Financial Data and Key Metrics - Q3 2024 consolidated revenue was NT$50.5 billion, with gross margins at 33.8% [5] - Net income attributable to stockholders was NT$14.5 billion, and EPS was NT$1.16 [5] - Capacity utilization rate increased slightly to 71% from 68% in the previous quarter [5] - Sequential operating revenue grew 6.5% to NT$60.5 billion, while gross margin declined to 33.8% from 35.2% [6] - Cumulative revenue for the first three quarters of 2024 grew 2.6% to NT$171.9 billion, with a gross margin rate of 33.3% [7] - Cash dividend payout remained above NT$100 billion, reaching NT$103.4 billion at the end of Q3 2024 [8] - Total equity reached NT$368.5 billion at the end of Q3 2024 [8] Business Line Data and Key Metrics - Wafer shipments grew 7.8% sequentially due to strong demand for 22 and 28 nanometer products [13] - Revenue from specialty technology solutions reached a record high, accounting for 53.1% of total sales [13] - 22 to 28 nanometer revenue reached a record high of 35% in Q3 2024, while 40 nanometer remained stable at 13% [10] - Communication segment increased to 42% of revenue, while the computer segment declined to 13% [10] - IDM revenue rebounded to 15% in Q3 2024 [10] Market Data and Key Metrics - Asia represents 65% of total revenue, while Europe declined by 2 percentage points to 5% [9] - The company's 12A facility in Taiwan continues to increase leading-edge capacity, with a full-year capacity increase expected to exceed 7% [11] Company Strategy and Industry Competition - The company focuses on developing specialty technology solutions to deliver best-in-class performance [13] - Significant investments are made annually in technology development to support next-generation product features [14] - The company's diversified manufacturing footprint, including new fab expansion in Singapore and collaboration with Intel, enhances its value proposition [16] - The company revised its annual CapEx budget from NT$3.3 billion to NT$3 billion, reflecting updates to the Singapore capacity expansion schedule [11] Management Commentary on Operating Environment and Future Outlook - Demand is stabilizing across markets, with a clear downward trend in inventory levels [15] - The company expects flat wafer shipments and ASP in Q4 2024, with gross margins close to 30% and capacity utilization in the high 60% range [17] - The company foresees strong momentum in the upcoming months, driven by technology differentiation and customer collaboration [14][16] Other Important Information - The company maintains pricing resilience despite industry oversupply, with no significant changes in blended ASP [9][21] - The company anticipates a one-off pricing adjustment in early 2025, similar to the adjustment made in Q1 2024 [23][24] Q&A Session Summary Question: What is driving the better-than-expected Q4 revenue? - The computing segment is performing slightly better than expected, offsetting mild declines in communication and consumer segments [19] Question: Is there pricing stabilization or further competition expected? - Pricing remains flat for Q4 2024, with resilience demonstrated during demand/supply imbalances [21][22] - A one-off pricing adjustment is expected in early 2025, similar to Q1 2024 [23][24] Question: Why is Q4 gross margin expected to decline to 30%? - Lower capacity utilization (high 50% vs. 71% in Q3) and NT dollar appreciation are key factors [25] - Higher depreciation from capacity expansion will impact margins for several quarters [25][26] Question: What is the outlook for inventory levels and utilization rates? - Inventory levels in communication, consumer, and computing segments have normalized, while automotive and industrial segments may take until Q2 2025 to normalize [30] - Utilization rates are expected to rebound to 80%+ as the market recovers [31][32] Question: What is the strategy for 8-inch capacity? - The company has no plans to reduce 8-inch capacity and expects gradual improvement driven by differentiated technology solutions [34] Question: How is the Intel collaboration progressing? - The 12-nanometer collaboration is on track, with strong customer interest and potential for accelerated production schedules [36][37] - Applications focus on communication and consumer products, with capacity and profit-sharing details to be shared later [39] Question: What is the long-term gross margin outlook? - The company expects gross margins to stabilize in the low 30% to low 40% range post-2025, driven by cost management and technology differentiation [43][44] Question: How is the company managing geopolitical risks? - The company's diversified manufacturing footprint and technology differentiation mitigate oversupply risks and provide supply chain resilience [65][66] - Opportunities exist in customer porting projects and collaborations, such as the Intel partnership [67][69] Question: What is the outlook for RF SOI and OLED driver IC technologies? - The company is gaining market share in RF SOI and expanding its OLED driver IC solutions beyond smartphones [61][63] - The 22-nanometer OLED driver is expected to remain mainstream for the next 2-3 years [64] Question: What is the oversupply situation for 28-nanometer? - Despite oversupply, the company's 22 and 28-nanometer loading remains resilient, with growth expected in communication, computing, and consumer segments [71][72] Question: What is the depreciation growth outlook for 2025? - Depreciation growth in 2025 is expected to be slightly higher than the 20% increase seen in 2024 [77]

Core Viewpoint - United Microelectronics Corporation (UMC) is conducting its Q4 2024 earnings conference call, focusing on financial results and future guidance [1][2]. Financial Results - UMC's quarterly financial reports are accessible on their website, indicating transparency in financial disclosures [3]. Management Insights - The conference features key presentations from UMC's CFO and President, highlighting the company's focus and guidance for Q4 2024 [2].

UMC UNITED FOR EXCELLENCE UMC 3Q24 Financial Review October 30, 2024 NOTE CONCERNING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. These forward looking statements include, but are not limited to, statements relating t ...

United Microelectronics Corporation (UMC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Esti ...

Core Viewpoint - United Microelectronics Corporation (UMC) has faced significant selling pressure, resulting in a 9.1% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1]. Group 1: Technical Indicators - UMC's Relative Strength Index (RSI) is at 29.9, suggesting that the heavy selling may be exhausting, which could lead to a price rebound as the stock seeks to return to its previous equilibrium of supply and demand [3]. - The RSI is a momentum oscillator that ranges from 0 to 100, with a reading below 30 typically indicating that a stock is oversold, thus presenting potential entry opportunities for investors [2]. Group 2: Fundamental Indicators - There has been a strong consensus among sell-side analysts to raise earnings estimates for UMC, resulting in a 2.3% increase in the consensus EPS estimate over the last 30 days, which often correlates with near-term price appreciation [4]. - UMC holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [4].

Core Insights - United Microelectronics Corporation (UMC) currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while GlobalFoundries Inc. (GFS) has a Zacks Rank of 3 (Hold) [1] - UMC has a forward P/E ratio of 12.18, significantly lower than GFS's forward P/E of 28.63, suggesting UMC may be undervalued [2] - UMC's PEG ratio is 4.24 compared to GFS's 5.05, indicating UMC has a more favorable earnings growth outlook relative to its valuation [2] - UMC's P/B ratio stands at 1.82, while GFS's P/B ratio is 1.97, further supporting UMC's stronger valuation metrics [2] - UMC has received a Value grade of A, while GFS has a Value grade of C, highlighting UMC's superior valuation attractiveness [3] Valuation Metrics - UMC's forward P/E ratio is 12.18, while GFS's is 28.63 [2] - UMC's PEG ratio is 4.24, compared to GFS's 5.05 [2] - UMC's P/B ratio is 1.82, while GFS's is 1.97 [2] Investment Outlook - UMC has experienced stronger estimate revision activity and possesses more attractive valuation metrics than GFS, making it a more appealing option for value investors [3]

Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of United Microelectronics Corporation (UMC) and GlobalFoundries Inc. (GFS) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earn ...

Photomick Introduction United Microelectronics Corporation (NYSE:UMC) reported Q2 earnings relatively recently, so I wanted to revisit the company to see how it performed, where it is heading in the long term, and whether my strong buy position still stands. The last time I covered the company was back in April, when I said that the worst seemed to have passed. The latest quarter cemented that view further, and I feel even more confident in the company’s long-term outlook. I think an investment in Unite ...

[Review Report of Independent Auditors](index=2&type=section&id=Review%20Report%20of%20Independent%20Auditors) [Conclusion and Scope](index=2&type=section&id=Conclusion%20and%20Scope) Ernst & Young, Taiwan, concluded that UMC's consolidated financial statements for H1 2024 and 2023 are fairly presented based on a limited scope review - The auditors issued a clean review conclusion, finding no material misstatements in the financial statements[6](index=6&type=chunk) - The review excluded certain equity-method associates and joint ventures, representing **5.12% of total consolidated assets**, relying on other auditors' reports[8](index=8&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to NT$587.0 billion by June 30, 2024, driven by PP&E, while liabilities rose and equity slightly decreased Key Balance Sheet Items (in thousands of NTD) | Account | June 30, 2024 | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $207,214,698 | $216,797,392 | $239,032,757 | | **Property, Plant and Equipment** | $274,030,951 | $239,123,248 | $198,618,079 | | **Total Assets** | $586,961,945 | $559,186,927 | $553,195,664 | | **Total Current Liabilities** | $124,973,558 | $99,014,733 | $142,978,303 | | **Total Liabilities** | $230,870,264 | $199,608,355 | $226,307,619 | | **Total Equity** | $356,091,681 | $359,578,572 | $326,888,045 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Operating revenues slightly increased in H1 2024, but operating income, net income, and EPS all declined year-over-year Six-Month Performance Comparison (in thousands of NTD, except EPS) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Operating Revenues** | $111,431,389 | $110,505,855 | | **Gross Profit** | $36,882,654 | $39,476,592 | | **Operating Income** | $25,555,933 | $30,155,441 | | **Net Income** | $24,204,809 | $32,281,220 | | **Basic EPS (NTD)** | $1.95 | $2.58 | | **Diluted EPS (NTD)** | $1.93 | $2.53 | Three-Month Performance Comparison (in thousands of NTD, except EPS) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Operating Revenues** | $56,799,290 | $56,296,408 | | **Operating Income** | $13,891,432 | $15,674,743 | | **Net Income** | $13,775,214 | $15,896,673 | | **Basic EPS (NTD)** | $1.11 | $1.27 | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased to NT$356.1 billion by June 2024, primarily due to NT$37.6 billion in cash dividends, partially offset by net income - Key changes in equity for H1 2024 include **NT$24.2 billion net income**, **NT$37.6 billion cash dividend distribution**, and **NT$9.3 billion other comprehensive income** from foreign operations translation[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to NT$43.5 billion in H1 2024, while investing and financing activities resulted in a net decrease in cash Cash Flow Summary (in thousands of NTD) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $43,547,628 | $40,724,027 | | **Net Cash used in Investing Activities** | $(45,046,127) | $(53,252,770) | | **Net Cash provided by (used in) Financing Activities** | $(12,144,390) | $2,407,942 | | **Net Decrease in Cash** | $(10,889,220) | $(10,721,885) | - Acquisition of property, plant, and equipment was the largest cash outflow at **NT$48.5 billion** for the six-month period[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. History and Organization](index=10&type=section&id=Note%201.%20HISTORY%20AND%20ORGANIZATION) UMC, a Taiwan-incorporated semiconductor wafer foundry since 1980, is listed on both the TWSE and NYSE - UMC is a semiconductor wafer foundry established in **1980**, with dual listings on the **TWSE** and **NYSE**[25](index=25&type=chunk) [6. Contents of Significant Accounts](index=17&type=section&id=Note%206.%20CONTENTS%20OF%20SIGNIFICANT%20ACCOUNTS) This section details significant balance sheet and income statement accounts, including PP&E increases, revenue disaggregation, and equity changes [Property, Plant and Equipment](index=25&type=section&id=6.8%20Property,%20Plant%20and%20Equipment) Net PP&E significantly increased to NT$274.0 billion by June 2024, driven by NT$50.5 billion in additions from capital expenditure PP&E Movement (Assets Used by the Company, in thousands of NTD) | Description | Six Months Ended June 30, 2024 | | :--- | :--- | | **Beginning Balance (Jan 1, 2024)** | $237,376,554 (Net) | | **Additions** | $50,452,113 | | **Disposals** | $(17,522) (Net) | | **Depreciation** | $(20,376,482) | | **Ending Balance (June 30, 2024)** | $272,299,801 (Net) | [Equity](index=42&type=section&id=6.19%20Equity) The company's dividend policy allows 20-100% of distributable earnings as cash dividends, with NT$3.00 per share approved for FY2023 Dividend Distribution | Fiscal Year | Appropriation of Earnings (in thousands NTD) | Cash Dividend per Share (NTD) | | :--- | :--- | :--- | | **2023** | $37,587,102 | $3.00 | | **2022** | $45,017,096 | $3.60 | - The **cash dividend per share for 2023** was adjusted to **NT$3.00011747** due to restricted stock cancellation[116](index=116&type=chunk) [Operating Revenues](index=46&type=section&id=6.21%20Operating%20Revenues) H1 2024 operating revenues slightly increased to NT$111.4 billion, primarily from wafer sales, with Taiwan showing significant growth Revenue by Geography (Six Months Ended June 30, in thousands of NTD) | Region | 2024 | 2023 | | :--- | :--- | :--- | | **Taiwan** | $40,828,087 | $31,509,653 | | **USA** | $27,722,802 | $31,044,831 | | **China (includes Hong Kong)** | $16,861,007 | $14,138,303 | | **Korea** | $12,920,950 | $13,753,012 | | **Europe** | $8,354,862 | $12,532,246 | | **Japan** | $4,741,566 | $7,522,787 | | **Total** | **$111,431,389** | **$110,505,855** | Revenue by Product (Six Months Ended June 30, in thousands of NTD) | Product | 2024 | 2023 | | :--- | :--- | :--- | | **Wafer** | $105,885,331 | $105,070,128 | | **Others** | $5,546,058 | $5,435,727 | | **Total** | **$111,431,389** | **$110,505,855** | [Earnings Per Share](index=58&type=section&id=6.27%20Earnings%20Per%20Share) Basic EPS decreased to NT$1.95 and diluted EPS to NT$1.93 for H1 2024, reflecting lower net income compared to H1 2023 Earnings Per Share (NTD) | EPS Type | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | **Basic** | $1.95 | $2.58 | | **Diluted** | $1.93 | $2.53 | [7. Related Party Transactions](index=60&type=section&id=Note%207.%20RELATED%20PARTY%20TRANSACTIONS) Significant related party transactions include NT$1.44 billion in operating revenues from associates and NT$534 million in FARADAY share acquisitions - Operating revenues from associates reached **NT$1,438 million** in H1 2024, an increase from the prior year[160](index=160&type=chunk) - The company acquired **1,723 thousand shares** of FARADAY TECHNOLOGY CORP. for **NT$534 million** in H1 2024[164](index=164&type=chunk) - Key management personnel compensation for H1 2024 was **NT$879 million**, a decrease from H1 2023[167](index=167&type=chunk) [9. Significant Contingencies and Unrecognized Contract Commitments](index=65&type=section&id=Note%209.%20SIGNIFICANT%20CONTINGENCIES%20AND%20UNRECOGNIZED%20CONTRACT%20COMMITMENTS) The company has NT$20.8 billion in unrecognized construction commitments, and the Micron Technology trade secret case is globally settled - Unrecognized construction contract commitments for operational expansion totaled approximately **NT$20.8 billion** as of June 30, 2024[171](index=171&type=chunk) - The trade secret litigation with Micron Technology is fully resolved, with UMC completing its probation and sentence termination on January 27, 2024[172](index=172&type=chunk) [12. Others (Financial Risk Management)](index=67&type=section&id=Note%2012.%20OTHERS) This section outlines financial risk management, including market, credit, and liquidity risks, with sensitivity analysis and debt-to-capital ratio details - The debt-to-capital ratio increased to **23.47%** by June 30, 2024, up from **15.72%** at year-end 2023[232](index=232&type=chunk) - A **10% NTD appreciation against the USD** would decrease H1 2024 profit by **NT$783 million**[185](index=185&type=chunk) - A **5% change in listed financial asset prices** would impact H1 2024 profit by **NT$261 million**[189](index=189&type=chunk) [14. Operating Segment Information](index=84&type=section&id=Note%2014.%20OPERATING%20SEGMENT%20INFORMATION) The company operates as a single reportable segment, wafer fabrication, with no material accounting policy differences from consolidated statements - UMC operates as a single reportable segment: **wafer fabrication**[237](index=237&type=chunk) [Attachments](index=85&type=section&id=Attachments) [Attachment 11: Investment in Mainland China](index=104&type=section&id=Attachment%2011%20Investment%20in%20Mainland%20China) Accumulated investment in Mainland China reached NT$60.4 billion (USD 1.87 billion) by June 2024, below the MOEA-set upper limit Investment in Mainland China (as of June 30, 2024) | Description | Amount (in thousands of NTD) | | :--- | :--- | | **Accumulated Investment** | $60,415,446 | | **Investment Amount Authorized by MOEA** | $91,227,153 | | **Upper Limit on Investment** | $213,467,627 | - Hejian Technology's Board approved the disposal of its **100% interest in UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD.** on April 2, 2024[279](index=279&type=chunk)

证 券 研 究 报 告 联华电子（UMC）FY2024Q2 业绩点评及法说会纪要 会议时间：2024 年 7 月 31 日 业绩达指引上沿，消费需求驱动业务环比增长 会议地点：线上 事项： 2024 年 7 月 31 日联华电子发布 FY2024Q2 报告（2024 年 4 月 1 日至 2024 年 6 月 30 日），并召开业绩说明会。 评论： 1. 业绩概要：2024Q2 实现营收 567.99 亿新台币(QoQ+3.97%，YoY+0.89%)； 2024Q2 实 现 毛 利 率 35.2%( QoQ+4.3pct ， YoY+17.0pct)) ； 营 业 利 润 率 24.5%( QoQ+3.1pct，YoY+5.4pct)。 2. 分制程占比情况（2024Q1→2024Q2）：14nm 以下为 0%→0%；22/28nm 为 33%→33%；40nm 为 14%→12%；65nm 为 18%→15%；90nm 为 10%→12%； 90nm 以上为 25%→28%。 3. 公司业绩指引：预计 2024 年第三季度晶圆出货量将以低个位数百分比增长; 平均售价（美元计价）将保持坚挺；毛利率约为 30 ...