADS Earnings Per Average Diluted Share was US$0.018 --Revenue from 90nm technology increased from 9% to 14% United Microelectronics Corporation UMC (United Microelectronics Corporation) was founded as Taiwan's first semiconductor company in 1980 as a spin-off of the government-sponsored institute ITRI. Today, UMC is best known for its merchant foundry business, manufacturing integrated circuits wafers for fabless (NYSE: UMC; TSE: 2303) ("UMC" or "the Company"), a leading global semiconductor foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. , today announced its unconsolidated operating results for the third quarter of 2005. "The third quarter of 2005 marked a fairly significant turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. for our operations," said UMC CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Dr. Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. Hu. "We noticed demand increasing across a wide rage of applications, including wireless and wired communications, PC chipsets A set of chips that provides the interfaces between all of the PC's subsystems. It provides the buses and electronics to allow the CPU, memory and input/output devices to interact. and LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. drivers in the computer segment, and DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. and MP3 products in the consumer segment. These positive developments all set a new stage for growth that started towards the end of the second quarter and continued into the third quarter. As a result, our blended blend v. blend·ed or blent , blend·ing, blends v.tr. 1. To combine or mix so that the constituent parts are indistinguishable from one another: ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). grew 2% and wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. shipments increased 17.6% sequentially to 741 thousand 8-inch equivalent wafers in Q3." Dr. Hu continued, "We are seeing strong demand for our 90nm technologies and we are building momentum in our development of new technologies at the leading edge. It will be exciting to watch as these 90nm products begin spreading within the mainstream markets in the coming months. UMC led all foundries in 90nm wafer shipments in July July: see month. 2005 with over 10,000 shipments and by the end of August, UMC shipped over 100,000 90nm wafers in total. We believe this is a solid indication of the production maturity and readiness of UMC's 90nm process for every major advanced application. We are currently producing 90nm chips at two 300mm fabs and one 200mm fab, and now have over 20 different products that are currently being manufactured. In addition to UMC's standard 90nm device offering, customers are also utilizing either the company's 90nm low-power In electronics, the term low-power means one of two things about a device:
adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. device options, depending upon their product application." "I would also like to note that we have already delivered working 65nm product samples to customers. This not only demonstrates that this technology is a reality at UMC today, but is also a testament to our commitment to maintaining our leadership in the industry at the leading edge. About 70% of UMC's revenue comes from our fabless (FABricationLESS) A semiconductor vendor that does not have inhouse manufacturing facilities. Although it designs and tests the chips, it relies on external foundries (fabs) for their actual fabrication. See fab, foundry and IDM. customers, and their dependency dependency In international relations, a weak state dominated by or under the jurisdiction of a more powerful state but not formally annexed by it. Examples include American Samoa (U.S.) and Greenland (Denmark). on System-on-Chip See SoC. (SoC) solutions is increasing as process geometries shrink shrink Vox populi noun A psychiatrist . In response to this, in the past two years we have particularly focused on enhancing our capabilities in system and architecture knowledge, Electronic Design Automation (EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. ) methodology, and tape-out In electronics design, tape-out or tapeout is the final stage of the design cycle of integrated circuits or printed circuit boards, the point at which the description of a circuit is sent for manufacture. services, and expanding our IP portfolio. This intense focus on delivering premium value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to our customers has been at the center of our SoC Solution Foundry strategy and has been a primary factor in helping to drive our success with leading edge 90nm, and now 65nm technologies. As the semiconductor industry continues to evolve Evolve may refer to several terms:
Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. phase of sustainable success and profitability." Summary of Operating Results
Operating Results
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(Amount: NT$ million) 3Q05 2Q05 QoQ % 3Q04 YoY %
change change
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Revenue 23,579 19,443 21.3 34,580 (31.8)
Gross Profit 2,954 212 1293.4 11,663 (74.7)
Operating Expenses (3,514) (3,551) (1.0) (2,926) 20.1
Operating Income (Loss) (560) (3,339) (83.2) 8,737 (106.4)
Non-op. Income (Expenses) 2,725 3,638 (25.1) 2,177 25.18
Net Income 2,165 299 624.1 10,914 (80.2)
EPS (NT$ per share) 0.12 0.02 0.58
(US$ per ADS) 0.018 0.003 0.087
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Revenue in 3Q05 was NT$23.58 billion, representing a 21.3% quarter-over-quarter increase from NT$19.44 billion in 2Q05, and a 31.8% year-over-year decrease from NT$34.58 billion in 3Q04. Gross profit for the quarter was NT$2.95 billion, or 12.5% of revenue, compared to NT$212 million, or 1.1% of revenue in 2Q05. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in 3Q05 was NT$560 million compared to a loss of NT$3.34 billion in 2Q05. The increase in gross profit was mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the increase in wafer shipments and an improved product mix. Net income for 3Q05 was NT$2.17 billion, a sequential One after the other in some consecutive order such as by name or number. increase of 624.1% from 2Q05, which was mainly due to the significant increase in the gross profit. Earnings per ordinary share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) for the quarter were NT$0.12. Earnings per ADS (EPADS) were US$0.018. This compares with 2Q05 earnings per ordinary share of NT$0.02 and earnings per ADS of US$0.003. One ADS represents five Taiwan-listed ordinary shares. The basic weighted average number of outstanding shares in 3Q05 was 18,433,685,226, compared to 18,452,431,830 shares in 2Q05 and 18,878,621,323 shares in 3Q04. The diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. weighted average number of outstanding shares was 18,610,270,285 in 3Q05, compared to 18,555,975,483 shares in 2Q05 and 19,221,590,458 shares in 3Q04. The decrease in basic and diluted weighted average outstanding shares in 3Q05 was mainly due to the execution of the Company's 8th treasury share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program in early July. Detailed Financials Section Depreciation and amortization expenses were NT$12.59 billion in 3Q05, compared to NT$12.49 billion in 2Q05. Depreciation within COGS These are all the Cogs found in Disney's Toontown Online. Names that are moved forward are leaders of the HQ of that specific Cog type. Bossbots
COGS & Expenses
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(Amount: NT$ million) 3Q05 2Q05 QoQ % 3Q04 YoY %
change change
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Revenue 23,579 19,443 21.3 34,580 (31.8)
COGS (20,625) (19,231) 7.2 (22,917) (10.0)
Depreciation (10,712) (10,674) 0.4 (9,266) 15.6
Other Mfg. Costs (9,913) (8,557) 15.8 (13,651) (27.4)
Gross Profit 2,954 212 1293.4 11,663 (74.7)
Gross Margin (%) 12.5% 1.1% 33.7%
Total Operating Exp. (3,514) (3,551) (1.0) (2,926) 20.1
G&A (877) (851) 3.1 (667) 31.5
Sales & Marketing (618) (530) 16.6 (579) 6.7
R&D (2,019) (2,170) (7.0) (1,680) 20.2
Operating Income (560) (3,339) (83.2) 8,737 (106.4)
Operating Margin (%) -2.4% -17.2% 25.3%
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Net non-operating income was NT$2.73 billion, including NT$2.13 billion of investment disposal gains and NT$617 million of net investment losses. The gain on the disposal of investments included the sale of MediaTek MediaTek Inc (Chinese: 聯發科技, usually referred to as MTK) is a fabless semiconductor company located in Taiwan. It began as a supplier of integrated circuits for digital media and storage, especially DVD. and Novatek Originally known as OAO FIK Novafininvest, OAO Novatek (MICEX:B>NVTK RTS:B>NVTK) is Russia's largest independent natural gas producer, and second-largest in Russia overall after the Public/State-owned Gazprom. shares for NT$1,588 million and NT$550 million, respectively. Net investment losses mainly came from a NT$525 million loss from UMC's subsidiary Hsun Chieh Investment Corp, and a NT$381 million loss from UMCJ in 3Q05. Non-operating Income (Expenses) ====================================================================== (Amount: NT$ million) 3Q05 2Q05 3Q04 ---------------------------------------------------------------------- Net Non-operating Income (Exp.) 2,725 3,638 2,177 Net Interest Income (Expense) 0 (10) (114) Net Investment Income (Loss) (617) (439) 886 Gain on Disposal of Investment 2,133 3,515 2,242 Exchange Gain (Loss) 171 213 49 Others 1,038 359 (886) ---------------------------------------------------------------------- Net cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. was NT$3.73 billion in 3Q05. The increase in cash from operations in 3Q05 mainly reflected higher wafer sales during the quarter. The NT$5.11 billion of financing cash outflow was mainly due to the NT$3 billion of share repurchases, and NT$1.76 billion from the issuance of the cash dividend. Over the next 12 months, we expect to repay NT$5.25 billion in corporate bonds.
Cash Flow Summary
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For the 3-Month For the 3-Month
(Amount: NT$ million) Period Ended Period Ended
Sep. 30, 2005 June 30, 2005
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Cash Flow from Operations 11,298 9,002
Net Income (Loss) 2,165 299
Depreciation & Amortization 12,594 12,487
Changes in working capital (2,533) (392)
Others (928) (3,392)
Cash Flow from Investing (2,444) 167
Capital Expenditures (3,568) (4,248)
Others 1,124 4,415
Cash Flow from Financing (5,113) (29,757)
Effect of Exchange Rate (14) (46)
Net Cash Flow 3,727 (20,634)
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Cash and cash equivalents increased by NT$3.72 billion to NT$71.79 billion, which was mainly due to higher cash inflows from operations. The increase in inventory primarily came from the increase of work-in-process wafers and reflects the upward trend of the business. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (2) increased slightly to 45 days, and average inventory turnover increased to 39 days. Current Assets ====================================================================== (Amount: NT$ billion) 3Q05 2Q05 1Q05 ---------------------------------------------------------------------- Cash & Cash Equivalents 71.79 68.07 88.70 Notes & Accounts Receivable 13.73 9.65 9.31 Days Sales Outstanding 45 44 45 Inventory 9.38 7.90 6.91 Avg. Inventory Turnover 39 36 41 Total Current Assets 102.51 93.58 117.15 ---------------------------------------------------------------------- Total liabilities increased by NT$0.15 billion to NT$54.07 billion in 3Q05. UMC's Debt to Equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. remained flat at 21% at the end of 3Q05. Liabilities ====================================================================== (Amount: NT$ billion) 3Q05 2Q05 1Q05 ---------------------------------------------------------------------- Total Current Liabilities 21.81 22.07 19.88 Accounts Payable 4.51 3.80 3.81 Short-term Credit / Bonds 6.08 6.90 6.68 Others 11.22 11.37 9.39 Long-term Liabilities 28.50 28.35 33.60 Total Liabilities 54.07 53.92 56.48 Debt to Equity 21% 21% 21% ---------------------------------------------------------------------- Analysis of Revenue(3) The percentage of revenue contributed from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. grew to 48% in 3Q05. The percentage of revenue contributed from Japan remained stable. Revenue Breakdown by Region ---------------------------------------------------------------------- Region 3Q05 2Q05 1Q05 4Q04 3Q04 ====================================================================== North America 48% 44% 49% 49% 44% ---------------------------------------------------------------------- Asia Pacific 43% 45% 38% 32% 33% ---------------------------------------------------------------------- Europe 7% 9% 11% 16% 19% ---------------------------------------------------------------------- Japan 2% 2% 2% 3% 4% ---------------------------------------------------------------------- The percentage of revenue from advanced 90nm business increased to 14%, compared to 9% in 2Q05, mainly due to stronger demand for 90nm communication chips. The percentage of revenue from 0.13um technology increased to 18% due to stronger demand for consumer and communication chips. The percentage of revenue from 0.18um and below increased to 61% in 3Q05 from 53% in 2Q05. Revenue Breakdown by Geometry ---------------------------------------------------------------------- Geometry 3Q05 2Q05 1Q05 4Q04 3Q04 ====================================================================== 90nm 14% 9% 7% 8% 2% ---------------------------------------------------------------------- 0.13um 18% 14% 20% 19% 18% ---------------------------------------------------------------------- 0.15um 10% 10% 12% 16% 15% ---------------------------------------------------------------------- 0.15um less than x less than=0.18um 19% 20% 20% 19% 25% ---------------------------------------------------------------------- 0.18um less than x less than=0.25um 8% 11% 10% 12% 14% ---------------------------------------------------------------------- 0.25um less than x less than=0.35um 22% 25% 20% 17% 17% ---------------------------------------------------------------------- 0.5um and above 9% 11% 11% 9% 9% ---------------------------------------------------------------------- The percentage of revenue from IDM (1) See identity management. (2) (Integrated Device Manufacturer) A company that performs every step of the chip-making process, including design, manufacture, test and packaging. Examples of IDMs are Intel, AMD, Motorola, IBM, TI and Lucent. customers increased to 29% in 3Q05 from 24% in 2Q05 due to stronger demand from North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. IDM customers during the third quarter. Revenue Breakdown by Customer Type ---------------------------------------------------------------------- Customer Type 3Q05 2Q05 1Q05 4Q04 3Q04 ====================================================================== Fabless 71% 76% 69% 66% 68% ---------------------------------------------------------------------- IDM 29% 24% 31% 34% 32% ---------------------------------------------------------------------- System 0% 0% 0% 0% 0% ---------------------------------------------------------------------- Revenue from the communication segment increased to 47% of total revenue in 3Q05 because of strong demand for handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. components. The percentage of revenue from consumer segments remained stable. Revenue Breakdown by Application (1) ---------------------------------------------------------------------- Application 3Q05 2Q05 1Q05 4Q04 3Q04 ====================================================================== Computer 19% 20% 24% 24% 20% ---------------------------------------------------------------------- Communication 47% 44% 45% 49% 44% ---------------------------------------------------------------------- Consumer 32% 32% 26% 23% 32% ---------------------------------------------------------------------- Memory 1% 2% 2% 1% 2% ---------------------------------------------------------------------- Others 1% 2% 3% 3% 2% ---------------------------------------------------------------------- (1) Computer consists of ICs such as HDD controllers, DVD-ROM/CD-ROM drives ICs, LCD drivers, graphic processors, and PDAs. Communication consists of xDSL, DSP, WLAN, LAN controllers, handset components, caller ID devices, etc. Consumer consists of ICs used for DVD players, game consoles, digital cameras, smart cards, toys, etc. Memory consists of DRAM, SRAM, Flash, EPROM, ROM, and EEPROM. Blended Average Selling Price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. Trend The blended average selling price (ASP) rose 2% in US dollar terms during 3Q05 due to increasing demand for advanced process technologies. This was in line with the ASP guidance previously provided by UMC. (To view ASP trend, visit http://www.umc.com/english/investors/3Q05_ASP_trend.asp) Shipment and Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be Rate(4) Wafer shipments increased by 17.6% sequentially to 741 thousand 8-inch equivalent wafers in 3Q05 from 630 thousand wafers in 2Q05. The utilization rate for the quarter was 78%, which was higher than the approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75% level that we expected in our previous guidance.
Wafer Shipments
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3Q05 2Q05 1Q05 4Q04 3Q04
======================================================================
Wafer Shipments
('000 8-inch eq.) 741 630 564 657 791
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Quarterly Capacity Utilization Rate
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3Q05 2Q05 1Q05 4Q04 3Q04
======================================================================
Utilization Rate 78% 65% 63%(1) 72% 94%
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Total Capacity
('000 8-inch eq.) 970 962 950 918 846
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(1) 1Q05 utilization rate was calculated based on 1Q05 available
capacity, which is about 94% of total capacity after factoring in a 6%
productivity loss due to annual scheduled maintenance.
Capacity(5) Capacity for 3Q05 was 970 thousand 8-inch equivalent wafers. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. increase in capacity of 8 thousand 8-inch equivalent wafers during 3Q05 was due to capacity expansion at Fab 12A. UMC's estimated capacity in 4Q05 will remain at 970 thousand 8-inch equivalent wafers.
Annual Capacity in thousands of 8-inch wafer equivalents
FAB Geometry
(um) 2005E 2004 2003 2002
======================================================================
Fab 6A 6" 3.5 - 0.45 344 346 352 349
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Fab 8AB 8" 0.5 - 0.25 816 796 801 853
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Fab 8C 8" 0.35 - 0.15 401 386 325 355
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Fab 8D 8" 0.18 - 0.09 276 256 238 214
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Fab 8E 8" 0.5 - 0.18 404 401 354 376
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Fab 8F 8" 0.25 - 0.15 380 349 342 312
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Fab 8S (1) 8" 0.25 - 0.15 278 131 0 0
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Fab 12A 12" 0.18 - 0.065 590 392 234 119
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Fab 12i (2) 12" 0.13 - 0.065 363 101 0 0
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Total (3) 3,852 3,158 2,646 2,578
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YoY Growth Rate 22% 19% 3% -11%
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Quarterly Capacity in thousands of 8-inch wafer equivalents
FAB 4Q05E 3Q05 2Q05 1Q05
======================================================================
Fab 6A 86 86 86 86
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Fab 8AB 204 204 204 204
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Fab 8C 100 100 100 101
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Fab 8D 68 68 68 72
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Fab 8E 101 101 101 101
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Fab 8F 95 95 95 95
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Fab 8S (1) 69 69 69 71
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Fab 12A 153 153 145 139
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Fab 12i (2) 94 94 94 81
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Total (3) 970 970 962 950
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(1) Former fab of SiSMC, which was acquired from Silicon Integrated
Systems in July 2004.
(2) Former fab of UMCi, a UMC wholly owned subsidiary in December 2004
that was merged into UMC in April 2005
(3) One 6-inch wafer is converted into 0.5625(6 squared/8 squared)
8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12
squared/8 squared) 8-inch equivalent wafers.
CAPEX UMC maintained the cash-based 2005 CAPEX plan at US$1 billion. By the end of the third quarter, UMC's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. CAPEX totaled US$427 million.
UMC Capital Expenditure by Year
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(US$ billion) 2004 2003 2002 2001 2000 1999
======================================================================
CAPEX $1.53 $0.37 $0.8 $1.1 $2.8 $1.9
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2005 CAPEX Plan
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8" fab 12" fab 12" R&D Total
======================================================================
UMC 5% 83% 12% US$1 billion
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UMCJ 100% - - US$34 million
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Long-term Investments(6)
Consolidated Long-term Investments as of September 30, 2005
As of End of 3Q05 As of End of 2Q05
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(Amount: NT$ Book Fair Book Fair
million) value % value % value % value %
======================================================================
Foundry Industry 11,470 30 12,795 18 12,994 31 13,214 19
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Strategic
Semiconductor
Investments 12,524 32 38,645 56 12,102 29 35,163 50
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Other Investments 14,678 38 18,267 26 17,111 40 21,394 31
======================================================================
Total 38,672 100 69,707 100 42,207 100 69,771 100
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As of September September: see month. 30, 2005, the total book value of long-term investments was NT$38.67 billion, and the estimated fair value of long-term investments was NT$69.71 billion. The decrease in foundry industry investments was mainly due to the disposal of Faraday faraday /far·a·day/ (F ) (far´ah-da) the electric charge carried by one mole of electrons or one equivalent weight of ions, equal to 9.649 × 104coulombs. far·a·day n. by our subsidiary company Hsun Chieh Investment Corp. The decrease in other investments was mainly due to the disposal of Mega Financial Holding and Unimicron by subsidiary company Hsun Chieh Investment Corp. The increase in fair value of strategic semiconductor investments is due to an increase in the share price of several investments. Recent Developments / Announcements
Oct. 06, 2005 Cadence and UMC Sign Agreement to Streamline Wireless
Design in the Fabless Market
Sep. 29, 2005 UMC Sponsors Scholarship Program with New York's
Polytechnic University
Sep. 29, 2005 UMC Announces Share Buy-Back Program
Sep. 29, 2005 UMC Announces Convertible Bond Pricing
Sep. 27, 2005 UMC Introduces Industry's Most Comprehensive Low-Power
Design Package
Sep. 23, 2005 UMC Europe Relocates to New Office at the WTC Schiphol
Amsterdam Airport
Aug. 31, 2005 UMC and Integrand Partner to Bring Advanced
Capabilities to 0.13 Micron RFCMOS Designers
Aug. 23, 2005 RAMBUS and UMC Expand Availability of RAMBUS PCI
Express PHY IP for a Broader Range of Process
Technologies
Aug. 22, 2005 UMC Achieves Record Milestone of Over 100,000 90nm
Wafer Shipments
Aug. 10, 2005 MOSAID and UMC Collaborate on Development of
Integrated DDR/DDR2 SDRAM Memory Controller IP
Solution for 90nm and 130nm Technologies
Jul. 27, 2005 UMC 2Q 2005 Financial Results
Please visit UMC's website http://www.umc.com/english/news/index.asp
for further details regarding the above announcements.
Fourth Quarter of 2005 Outlook & Guidance Quarter-over-quarter Guidance: --Wafer shipments: to increase by low teen % points --Wafer ASP (in US$): to increase by low single-digit % points --Capacity utilization rate: approximately 85% --Profitability: gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. to be in the high teen % points --Percentage of 0.18um & below revenues: to reach two-thirds of sales, while 90nm is expected to be in the high teen % points --The communication segment is expected to be the strongest, followed by the computer and consumer segments --2005 CAPEX budget: US$1bn Conference Call / Webcast Announcement
Wednesday, October 26, 2005
Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)
Dial-in numbers and Access Codes:
Asia/Europe: +1-617-213-8840
North America: 866-700-7477
Access Code: UMCCall
A live webcast and replay of the 3Q05 results announcement will be
available at www.umc.com under the "Investor Relations \ Investor
Events" section.
About UMC UMC (NYSE: UMC, TSE: 2303) is a leading global semiconductor foundry that manufactures advanced process ICs for applications spanning every major sector of the semiconductor industry. UMC delivers cutting-edge foundry technologies that enable sophisticated system-on-chip (SoC) designs, including 90nm copper, 0.13um copper, and mixed signal/RFCMOS. UMC is also a leader in 300mm manufacturing; Fab 12A in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. UMC employs approximately 10,500 people worldwide and has offices in Taiwan, Japan, Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . UMC can be found on the web at
http://www.umc.com.
(1) Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with ROC GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , which differ in some material respects from generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States. They are unaudited, unconsolidated, and represent comparisons among the three-month period ending September 30, 2005, the three-month period ending June June: see month. 30, 2005, and the equivalent three-month period that ended September 30, 2004. For all 3Q05 results, New Taiwan Dollar The New Taiwan dollar (Traditional Chinese: 新臺幣 or 新台幣; Pinyin: Xīntáibì) (currency code TWD and common abbreviation NT$), or simply (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$33.16 to one U.S. dollar. (2) Days Sales Outstanding = 365/((Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the three-month period end *4)/((Beginning NR&AR balance, net + Ending NR&AR balance, net)/2)) Average Inventory Turnover = 365/((COGS for the three-month period end *4)/((Beginning Inventory balance, net + Ending Inventory balance, net)/2)) (3) Revenue in this section represents net wafer sales. All revenue breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. tables exclude JV's and subsidiaries. (4) Quarterly utilization rate = Quarterly wafer out / Estimated quarterly capacity (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. (6) The long-term investment information disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). is UMC Group consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: data, which includes UMC, Hsun Chieh Investment Corp., Fortune Venture Capital Corp., UMC Capital Corp., and Unitruth Investment Corp.. For publicly quoted investments, fair value is calculated by multiplying mul·ti·ply 1 v. mul·ti·plied, mul·ti·ply·ing, mul·ti·plies v.tr. 1. To increase the amount, number, or degree of. 2. Mathematics To perform multiplication on. the average daily closing price of the last month of the accounting period (September of 2005) with the number of shares owned by the UMC Group as of September 30, 2005. Otherwise, book value or underlying equity net value of investments is taken as recorded on the balance sheet at the end of the accounting period (September 30, 2005) and is used as the fair value. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statements Except for statements in respect of historical matters, the statements in this release contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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, among other things: our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; the risks associated with international global business activities; our dependence upon key personnel; general economic and political conditions, including those related to the semiconductor, communications, consumer electronics and computer industries; possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activities, armed conflicts and highly contagious diseases contagious diseases: see communicable diseases. ; reduced end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. purchases relative to expectations and orders; fluctuations in foreign currency exchange rates; and those risks identified in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Risk Factors" in UMC's Annual Report on Form 20-F for the year ended December December: see month. 31, 2004 filed with the U.S. Securities and Exchange Commission on June 29, 2005. 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 U.S. GAAP, as described in note 33 to the financial statements on Form 20-F for the year ended December 31, 2004 filed with the U.S. Securities and Exchange Commission on June 29, 2005. The forward-looking statements in this release reflect the current belief of UMC as of the date of this release and UMC undertakes no obligation to update these forward-looking statements for events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that occur after such date or to reflect the occurrence of unanticipated events.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Balance Sheet
As of September 30, 2005
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
September 30, 2005
--------------------------------
US$ NT$ %
---------- ---------- ----------
ASSETS
Current Assets
Cash and Cash Equivalents 2,165 71,792 22.8%
Marketable Securities 94 3,124 1.0%
Notes & Accounts Receivable 403 13,372 4.3%
Inventories 283 9,381 3.0%
Other Current Assets 146 4,842 1.5%
---------- ---------- ----------
Total Current Assets 3,091 102,511 32.6%
---------- ---------- ----------
Non-Current Assets
Funds and Long-term Investments 1,358 45,046 14.3%
Other Financial Assets 30 986 0.3%
Property, Plant and Equipment 4,632 153,599 48.9%
Intangible Assets 131 4,348 1.4%
Other Assets 236 7,836 2.5%
---------- ---------- ----------
Total Non-Current Assets 6,387 211,815 67.4%
---------- ---------- ----------
TOTAL ASSETS 9,478 314,326 100.0%
========== ========== ==========
LIABILITIES
Current Liabilities
Short-term Loans 25 830 0.2%
Payables 447 14,829 4.7%
Current Portion of Long-term
Interest-Bearing Liabilities 158 5,250 1.7%
Other Current Liabilities 27 905 0.3%
---------- ---------- ----------
Total Current Liabilities 657 21,814 6.9%
---------- ---------- ----------
Non-Current Liabilities
Bonds Payable 859 28,501 9.1%
Other Liabilities 113 3,759 1.2%
---------- ---------- ----------
Total Non-Current Liabilities 972 32,260 10.3%
---------- ---------- ----------
TOTAL LIABILITIES 1,629 54,074 17.2%
---------- ---------- ----------
STOCKHOLDERS' EQUITY
Capital Stock 5,961 197,664 62.9%
Capital Reserve 2,567 85,131 27.1%
Retained Earnings, Unrealized Long-
term Investment Loss and Translation
Adjustment 438 14,539 4.6%
Treasury Stock (1,118) (37,082) -11.8%
---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY 7,848 260,252 82.8%
---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 9,477 314,326 100.0%
========== ========== ==========
---------------------------------------------------------------------
Note: New Taiwan Dollars have been translated into U.S. Dollars at the
September 30, 2005 exchange rate of NT$33.16 per U.S. Dollar.
All figures are in ROC GAAP.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Income Statement
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
Year over Year Comparison
---------------------------------------
Three-Month Period Ended
September 30, September 30,
2005 2004 %
--------------- --------------- -------
US$ NT$ US$ NT$ Chg.
------ -------- ------ -------- -------
Net Sales 711 23,579 1,043 34,580 -31.8%
Cost of Goods Sold (622) (20,625) (691) (22,917) -10.0%
------ -------- ------ -------- -------
Net Gross Profit 89 2,954 352 11,663 -74.7%
------ -------- ------ -------- -------
12.5% 12.5% 33.7% 33.7%
Operating Expenses
- Sales & Marketing 19 618 18 579 6.7%
- General & Administrative 26 877 20 667 31.5%
- Research & Development 61 2,019 51 1,680 20.2%
------ -------- ------ -------- -------
106 3,514 89 2,926 20.1%
------ -------- ------ -------- -------
Operating Income (Loss) (17) (560) 263 8,737 -106.4%
-2.4% -2.4% 25.3% 25.3%
Net Non-Operating Income
(Expenses) 82 2,725 66 2,177 25.2%
------ -------- ------ -------- -------
Income (Loss) before Income
Tax 65 2,165 329 10,914 -80.2%
9.2% 9.2% 31.6% 31.6%
Income Tax (Expense) Benefit (0) (0) (0) (0) -14.5%
------ -------- ------ -------- -------
Net Income (Loss) 65 2,165 329 10,914 -80.2%
====== ======== ====== ======== -------
9.2% 9.2% 31.6% 31.6%
Earnings per Share 0.004 0.12 0.017 0.58
------ -------- ------ --------
Earnings per ADS (2) 0.018 0.60 0.087 2.90
------ -------- ------ --------
Weighted Average Number of
Shares
Outstanding (in millions) 18,434 18,879
-------- --------
Quarter over Quarter Comparison
----------------------------------------
Three-Month Period Ended
September 30, June 30, 2005
2005 %
--------------- --------------- --------
US$ NT$ US$ NT$ Chg.
------ -------- ------ -------- --------
Net Sales 711 23,579 586 19,443 21.3%
Cost of Goods Sold (622) (20,625) (580) (19,231) 7.2%
------ -------- ------ -------- --------
Net Gross Profit 89 2,954 6 212 1293.4%
------ -------- ------ -------- --------
12.5% 12.5% 1.1% 1.1%
Operating Expenses
- Sales & Marketing 19 618 16 530 16.6%
- General & Administrative 26 877 26 851 3.1%
- Research & Development 61 2,019 65 2,170 -7.0%
------ -------- ------ -------- --------
106 3,514 107 3,551 -1.0%
------ -------- ------ -------- --------
Operating Income (Loss) (17) (560) (101) (3,339) -83.2%
-2.4% -2.4% -17.2% -17.2%
Net Non-Operating Income
(Expenses) 82 2,725 110 3,638 -25.1%
------ -------- ------ -------- --------
Income (Loss) before Income
Tax 65 2,165 9 299 624.1%
9.2% 9.2% 1.5% 1.5%
Income Tax (Expense) Benefit (0) (0) (0) (0) -11.7%
------ -------- ------ -------- --------
Net Income (Loss) 65 2,165 9 299 624.1%
====== ======== ====== ======== --------
9.2% 9.2% 1.5% 1.5%
Earnings per Share 0.004 0.12 0.001 0.02
------ -------- ------ --------
Earnings per ADS (2) 0.018 0.60 0.003 0.10
------ -------- ------ --------
Weighted Average Number of
Shares
Outstanding (in millions) 18,434 18,452
-------- --------
----------------------------------------------------------------------
Note: (1) New Taiwan Dollars have been translated into U.S. Dollars at
the September 30, 2005 exchange rate of NT$33.16 per U.S. Dollar.
All figures are in ROC GAAP.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Income Statement
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
For the Three-Month For the Nine-Month
Period Ended Period Ended
September 30, 2005 September 30, 2005
---------------------- -----------------------
US$ NT$ % US$ NT$ %
------ -------- ------ ------- -------- ------
Net Sales 711 23,579 100.0% 1,909 63,307 100.0%
Cost of Goods Sold (622) (20,625) -87.5% (1,721) (57,084) -90.2%
------ -------- ------ ------- -------- ------
Net Gross Profit 89 2,954 12.5% 188 6,223 9.8%
------ -------- ------ ------- -------- ------
Operating Expenses
- Sales & Marketing 19 618 2.6% 50 1,668 2.6%
- General &
Administrative 26 877 3.7% 66 2,176 3.4%
- Research &
Development 61 2,019 8.6% 180 5,975 9.5%
------ -------- ------ ------- -------- ------
106 3,514 14.9% 296 9,819 15.5%
------ -------- ------ ------- -------- ------
Operating Income (Loss) (17) (560) -2.4% (108) (3,596) -5.7%
Net Non-Operating
Income (Expenses) 82 2,725 11.6% 228 7,580 12.0%
------ -------- ------ ------- -------- ------
Income (Loss) before
Income Tax 65 2,165 9.2% 120 3,984 6.3%
Income Tax (Expense)
Benefit (0) (0) 0.0% (0) (1) 0.0%
------ -------- ------ ------- -------- ------
Net Income (Loss) 65 2,165 9.2% 120 3,983 6.3%
====== ======== ====== ======= ======== ======
Earnings per Share 0.004 0.12 0.007 0.22
------ -------- ------- --------
Earnings per ADS (2) 0.018 0.60 0.033 1.10
------ -------- ------- --------
Weighted Average Number
of Shares
Outstanding (in
millions) 18,434 18,463
-------- --------
---------------------------------------------------------------------
Note: (1) New Taiwan Dollars have been translated into U.S. Dollars at
the September 30, 2005 exchange rate of NT$ 33.16 per U.S. Dollar.
All figures are in ROC GAAP.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Statement of Cash Flows
For The Nine Months Ended Septmber 30, 2005
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
US$ NT$
------------------------------
Cash flows from operating activities :
Net Income 120 3,983
Depreciation & Amortization 1,079 35,786
Reversal on allowance for doubtful
accounts (3) (120)
Long-term investment loss accounted
for under the equity method 83 2,762
Cash dividends received under the
equity method 22 725
Recovery on decline in market value
and absolesence of inventories (16) (548)
Gain on disposal of investments (259) (8,573)
Loss on disposal of property, plant
and equipment 0 11
Exchange loss on long-term
liabilities 5 144
Amortization of deferred grant
income (2) (56)
Change in working capital & others (109) (3,609)
------------------------------
Net cash provided from operating
activities 920 30,505
Cash flows from investing activities :
Cash proceeds from merger 28 944
Decrease in other financial assets,
net 19 631
Increase in short-term investments (2) (73)
Increase in long-term investments (102) (3,367)
Proceeds from disposal of long-term
investments 290 9,618
Proceeds from liquid of long-term
investments 3 95
Acquisition of property, plant and
equipment (343) (11,380)
Proceeds from disposal of property,
plant and equipment 4 120
Increase in other assets - others,
net (3) (114)
Increase in deferred charges (32) (1,059)
Increase in other receivables (155) (5,138)
------------------------------
Net cash used in investing
activities (293) (9,723)
Cash flows from financing activities :
Decrease in short-term loans, net (32) (1,074)
Repayment of long-term loans (487) (16,154)
Redemption of bonds (85) (2,820)
Decrease in deposits-in (0) (1)
Cash dividend (53) (1,759)
Treasury stock (349) (11,575)
Employee stock option 34 1,133
Remuneration to directors and
supervisors (1) (27)
------------------------------
Net cash used in financing
activities (973) (32,277)
Effect of exchange rate on cash and cash
equivalents (2) (60)
------------------------------
Net decrease in cash and cash
equivalents (348) (11,555)
------------------------------
Cash and cash equivalents at beginning
of period 2,513 83,347
Cash and cash equivalents at end of
period 2,165 71,792
==============================
----------------------------------------------------------------------
Note: New Taiwan Dollars have been translated into U.S. Dollars at the
Septmber 30, 2005 exchange rate of NT$ 33.16 per U.S. Dollar.
All figures are in ROC GAAP.
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