TAIPEI, Taiwan–(BUSINESS WIRE)–United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2021.
First quarter consolidated revenue was NT$47.10 billion, which increased 4.0% QoQ from NT$45.30 billion in 4Q20. Compared to a year ago, 1Q21 revenue was up 11.4% YoY from NT$42.27 billion in 1Q20. Consolidated gross margin for 1Q21 was 26.5%. Net income attributable to the stockholders of the parent was NT$10.43 billion, with earnings per ordinary share of NT$0.85.
Jason Wang, co-president of UMC, said, “Amid the semiconductor component shortage, we are working with our customers, suppliers and partners to alleviate the capacity tightness across the supply chain. In Q1, robust wafer demand led to full utilization in our manufacturing sites, bringing overall wafer shipments to 2.37 million 8-inch equivalents. For the quarter, our gross profit grew 15.2% QoQ to NT$12.49 billion which partly reflected higher contribution from our 28nm technologies. During the first quarter, we continued to see an increase in 28nm wafer shipments driven by strong wafer demand associated with digital TV, set top box and connectivity chips designed into smartphones. As a result, 28nm revenue grew 18% QoQ, representing 20% of our wafer business. Furthermore, we have started to ship 22nm products to fulfill consumer demand, leading to the recognition of 22nm wafer revenue in 1Q21. We foresee a significant pick up in 22nm product tape outs that will increase our 22/28nm product pipeline, optimize overall product mix and enhance UMC’s foundry share.”
Co-president Wang continued, “Looking into the second quarter, market demand will continue to outpace supply which will lift wafer shipments and blended ASP in USD. Recent market dynamics have provided us and our customers an opportunity to reinforce our capex strategy within our ROI boundary, while trying to alleviate the long term capacity constraint in the supply chain. Therefore, our Board of Directors has approved an investment plan which will expand the capacity at UMC Fab 12A capacity Phase 6 (P6) in Taiwan’s Tainan Science Park through an innovative, win-win partnership model with several leading global customers. The P6 expansion is scheduled for production in the second quarter of 2023, with total investment for the project earmarked at NT$100 billion. In addition to UMC’s previously announced 2021 CAPEX of US$1.5 billion, the bulk of which is allocated towards equipment for the company’s Fab 12A P5 site adjacent to P6, total UMC investment in the Tainan Science Park will reach approximately NT$150 billion over the next three years. The P6 program is supported by a multi-year product alignment between UMC and the involved customers that includes a loading protection mechanism that will ensure the P6 capacity is maintained at a healthy loading level. We look forward to leveraging our No. 1 worldwide foundry market position in multiple areas such as 28nm OLED driver IC production, so we may further strengthen UMC’s semiconductor industry relevance and capture new market opportunities down the road.”
Summary of Operating Results
Operating Results
(Amount: NT$ million)
1Q21
4Q20
QoQ %
change
1Q20
YoY %
change
Operating Revenues
47,097
45,296
4.0
42,268
11.4
Gross Profit
12,494
10,848
15.2
8,122
53.8
Operating Expenses
(5,932)
(6,335)
(6.4)
(5,722)
3.7
Net Other Operating Income and Expenses
1,060
1,102
(3.8)
1,014
4.5
Operating Income
7,622
5,615
35.7
3,414
123.2
Net Non-Operating Income and Expenses
3,361
5,619
(40.2)
(2,592)
–
Net Income Attributable to Stockholders of the Parent
10,428
11,196
(6.9)
2,207
372.5
EPS (NT$ per share)
0.85
0.92
0.19
(US$ per ADS)
0.149
0.161
0.033
Operating revenues in 1Q21 grew 4.0% to NT$47.10 billion. Revenue contribution from 40nm and below technologies remained at to 40%. Gross profit grew 15.2% QoQ to NT$12.49 billion, or 26.5% of revenue. Operating expenses declined 6.4% to NT$5.93 billion. Net other operating income declined to NT$1.06 billion. Net non-operating income was NT$3.36 billion. Net income attributable to stockholders of the parent declined slightly to NT$10.43 billion.
Earnings per ordinary share for the quarter was NT$0.85. Earnings per ADS was US$0.149. The basic weighted average number of outstanding shares in 1Q21 was 12,206,292,756, compared with 12,206,292,756 shares in 4Q20 and 11,782,936,260 shares in 1Q20. The diluted weighted average number of outstanding shares was 12,381,821,873 in 1Q21, compared with 12,359,115,536 shares in 4Q20 and 13,087,825,472 shares in 1Q20. The fully diluted shares counted on March 31, 2021 were approximately 12,397,900,000.
Detailed Financials Section
COGS & Expenses
(Amount: NT$ million)
1Q21
4Q20
QoQ %
change
1Q20
YoY %
change
Operating Revenues
47,097
45,296
4.0
42,268
11.4
COGS
(34,603)
(34,448)
0.4
(34,146)
1.3
Depreciation
(10,412)
(10,436)
(0.2)
(11,124)
(6.4)
Other Mfg. Costs
(24,191)
(24,012)
0.7
(23,022)
5.1
Gross Profit
12,494
10,848
15.2
8,122
53.8
Gross Margin (%)
26.5%
23.9%
19.2%
Operating Expenses
(5,932)
(6,335)
(6.4)
(5,722)
3.7
G&A
(1,806)
(1,966)
(8.2)
(1,543)
17.0
Sales & Marketing
(1,089)
(1,175)
(7.2)
(1,040)
4.8
R&D
(3,049)
(3,194)
(4.5)
(3,185)
(4.3)
Expected Credit Impairment Gain (Loss)
12
5,409.7
46
(73.1)
Net Other Operating Income & Expenses
1,060
1,102
(3.8)
1,014
4.5
Operating Income
7,622
5,615
35.7
3,414
123.2
Operating revenues increased to NT$47.10 billion. COGS remained at NT$34.60 billion, as depreciation and other manufacturing costs remained relatively flat compared to 4Q20. Gross profit increased 15.2% QoQ to NT$12.49 billion, reflecting higher contribution from 28nm wafer shipments. Operating expenses decreased 6.4% QoQ to NT$5.93 billion, as G&A declined 8.2% sequentially to NT$1.81 billion and Sales & Marketing fell 7.2% QoQ to NT$1.09 billion. R&D declined 4.5% sequentially to NT$3.05 billion, representing 6.5% of 1Q21 operating revenues. Net other operating income was NT$1.06 billion. In 1Q21, operating income surged 35.7% QoQ to NT$7.62 billion.
Non-Operating Income and Expenses
(Amount: NT$ million)
1Q21
4Q20
1Q20
Non-Operating Income and Expenses
3,361
5,619
(2,592)
Net Interest Income and Expenses
(272)
(278)
(368)
Net Investment Gain and Loss
3,530
5,703
(1,974)
Exchange Gain and Loss
93
199
(148)
Other Gain and Loss
10
(5)
(102)
Net non-operating income in 1Q21 was NT$3.36 billion, mainly resulting from NT$3.53 billion in net investment gain, as well as a NT$93 million in exchange gain, offset by a NT$272 million in net interest expense.
Cash Flow Summary
(Amount: NT$ million)
For the 3-Month Period Ended
Mar. 31, 2021
For the 3-Month Period Ended
Dec. 31, 2020
Cash Flow from Operating Activities
18,281
16,072
Net income before tax
10,983
11,234
Depreciation & Amortization
11,833
11,993
Share of profit of associates and joint ventures
(1,767)
(3,822)
Income tax paid
(51)
(144)
Changes in working capital & others
(2,717)
(3,189)
Cash Flow from Investing Activities
(7,120)
(17,437)
Acquisition of PP&E
(7,352)
(11,738)
Acquisition of intangible assets
(619)
(293)
Increase in other financial assets
(8)
(4,625)
Others
859
(781)
Cash Flow from Financing Activities
2,580
(3,153)
Bank loans
2,368
(3,000)
Others
212
(153)
Effect of Exchange Rate
(504)
(273)
Net Cash Flow
13,237
(4,791)
Beginning balance
94,048
98,839
Ending balance
107,285
94,048
In 1Q21, cash inflow from operating activities was NT$18.28 billion. Cash outflow from investing activities totaled NT$7.12 billion, which included NT$7.81 billion in capital expenditure, resulting in free cash flow of NT$10.47 billion. Cash inflow from financing activities was NT$2.58 billion, mainly due to NT$2.37 billion in bank loans. Net cash inflow in 1Q21 was NT$13.24 billion. Over the next 12 months, the company expects to repay NT$5.43 billion in bank loans.
Current Assets
(Amount: NT$ billion)
1Q21
4Q20
1Q20
Cash and Cash Equivalents
107.29
94.05
95.17
Notes & Accounts Receivable
29.24
27.27
28.57
Days Sales Outstanding
55
55
59
Inventories, net
22.23
22.55
22.13
Days of Inventory
59
60
59
Total Current Assets
179.08
164.31
159.60
Cash and cash equivalents increased to NT$107.29 billion. Days of inventory decreased by a day to 59 days.
Liabilities
(Amount: NT$ billion)
1Q21
4Q20
1Q20
Total Current Liabilities
78.53
78.24
61.10
Notes & Accounts Payable
8.26
7.86
8.92
Short-Term Credit / Bonds
37.28
38.04
25.35
Payables on Equipment
5.29
5.45
2.78
Other
27.70
26.89
24.05
Long-Term Credit / Bonds
27.70
24.77
47.75
Long-Term Investment Liabilities
20.66
20.75
19.89
Total Liabilities
144.59
141.74
149.64
Debt to Equity
58%
60%
71%
Current liabilities remained at NT$78.53 billion, mainly from NT$37.28 billion in short-term credit/bonds, which was a decrease from NT$38.04 billion in Q4. Long-term credit/bonds increased to NT$27.70 billion. Total liabilities increased slightly to NT$144.59 billion, leading to a debt to equity ratio of 58%.
Analysis of Revenue2
Revenue Breakdown by Region
Region
1Q21
4Q20
3Q20
2Q20
1Q20
North America
23%
29%
30%
31%
29%
Asia Pacific
63%
61%
57%
55%
56%
Europe
8%
5%
6%
5%
6%
Japan
6%
5%
7%
9%
9%
Revenue from Asia Pacific rose to 63% as business from North America declined to 23% of sales. Business from Europe was 8% while contribution from Japan increased to 6%.
Revenue Breakdown by Geometry
Geometry
1Q21
4Q20
3Q20
2Q20
1Q20
14nm and below
0%
0%
0%
0%
0%
14nm