UMC Reports 2006 First Quarter Results: Results Top Forecast; Growth Expected to Further Accelerate Throughout the Year.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. , 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 -- 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 NYSE See: New York Stock Exchange :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 ; TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :2303)
First Quarter 2006 Overview(1):
-- Revenue increased 20.2% YoY from 1Q05 to NT$24.38 billion
(US$752 million)
-- Operating profit was NT$85 million (US$3 million)
-- Net income increased 303.6% sequentially to NT$12.29 billion
(US$379 million)
-- EPS was NT$0.67; EPADS was US$0.103
United Microelectronics Corporation (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 first quarter of 2006. "Demand in Q1 was very close to our original expectations," said UMC Chairman and 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. "In fact, it was even slightly better. Our performance in the quarter was at the upper range of our guidance, with revenue reaching NT$24.4 billion and profitability beating our earlier projections." Dr. Hu continued, "For Q2, as a whole, we believe that demand will be in line with seasonal norms. Computer sector demand will be relatively weak due to seasonal inventory adjustments. At the same time, we have seen 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. demand start to accelerate, which is about one to two months earlier than typical seasonal trends. Our understanding is that demand for entry-level en·try-lev·el adj. Appropriate for or accessible to one who is inexperienced in a field or new to a market: an entry-level job in advertising; an entry-level computer. handsets in developing markets such as India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , Africa, Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. and China will see very high growth this year. Therefore, handset related components should be in strong demand. In particular, our production of 90nm and 0.13um wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. for existing customers as well as new customers that have recently entered volume production will increase significantly. In addition, it is worth noting that we will start volume production for a graphic chip customer during the quarter. Therefore, our visibility looking beyond to the 3rd quarter is good, and we are expecting double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth and a large improvement in profitability." "We are also seeing strong demand for 65nm technologies, and are progressing smoothly in the roll-out of this process. UMC led all foundries with the delivery of its first 65nm customer product back into June June: see month. 2005. We are currently producing these 65nm chips at Fab 12A in small volume quantities and expect to receive eleven product tape-outs from eight customers by the end of this summer. We believe UMC's success at 65nm will lead the Company to continued growth in the coming years." Summary of Operating Results
Operating Results
======================================================================
(Amount: NT$ 1Q06 4Q05 QoQ % 1Q05 YoY %
million) change change
----------------------------------------------------------------------
Revenue 24,384 27,468 (11.2) 20,286 20.2
Gross Profit 3,255 4,973 (34.5) 3,057 6.5
Operating Expenses (3,170) (4,045) (21.6) (2,755) 15.1
Operating Income
(Loss) 85 928 (90.8) 302 (71.9)
Non-op. Income
(Expenses) 14,090 2,116 565.9 1,217 1057.8
Net Income 12,286 3,044 303.6 1,519 708.8
EPS (NT$ per share) 0.67 0.16 0.08
(US$ per ADS) 0.103 0.025 0.012
----------------------------------------------------------------------
Revenue decreased 11.2% QoQ to NT$24.38 billion, from NT$27.47 billion in 4Q05, and increased 20.2% YoY, from NT$20.29 billion in 1Q05. Gross profit was NT$3.26 billion, or 13.3% of revenue, compared to NT$4.97 billion, or 18.1% of 4Q05 revenue. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the quarter was NT$85 million, or 0.3% of revenue, compared to NT$928 million, or 3.4% of 4Q05 revenue. Lower 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 due to a seasonal order adjustment by several customers was the primary reason for the decrease in profits, and gross and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: during the first quarter. Non-operating income was NT$14.09 billion and net income was NT$12.29 billion in 1Q06. Both were significantly higher than those of 4Q05, mainly due to the investment disposal gain of Hsun Chieh Investments Corp. in January January: see month. 2006. 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$0.67. Earnings per ADS (EPADS EPADS Earnings Per Average Diluted Share ) were US$0.103. This compares with 4Q05 earnings per ordinary share of NT$0.16 and earnings per ADS of US$0.025. One ADS represents five Taiwan listed ordinary shares. The basic weighted average outstanding shares in 1Q06 were 18,454,530,476 shares, compared with 18,257,183,074 shares in 4Q05 and 18,502,837,168 shares in 1Q05. 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 outstanding shares were 19,053,224,988 shares in 1Q06, compared with 18,545,963,971 shares in 4Q05 and 18,587,343,391 shares in 1Q05. The increase in the number of basic and diluted weighted average outstanding shares was mainly due to the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of UMC shares held by Hsun Chieh Investments Corp, which were reclassified from treasury stock to outstanding stock after UMC sold 63.5% of Hsun Chieh Investments Corp. on Jan. 27, 2006. Detailed Financials Section Depreciation and amortization expenses totaled NT$12.09 billion in 1Q06, compared to NT$12.73 billion in 4Q05. 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
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased by 21.6% to NT$3.17 billion. G&A expenses decreased to NT$532 million, largely because of the adoption of revised SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 25 starting on Jan. 1, 2006. Under the revised rule, goodwill is not amortized. Instead, it has to be tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. at least annually under SFAS No. 35. The total R&D expense was 8.3% of revenue in 1Q06. COGS & Expenses ====================================================================== (Amount: NT$ 1Q06 4Q05 QoQ % 1Q05 YoY % million) change change ---------------------------------------------------------------------- Revenue 24,384 27,468 (11.2) 20,286 20.2 COGS (21,129) (22,495) (6.1) (17,229) 22.6 Depreciation (10,566) (10,969) (3.7) (9,385) 12.6 Other Mfg. Costs (10,563) (11,526) (8.4) (7,844) 34.7 Gross Profit 3,255 4,973 (34.5) 3,057 6.5 Gross Margin (%) 13.3% 18.1% 15.1% Total Operating Exp. (3,170) (4,045) (21.6) (2,755) 15.1 G&A (532) (1,050) (49.3) (447) 19.0 Sales & Marketing (612) (612) 0.0 (521) 17.5 R&D (2,026) (2,383) (15.0) (1,787) 13.4 Operating Income(Loss) 85 928 (90.8) 302 (71.9) Operating Margin (%) 0.3% 3.4% 1.5% ---------------------------------------------------------------------- Net non-operating income during 1Q06 was NT$14.09 billion, which did not include the one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. NT$1.19 billion of cumulative effect on adoption of SFAS No. 34. Gains on the disposal of investments were NT$14.24 billion. This included gains from the sale of Hsun Chieh Investments Corp. and 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. shares amounting to NT$13.15 billion and NT$565 million respectively. Net investment losses were NT$437 million, which included losses on valuation of financial assets Financial assets Claims on real assets. under newly enacted SFAS No.34 and a NT$286 million loss from UMCJ in 1Q06. Non-operating Income (Expenses) ====================================================================== (Amount: NT$ million) 1Q06 4Q05 1Q05 ---------------------------------------------------------------------- Net Non-operating Income (Exp.) 14,090 2,116 1,217 Net Interest Income (Expense) 137 38 0 Net Investment Income (Loss) (437) 142 (1,705) Gain on Disposal of Investment 14,244 1,523 2,924 Exchange Gain (Loss) 42 40 (172) Others 104 373 170 ---------------------------------------------------------------------- The net cash outflow was NT$225 million in 1Q06. The decrease in operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. mainly reflects lower revenue during the quarter. The financing cash outflow included NT$14.78 billion in cash outflow for share repurchases 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. . Over the next 12 months, the company expects to repay NT$10.25 billion in corporate bonds.
Cash Flow Summary
======================================================================
For the 3-Month For the 3-Month
(Amount: NT$ million) Period Ended Period Ended
Mar. 31, 2006 Dec. 31, 2005
----------------------------------------------------------------------
Cash Flow from Operations 12,330 15,507
Net Income 12,286 3,044
Depreciation & Amortization 12,088 12,731
Changes in working capital 717 1,678
Others (12,761) (1,946)
Cash Flow from Investing 1,469 1,939
Capital Expenditures (6,142) (7,207)
Others 7,611 9,146
Cash Flow from Financing (14,031) 7,354
Effect of Exchange Rate 7 5
Net Cash Flow (225) 24,805
----------------------------------------------------------------------
Cash and cash equivalents decreased NT$225 million to NT$96.37 billion. The decrease in inventory came from the decrease of work-in-process wafers and finished goods. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (2) increased slightly to 45 days, and average inventory turnover increased to 43 days. Current Assets ====================================================================== (Amount: NT$ billion) 1Q06 4Q05 1Q05 ---------------------------------------------------------------------- Cash & Cash Equivalents 96.37 96.60 88.70 Notes & Accounts Receivable 11.80 12.36 9.31 Days Sales Outstanding 45 43 45 Inventory 9.61 9.96 6.91 Avg. Inventory Turnover 43 40 41 Total Current Assets 126.29 128.27 116.47 ---------------------------------------------------------------------- Total liabilities increased slightly by NT$0.93 billion to NT$68.87 billion in 1Q06. UMC's Debt to Equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. was 24% at the end of 1Q06. Liabilities ====================================================================== (Amount: NT$ billion) 1Q06 4Q05 1Q05 ---------------------------------------------------------------------- Total Current Liabilities 29.56 28.30 19.98 Accounts Payable 4.19 4.10 3.77 Short-term Credit / Bonds 10.25 10.25 6.68 Others 15.12 13.95 9.53 Long-term Liabilities 35.68 36.01 33.60 Total Liabilities 68.87 67.94 56.58 Debt to Equity 24% 26% 21% ---------------------------------------------------------------------- Analysis of Revenue(3) Revenue from the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. region accounted for 46% of total revenue in 1Q06, down from 49% in 4Q05, mainly due to seasonally soft demand, particularly from the communication segment. Revenue Breakdown by Region ---------------------------------------------------------------------- Region 1Q06 4Q05 3Q05 2Q05 1Q05 ====================================================================== North America 46% 49% 48% 44% 49% ---------------------------------------------------------------------- Asia Pacific 43% 42% 43% 45% 38% ---------------------------------------------------------------------- Europe 9% 7% 7% 9% 11% ---------------------------------------------------------------------- Japan 2% 2% 2% 2% 2% ---------------------------------------------------------------------- The percentage of revenue from 90nm and 0.13um business decreased to 33% QoQ from 38% in 4Q05, mainly due to soft demand for communication chips. The percentage of revenue from 0.18um and below was 66% in 1Q06, which was slightly better than the 65% level that was predicted in our original guidance. Revenue Breakdown by Geometry ---------------------------------------------------------------------- Geometry 1Q06 4Q05 3Q05 2Q05 1Q05 ====================================================================== 90nm 13% 15% 14% 9% 7% ---------------------------------------------------------------------- 0.13um 20% 23% 18% 14% 20% ---------------------------------------------------------------------- 0.15um 12% 10% 10% 10% 12% ---------------------------------------------------------------------- 0.15um(less than)x(less than)=0.18um 21% 19% 19% 20% 20% ---------------------------------------------------------------------- 0.18um(less than)x(less than)=0.25um 5% 6% 8% 11% 10% ---------------------------------------------------------------------- 0.25um(less than)x(less than)=0.35um 21% 19% 22% 25% 20% ---------------------------------------------------------------------- 0.5um and above 8% 8% 9% 11% 11% ---------------------------------------------------------------------- The percentage of revenue from 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 increased to 73% in 1Q06 from 67% in 4Q05. Revenue Breakdown by Customer Type ---------------------------------------------------------------------- Customer Type 1Q06 4Q05 3Q05 2Q05 1Q05 ====================================================================== Fabless 73% 67% 71% 76% 69% ---------------------------------------------------------------------- IDM 27% 33% 29% 24% 31% ---------------------------------------------------------------------- System 0% 0% 0% 0% 0% ---------------------------------------------------------------------- Revenue from the communication segment decreased to 51% of total revenue in 1Q06 due to a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of orders from both wired and wireless communication customers in 4Q05. The percentage of revenue from the computer segment decreased to 19% due to softness in seasonal demand for 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 peripheral Any input, output or storage device connected externally or internally to the computer's CPU, such as a monitor, keyboard, printer, disk, tape, graphics tablet, scanner, joy stick, paddle or mouse. components.
Revenue Breakdown by Application (1)
----------------------------------------------------------------------
Application 1Q06 4Q05 3Q05 2Q05 1Q05
======================================================================
Computer 19% 20% 19% 20% 24%
----------------------------------------------------------------------
Communication 51% 54% 47% 44% 45%
----------------------------------------------------------------------
Consumer 28% 24% 32% 32% 26%
----------------------------------------------------------------------
Memory 1% 1% 1% 2% 2%
----------------------------------------------------------------------
Others 1% 1% 1% 2% 3%
----------------------------------------------------------------------
(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 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: 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 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). ) decreased by 2% during 1Q06 due to lower demand for leading-edge process technologies. (To view ASP trend, visit http://www.umc.com/english/investors/1Q06_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) 754 thousand 8-inch equivalent wafers were shipped in 1Q06, which was a 6.9% decrease from the 810 thousand 8-inch equivalent wafers that were shipped in the previous quarter, but a 33.7% increase over 1Q05. Overall utilization rate for the quarter was 79%. This utilization rate includes a 5% loss in productivity due to scheduled annual maintenance.
Wafer Shipments
----------------------------------------------------------------------
1Q06 4Q05 3Q05 2Q05 1Q05
======================================================================
Wafer Shipments
('000 8-inch eq.) 754 810 741 630 564
----------------------------------------------------------------------
Quarterly Capacity Utilization Rate
----------------------------------------------------------------------
1Q06 4Q05 3Q05 2Q05 1Q05
======================================================================
Utilization Rate 79%(1) 86% 78% 65% 63%(2)
----------------------------------------------------------------------
Total Capacity
('000 8-inch eq.) 985 973 970 962 950
----------------------------------------------------------------------
(1) 1Q06 utilization rate was calculated based on 1Q06 available
capacity, which is about 95% of total capacity after factoring in
a 5% productivity loss due to annual scheduled maintenance.
(2) 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) Total capacity during 1Q06 was 985 thousand 8-inch equivalent wafers, which was an increase of 12 thousand 8-inch equivalent wafers compared to 4Q05. The increase was mainly due to capacity expansion at Fab 12A. The installed capacity in 2Q06 is expected to be 1,002 thousand 8-inch equivalent wafers. The increase in estimated capacity during 2Q06 is expected to come from additional 12-inch capacity expansion at Fab 12A and Fab 12i.
Annual Capacity in
thousands of 8-inch wafer equivalents
-----------------------------------------------------
FAB Geometry
(um) 2005 2004 2003 2002
=====================================================
Fab 6A 6" 3.5 - 0.45 344 346 352 349
-----------------------------------------------------
Fab 8AB 8" 0.5 - 0.25 816 796 801 853
-----------------------------------------------------
Fab 8C 8" 0.35 - 0.15 401 386 325 355
-----------------------------------------------------
Fab 8D 8" 0.18 - 0.09 274 256 238 214
-----------------------------------------------------
Fab 8E 8" 0.5 - 0.18 404 401 354 376
-----------------------------------------------------
Fab 8F 8" 0.25 - 0.15 378 349 342 312
-----------------------------------------------------
Fab 8S(1)8" 0.25 - 0.15 278 131 0 0
-----------------------------------------------------
Fab 12A 12"0.18 - 0.065 597 392 234 119
-----------------------------------------------------
Fab12i(2)12"0.13 - 0.065 363 101 0 0
=====================================================
Total(3) 3,855 3,158 2,646 2,578
=====================================================
YoY Growth Rate 22% 19% 3% -11%
-----------------------------------------------------
Quarterly Capacity in
thousands of 8-inch wafer equivalents
------------------------------------------
FAB 2Q06E 1Q06 4Q05 3Q05
==========================================
Fab 6A 82 82 86 86
------------------------------------------
Fab 8AB 204 204 204 204
------------------------------------------
Fab 8C 100 100 100 100
------------------------------------------
Fab 8D 63 63 66 68
------------------------------------------
Fab 8E 101 101 101 101
------------------------------------------
Fab 8F 93 93 93 95
------------------------------------------
Fab 8S
69 69 69 69
------------------------------------------
Fab 12A 191 178 160 153
------------------------------------------
Fab 12i
99 95 94 94
==========================================
Total(3) 1,002 985 973 970
------------------------------------------
(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(62/82) 8-inch equivalent
wafer; one 12-inch wafer is converted into 2.25(122/82) 8-inch
equivalent wafers.
CAPEX CAPEX plans for 2006 remain unchanged at US$1 billion. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 97% of the spending is likely to be for expansion and R&D at our 300mm facilities. Total capital expenditure during 1Q06 was US$189 million.
UMC Capital Expenditure by Year
----------------------------------------------------------------------
(US$ billion) 2005 2004 2003 2002 2001 2000
======================================================================
CAPEX $0.7(1) $1.53 $0.37 $0.8 $1.1 $2.8
----------------------------------------------------------------------
2006 CAPEX Plan
----------------------------------------------------------------------
8" fab 12" fab 12" R&D Total
======================================================================
UMC 3% 83% 14% US$1 billion
----------------------------------------------------------------------
(1) 2005 CAPEX contained UMC 2005 full year CAPEX and UMCi CAPEX
during 1Q05.
Recent Developments / Announcements
Apr. 25, 2006 Sidense to Deliver OTP Cores in UMC's 90nm and 65nm
Process Nodes
Apr. 19, 2006 UMC Delivers New SONOS Memory to Solid State System Co.
Apr. 13, 2006 SOCLE's New ARM926EJ-Based SoC Platform Validated on
UMC's 90nm Process
Apr. 11, 2006 Silicon Image to Port HDMI(TM) Receiver IP Core to UMC's
90nm Process Technology
Mar. 17, 2006 UMC Board of Directors Announces Proposals for its 2006
Annual General Meeting
On March 17, 2006, UMC held a meeting of the Board of
Directors and Supervisors, at which the Board submitted
proposals to be resolved at the Annual General Meeting
and approved the 2005 Business Report and Financial
Statements. The 2006 AGM will be held on June 12, 2006
at the UMC Recreation Center in Hsinchu Science Park. A
brief summary of the proposals is as follows:
-- Stock dividend of NT$895,158,360 (estimated NT$0.05
per share at par value)
-- Cash dividend of NT$7,161,266,830 (estimated NT$0.4
per share)
-- Share issuance from capitalization of capital
reserve of NT$895,158,360 (estimated NT$0.05 per
share at par value)
-- Issuance of employee bonus of 45,845,444 shares and
NT$305,636,290 cash (estimated stock dilution effect
of the employee stock bonus issuance is
approximately 0.2%.)
Mar. 01, 2006 UMC's Integrated DFM Solutions Target Today's 90nm SoC
Designers
Feb. 27, 2006 Impinj and UMC Align to Deliver Logic NVM Cores on
0.18um and 0.13um Process Technologies
Feb. 21, 2006 UMC Fabricates World's Highest Frequency Silicon Circuit
Using CMOS - 192-GHz Voltage-Controlled Oscillator
Feb. 15, 2006 UMC Announces its 10th Share Buy-Back Program
On Feb. 15, 2006, UMC announced its 10th share buy-back
program: to repurchase 1 billion shares, or 5.05% of the
total issued shares, from open market and write them
off. On Apr. 11, 2006, UMC completed the 1 billion share
buy-back program with average buy-back price of NT$19.65
per share. Those 1 billion shares are in the process of
cancellation.
Feb. 14, 2006 UMC 4Q 2005 Financial Results
Please visit UMC's website http://www.umc.com/english/news/index.asp
for further details regarding the above announcements.
Second Quarter of 2006 Outlook & Guidance Quarter-over-quarter Guidance: --Wafer shipments: to increase by 5-6 % points --Wafer ASP in US$: to increase by 2 % points --Capacity utilization rate: approximately 80% --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 be two thirds of the revenue while 90nm is expected to be in the mid-teen % --The communication segment is expected to be the strongest followed by consumer segment and computer segment --2006 CAPEX budget: US$1 billion Conference Call / Webcast Announcement
Wednesday, April 26, 2006
Time: 8:00 PM (Taipei) / 8:00 AM (New York) / 1:00 PM (London)
Dial-in numbers and Access Codes:
Asia/Europe: +1-617-213-8891
North America: 866-270-6057
Access Code: UMCCall
A live webcast and replay of the 1Q06 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 See SoC. (SoC) designs, including volume production 90nm, industry-leading 65nm, and mixed signal/RFCMOS. UMC's 10 wafer manufacturing facilities include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i are both in volume production for a variety of customer products. The company employs approximately 12,000 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.
NOTES
(1) Unless otherwise stated, all financial figures discussed in this
announcement are prepared in accordance with ROC GAAP, which
differ in some material respects from generally accepted
accounting principles in the United States. They are unaudited,
unconsolidated, and represent comparisons among the three-month
period ending March 31, 2006, the three-month period ending
December 31, 2005, and the equivalent three-month period that
ended March 31, 2005. For all 1Q06 results, New Taiwan Dollar
(NT$) amounts have been converted into U.S. dollars at the
exchange rate of NT$32.44 to one U.S. dollar.
(2) Days Sales Outstanding = 365/ (Operating revenues 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.
(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.
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 amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Annual Report on Form 20-F/A for the year ended December December: see month. 31, 2004 filed with the U.S. Securities and Exchange Commission on February February: see month. 13, 2006. The financial statements included in this release are unaudited and unconsolidated, and prepared and published 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). . 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/A for the year ended December 31, 2004 filed with the U.S. Securities and Exchange Commission on February 13, 2006. 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 March 31, 2006
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
March 31, 2006
----------------------------------
US$ NT$ %
------------ --------- ---------
ASSETS
Current Assets
Cash and Cash Equivalents 2,970 96,372 26.7%
Trading Securities 46 1,498 0.4%
Notes & Accounts Receivable 365 11,803 3.3%
Inventories 296 9,613 2.6%
Other Current Assets 216 7,006 1.9%
------------ --------- ---------
Total Current Assets 3,893 126,292 34.9%
------------ --------- ---------
Non-Current Assets
Funds and Long-term Investments 2,509 81,404 22.5%
Property, Plant and Equipment 4,406 142,927 39.7%
Intangible Assets 126 4,073 1.1%
Other Assets 200 6,503 1.8%
------------ --------- ---------
Total Non-Current Assets 7,241 234,907 65.1%
------------ --------- ---------
TOTAL ASSETS 11,134 361,199 100.0%
============ ========= =========
LIABILITIES
Current Liabilities
Payables 480 15,561 4.3%
Current Portion of Long-term
Interest-Bearing Liabilities 316 10,250 2.9%
Other Current Liabilities 115 3,745 1.0%
------------ --------- ---------
Total Current Liabilities 911 29,556 8.2%
------------ --------- ---------
Non-Current Liabilities
Bonds Payable 1,100 35,676 9.9%
Other Liabilities 112 3,634 1.0%
------------ --------- ---------
Total Non-Current Liabilities 1,212 39,310 10.9%
------------ --------- ---------
TOTAL LIABILITIES 2,123 68,866 19.1%
------------ --------- ---------
STOCKHOLDERS' EQUITY
Capital Stock 6,118 198,452 54.9%
Capital Reserve 2,205 71,543 19.8%
Retained Earnings, Unrealized
Holding Gain from Available-for-
Sale Securities and Translation
Adjustment 1,843 59,791 16.6%
Treasury Stock (1,155) (37,453) -10.4%
------------ --------- ---------
TOTAL STOCKHOLDERS' EQUITY 9,011 292,333 80.9%
------------ --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 11,134 361,199 100.0%
============ ========= =========
---------------------------------------------------------------------
Note: New Taiwan Dollars have been translated into U.S. Dollars at the
March 31, 2006 exchange rate of NT$32.44 per U.S. Dollar.
All figures are in ROC GAAP.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Income Statement
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
Year over Year Comparison
--------------------------------------------------
Three-Month Period Ended
March 31, 2006 March 31, 2005 %
----------------- --------------------- ----------
US$ NT$ US$ NT$ Chg.
------- --------- ---------- ---------- ----------
Net Sales 752 24,384 625 20,286 20.2%
Cost of Goods Sold (651) (21,129) (531) (17,229) 22.6%
------- --------- ---------- ---------- ----------
Net Gross Profit 101 3,255 94 3,057 6.5%
------- --------- ---------- ---------- ----------
13.3% 13.3% 15.1% 15.1%
Operating Expenses
- Sales &
Marketing 19 612 16 521 17.5%
- General &
Administrative 16 532 14 447 19.0%
- Research &
Development 63 2,026 55 1,787 13.4%
------- --------- ---------- ---------- ----------
98 3,170 85 2,755 15.1%
------- --------- ---------- ---------- ----------
Operating Income
(Loss) 3 85 9 302 -71.9%
0.3% 0.3% 1.5% 1.5%
Net Non-Operating
Income (Expenses) 434 14,090 38 1,217 1057.8%
------- --------- ---------- ---------- ----------
Income (Loss) from
continuing
operations before
income tax 437 14,175 47 1,519 833.2%
58.1% 58.1% 7.5% 7.5%
Income Tax (Expense)
Benefit (21) (700) (0) (0) 721830.9%
------- --------- ---------- ---------- ----------
Income (Loss) from
continuing
operations 416 13,475 47 1,519 787.1%
Cumulative effect of
changes in
accounting
principles (37) (1,189) - - -
------- --------- ---------- ---------- ----------
Net Income (Loss) 379 12,286 47 1,519 708.8%
======= ========= ========== ========== ----------
50.4% 50.4% 7.5% 7.5%
Earnings per Share 0.021 0.67 0.002 0.08
------- --------- ---------- ----------
Earnings per ADS(2) 0.103 3.35 0.012 0.40
------- --------- ---------- ----------
Weighted Average
Number of Shares
Outstanding
(in millions) 18,455 18,503
--------- ----------
Quarter over Quarter Comparison
-------------------------------------------------
Three-Month Period Ended
March 31, 2006 December 31, 2005 %
------------------ ------------------- ----------
US$ NT$ US$ NT$ Chg.
--------- -------- -------- ---------- ----------
Net Sales 752 24,384 847 27,468 -11.2%
Cost of Goods Sold (651) (21,129) (694) (22,495) -6.1%
--------- -------- -------- ---------- ----------
Net Gross Profit 101 3,255 153 4,973 -34.5%
--------- -------- -------- ---------- ----------
13.3% 13.3% 18.1% 18.1%
Operating Expenses
- Sales &
Marketing 19 612 19 612 0.0%
- General &
Administrative 16 532 32 1,050 -49.3%
- Research &
Development 63 2,026 73 2,383 -15.0%
--------- -------- -------- ---------- ----------
98 3,170 124 4,045 -21.6%
--------- -------- -------- ---------- ----------
Operating Income
(Loss) 3 85 29 928 -90.8%
0.3% 0.3% 3.4% 3.4%
Net Non-Operating
Income (Expenses) 434 14,090 65 2,116 565.9%
--------- -------- -------- ---------- ----------
Income (Loss) from
continuing
operations before
income tax 437 14,175 94 3,044 365.7%
58.1% 58.1% 11.1% 11.1%
Income Tax (Expense)
Benefit (21) (700) (0) (0) 397782.4%
--------- -------- -------- ---------- ----------
Income (Loss) from
continuing
operations 416 13,475 94 3,044 342.7%
Cumulative effect of
changes in
accounting
principles (37) (1,189) - - -
--------- -------- -------- ---------- ----------
Net Income (Loss) 379 12,286 94 3,044 303.6%
========= ======== ======== ========== ----------
50.4% 50.4% 11.1% 11.1%
Earnings per Share 0.021 0.67 0.005 0.16
--------- -------- -------- ----------
Earnings per ADS(2) 0.103 3.35 0.025 0.80
--------- -------- -------- ----------
Weighted Average
Number of Shares
Outstanding (in
millions) 18,455 18,257
-------- ----------
----------------------------------------------------------------------
Note:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the
March 31, 2006 exchange rate of NT$32.44 per U.S. Dollar. All
figures are in ROC GAAP.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Income Statement
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
For the Three-Month For the year Ended
Period Ended
March 31, 2006 March 31, 2006
---------------------- ----------------------
US$ NT$ % US$ NT$ %
------ -------- ------ ------ -------- ------
Net Sales 752 24,384 100.0% 752 24,384 100.0%
Cost of Goods Sold (651) (21,129) -86.7% (651) (21,129) -86.7%
------ -------- ------ ------ -------- ------
Net Gross Profit 101 3,255 13.3% 101 3,255 13.3%
------ -------- ------ ------ -------- ------
Operating Expenses
- Sales & Marketing 19 612 2.5% 19 612 2.5%
- General &
Administrative 16 532 2.2% 16 532 2.2%
- Research &
Development 63 2,026 8.3% 63 2,026 8.3%
------ -------- ------ ------ -------- ------
98 3,170 13.0% 98 3,170 13.0%
------ -------- ------ ------ -------- ------
Operating Income (Loss) 3 85 0.3% 3 85 0.3%
Net Non-Operating Income
(Expenses) 434 14,090 57.8% 434 14,090 57.8%
------ -------- ------ ------ -------- ------
Income (Loss) from
continuing operations
before income tax 437 14,175 58.1% 437 14,175 58.1%
Income Tax (Expense)
Benefit (21) (700) -2.8% (21) (700) -2.8%
------ -------- ------ ------ -------- ------
Income (Loss) from
continuing operations 416 13,475 55.3% 416 13,475 55.3%
Cumulative effect of
changes in accounting
principles (37) (1,189) -4.9% (37) (1,189) -4.9%
------ -------- ------ ------ -------- ------
Net Income (Loss) 379 12,286 50.4% 379 12,286 50.4%
====== ======== ====== ====== ======== ======
Earnings per Share 0.021 0.67 0.021 0.67
------ -------- ------ --------
Earnings per ADS (2) 0.103 3.35 0.103 3.35
------ -------- ------ --------
Weighted Average Number
of Shares
Outstanding (in millions) 18,455 18,455
-------- --------
----------------------------------------------------------------------
Note:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the
March 31, 2006 exchange rate of NT$32.44 per U.S. Dollar. All
figures are in ROC GAAP.
(2) 1 ADS equals 5 common shares.
UNITED MICROELECTRONICS CORPORATION
Unaudited Condensed Unconsolidated Statement of Cash Flows
For The Three Months Ended March 31, 2006
Figures in Million of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
US$ NT$
------ --------
Cash flows from operating activities :
Net Income 379 12,286
Depreciation & Amortization 373 12,088
Bond discount amortization 1 25
Reversal on allowance for doubtful accounts (1) (21)
Loss on valuation of financial assets and
liabilities 52 1,676
Long-term investment loss accounted for under
the equity method 0 2
Decline in market value and absolesence of
inventories 1 33
Gain on disposal of investments (439) (14,244)
Gain on disposal of property, plant and
equipment (1) (23)
Exchange loss on financial assets and
liabilities 0 11
Exchange gain on long-term liabilities (6) (187)
Amortization of deferred grant income (1) (33)
Change in working capital & others 22 717
------ --------
Net cash provided from operating activities 380 12,330
Cash flows from investing activities :
Increase in funds and long-term investments (19) (630)
Proceeds from disposal of funds and long-term
investments 258 8,384
Acquisition of property, plant and equipment (189) (6,142)
Proceeds from disposal of property, plant and
equipment 1 39
Decrease in other assets - others, net 1 39
Increase in deferred charges (7) (221)
------ --------
Net cash provided from investing activities 45 1,469
Cash flows from financing activities :
Treasury stock (455) (14,776)
Employee stock option 23 745
------ --------
Net cash used in financing activities (432) (14,031)
Effect of exchange rate on cash and cash equivalents 0 7
------ --------
Net decrease in cash and cash equivalents (7) (225)
------ --------
Cash and cash equivalents at beginning of period 2,977 96,597
Cash and cash equivalents at end of period 2,970 96,372
====== ========
----------------------------------------------------------------------
Note: New Taiwan Dollars have been translated into U.S. Dollars at the
March 31, 2006 exchange rate of NT$ 32.44 per U.S. Dollar.
All figures are in ROC GAAP.
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