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UMC Reports Third Quarter 2012 Results

3Q results in line with guidance; Revenue from leading edge 40nm and specialty technologies continues to grow

TAIPEI, Taiwan, Oct. 31, 2012 /PRNewswire/ --

Third Quarter 2012 Overview[1]:

  • Revenue: increased 3.3% QoQ to NT$28.53 billion (US$973.22 million)
  • Gross margin: 24%; operating margin: 12.7%
  • Capacity utilization: 84%
  • Net income: NT$2.42 billion (US$82.46 million)
  • Earnings per share: NT$0.19; earnings per ADS: US$0.032

United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC" or "The Company"), a leading global semiconductor foundry, today announced its unconsolidated operating results for the third quarter of 2012.

Revenue was NT$28.53 billion, a 3.3% quarter-over-quarter increase from NT$27.62 billion in 2Q12, and a 13.3% year-over-year increase from NT$25.19 billion in 3Q11.  Gross margin was 24%, operating margin was 12.7%, net income was NT$2.42 billion, and earnings per ordinary share were NT$ 0.19.

Dr. Shih-Wei Sun, CEO of UMC, said, "In 3Q 2012, both UMC's revenue and operating profit continued to grow.  Wafer shipments reached 1.13 million 8-inch equivalent wafers, with overall capacity utilization at 84%.  Increased 40nm revenue contribution led to higher average selling price, which contributed to 3Q revenue growth.  With the share of 40nm sales growing from 9% to 13% quarter-over-quarter due to solid 40nm chip demand, we anticipate our 15% year-end internal revenue target from 40nm to be achieved ahead of schedule.  In addition to 40nm, we are providing our customers with the most competitive and innovative embedded flash specialty technologies for the rising touch-sensor chipset market.  This platform has been successfully adopted by numerous industry leading customers with many products currently in mass production.  We are optimistic that these specialty technologies will inject UMC with new growth momentum in the coming future."

Dr. Sun continued, "28nm progress is within our expectation, with yield enhancement of design-in products continuing to improve.  For first-wave 28nm product matching business, we are seeing evident yield progression for ported ICs after adjusting our process and device parameters during recent months.  UMC also successfully taped out a mobile communication product in 3Q using our 28nm high-k/-metal-gate (gate-last) process.  We are subsequently collaborating closely with customers for their 28nm mobile communication & computing, wired & wireless connectivity, DTV, data storage controller, and programmable logic products.  Meanwhile, based on our IBM FinFET licensing, UMC has decided to aggressively develop 14nm FinFET technology on 20nm metal.  14nm FinFET will deliver the most optimal low-power and high-performance solution to offset the cost impact from using double patterning lithography."           

Dr. Sun added, "Foundry is prone to both inventory correction and industry cycles.  We expect the present inventory adjustment to continue into early next year.  The momentum of the demand recovery in 2013 will be determined by macroeconomic conditions, end demand strength and the transition progress for new products entering the market.  In the meantime, UMC will continue to enhance its customer composition and product mix, and further exercise flexible capacity deployment to accommodate evolving production requirements.  UMC is also strengthening its tailored cooperation with leading-edge and specialty technology customers for specific products and applications to provide a full-range of 'Customer-Driven Foundry Solutions.'"     

Summary of Operating Results

Operating Results

(Amount: NT$ million)

3Q12

2Q12

QoQ %
change

3Q11

YoY %
change

Revenue

28,525

27,620

3.3

25,187

13.3

Gross Profit

6,850

6,740

1.6

4,984

37.4

Operating Expenses

(3,238)

(3,558)

(9.0)

(3,449)

(6.1)

Operating Income

3,612

3,182

13.5

1,535

135.3

Non-Operating Income

83

261

(68.2)

445

(81.3)

Net Income

2,417

2,990

(19.2)

1,954

23.7

EPS   (NT$ per share)

0.19

0.24


0.16


         (US$ per ADS[2])

0.032

0.041


0.027


Revenue increased 3.3% QoQ from NT$27.62 billion in 2Q12 to NT$28.53 billion in 3Q12, and increased 13.3% YoY from NT$25.19 billion in 3Q11.  Gross profit was NT$6.85 billion, or 24.0% of revenue, compared to NT$6.74 billion, or 24.4% of 2Q12 revenue.  Operating income for the quarter was NT$3.61 billion, or 12.7% of revenue, compared to NT$3.18 billion, or 11.5% of 2Q12 revenue.  Net income in 3Q12 was NT$2.42 billion, compared to NT$2.99 billion in 2Q12.

Earnings per ordinary share for the quarter were NT$0.19.  Earnings per ADS were US$0.032.  The basic weighted average number of outstanding shares in 3Q12 was 12,628,658,938, compared with 12,621,506,549 shares in 2Q12 and 12,606,278,572 shares in 3Q11.  The diluted weighted average number of outstanding shares was 13,309,367,195 in 3Q12, compared with 13,469,988,568 shares in 2Q12 and 13,378,728,208 shares in 3Q11.  The fully diluted share count on September 30, 2012 was approximately 14,077,180,000.  On September 30, 2012, UMC held 300 million treasury shares acquired from the 14th share buy-back programs.

Detailed Financials Section

Revenue increased 3.3% QoQ to NT$28.53 billion from NT$27.62 billion in 2Q12, mainly due to increased average selling price from rising 40nm revenue contribution.  Depreciation within COGS increased slightly due to new capacity added to Fab 12A.  General and Administration expenses decreased to NT$515 million, mainly due to the drop of employee bonus accrual adjustment.  R&D expense declined as a result of lowered mask usage due to several advanced technology programs having already started in 2Q12.  The total R&D expense was 7.8% of revenue in 3Q12.

COGS & Expenses

(Amount: NT$ million)

3Q12

2Q12

QoQ %
change

3Q11

YoY %
change

Revenue

28,525

27,620

3.3

25,187

13.3

COGS

(21,675)

(20,880)

3.8

(20,203)

7.3

  Depreciation

(7,122)

(6,932)

2.7

(6,622)

7.6

  Other Mfg. Costs

(14,553)

(13,948)

4.3

(13,581)

7.2

Gross Profit

6,850

6,740

1.6

4,984

37.4

Gross Margin (%)

24.0%

24.4%


19.8%


Total Operating Exp.

(3,238)

(3,558)

(9.0)

(3,449)

(6.1)

  G&A

(515)

(626)

(17.7)

(630)

(18.3)

  Sales & Marketing

(504)

(492)

2.4

(535)

(5.8)

  R&D

(2,219)

(2,440)

(9.1)

(2,284)

(2.8)

Operating Income

3,612

3,182

13.5

1,535

135.3

Net non-operating income during 3Q12 decreased QoQ to NT$83 million.  Net investment loss can be attributed to investment loss accounted for under equity method, mainly losses from UMC Japan and Nexpower.  Gain on disposal of investment was NT$1.54 billion, including NT$1.47 billion from Novatek and NT$70 million from King Yuan Electronics.  Increase to other loss was mainly from the loss on valuation of financial liabilities.

Non-Operating Income (Expenses)

(Amount: NT$ million)

3Q12

2Q12

3Q11

Net Non-Operating Income

83

261

445

Net Interest Income (Loss)

(37)

(8)

1

Net Investment Loss

(1,068)

(429)

(473)

Gain (Loss) on Disposal of Investment

1,544

83

(22)

Exchange Gain (Loss)

(0)

427

169

Other Gain (Loss)

(356)

188

770

Operating cash inflow was NT$10.18 billion. Free cash flow for 3Q12 was negative NT$1.51 billion, as CAPEX spending for the quarter was NT$11.69 billion.  The NT$5.25 billion of financing cash outflow was mainly from the payment of cash dividends of NT$6.32 billion. Net cash outflow was NT$4.52 billion in 3Q12.

Cash Flow Summary

(Amount: NT$ million)

For the 3-Month

Period Ended

Sep. 30, 2012

For the 3-Month

 Period Ended

 Jun. 30, 2012

Cash Flow from Operations

10,184

10,254

  Net Income

2,417

2,990

  Depreciation & Amortization

8,605

8,084

  Changes in Working Capital

(1,920)

(999)

  Other

1,082

179

Cash Flow from Investing

(9,138)

(15,865)

  Capital Expenditures

(11,692)

(17,324)

Liquid of Investment

674

2,376

  Other

1,880

(917)

Cash Flow from Financing

(5,247)

10,404

  Bank Loans

904

404

Bonds Issued

(4)

9,991

Cash Dividends

(6,316)

-

  Other

169

9

Effect of Exchange Rate

(314)

171

Net Cash Flow

(4,515)

4,964

Due to the cash dividend payment and CAPEX spending, cash and cash equivalents decreased to NT$32.05 billion in 3Q12.  The one-day increase in average inventory turnover reflected an inventory build to accommodate higher 40nm and 28nm customer demand.

Current Assets

(Amount: NT$ billion)

3Q12

2Q12

3Q11

Cash & Cash Equivalents

32.05

36.57

33.47

Notes & Accounts Receivable

15.90

16.19

13.99

  Days Sales Outstanding

51

47

53

Inventories

11.36

10.63

11.35

  Avg. Inventory Turnover

47

46

52

Total Current Assets

68.31

71.06

66.80

Total liabilities decreased to NT$35.07 billion in 3Q12, mainly due to the cash dividend payment of NT$6.32 billion to stockholders.  Consequently, UMC's debt to equity ratio decreased to 33%.

Liabilities

(Amount: NT$ billion)

3Q12

2Q12

3Q11

Total Current Liabilities

35.07

41.65

28.16

  Accounts Payable

5.25

5.25

4.94

  Short-Term Credit / Bonds

9.30

9.15

7.35

Cash Dividends Payable

-

6.32

-

  Payable on Equipment

8.76

8.09

4.72

  Other

11.76

12.84

11.15

Long-Term Liabilities

28.37

27.71

15.28

Total Liabilities

67.02

72.91

46.96

Debt to Equity

33%

35%

22%

Analysis of Revenue[3]

The percentage of revenue from North America increased to 50%, reflecting the relative strength of North America-based computer and consumer customers.  

Revenue Breakdown by Region

Region

3Q12

2Q12

1Q12

4Q11

3Q11

North America

50%

45%

45%

47%

48%

Asia Pacific

40%

46%

46%

43%

40%

Europe

9%

8%

8%

9%

11%

Japan

1%

1%

1%

1%

1%

Revenue contribution from 40nm and below grew from 9% in 2Q12 to 13% in 3Q12, reflecting strong customer demand for this leading edge node.  We anticipate the 15% year-end internal revenue target from 40nm to be achieved ahead of schedule.

Revenue Breakdown by Geometry

Geometry

3Q12

2Q12

1Q12

4Q11

3Q11

40nm and below

13%

9%

9%

8%

6%

40nm<x<=65nm

41%

40%

40%

41%

34%

65nm<x<=90nm

7%

7%

6%

6%

8%

90nm<x<=0.13um

15%

18%

20%

23%

24%

0.13um<x<=0.18um

9%

10%

10%

10%

13%

0.18um<x<=0.35um

11%

11%

11%

9%

11%

0.5um and above

4%

5%

4%

3%

4%

The percentage of revenue from Fabless customers increased slightly from 82% to 83% in 3Q12.

Revenue Breakdown by Customer Type

Customer Type

3Q12

2Q12

1Q12

4Q11

3Q11

Fabless

83%

82%

80%

79%

76%

IDM

17%

18%

20%

21%

24%

Computer and consumer demand in 3Q12 both showed greater QoQ strength, including flash controller, DTV/STB, and SDDI.

Revenue Breakdown by Application (1)

Application

3Q12

2Q12

1Q12

4Q11

3Q11

Computer

21%

17%

21%

14%

17%

Communication

49%

54%

49%

60%

53%

Consumer

27%

26%

27%

23%

27%

Memory

1%

1%

1%

1%

1%

Others

2%

2%

2%

2%

2%

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc. Memory consists of DRAM, SRAM, Flash, ROM, and EEPROM.

Blended Average Selling Price Trend

The slight increase in blended average selling price (ASP) during 3Q12 was mainly from better product mix due to higher 40nm revenue contribution.

(To view ASP trend, visit http://www.umc.com/english/investors/3Q12_ASP_trend.asp)

Shipment and Utilization Rate[4]

Wafer shipments decreased 0.7% sequentially to 1,133K in 3Q12, compared to  1,142K 8-inch equivalent wafers in 2Q12.  Due to both wafer shipment and total capacity being at similar levels, overall utilization rate for the quarter remained flat from 2Q12 at 84%.

Wafer Shipments


3Q12

2Q12

1Q12

4Q11

3Q11

Wafer Shipments
(8" K equivalents)

1,133

1,142

963

915

1,025


Quarterly Capacity Utilization Rate


3Q12

2Q12

1Q12

4Q11

3Q11

Utilization Rate

84%

84%

71%

68%

74%

Total Capacity
(8" K equivalents)

1,376

1,372

1,364

1,376

1,358

Capacity[5]

Capacity during the third quarter was 1,376K 8-inch equivalent wafers.  The estimated capacity for the fourth quarter will increase to 1,401K 8-inch equivalent wafers as advanced capacity expansion continues at Fab12A in Tainan.

Annual Capacity in
thousands of wafers


Quarterly Capacity in
thousands of wafers

FAB

Geometry
(um)

2012E

2011

2010

2009


FAB

4Q12E

3Q12

2Q12

1Q12

Fab6A

6"

3.5 – 0.45

481

538

588

583


Fab6A

113

123

123

122

Fab8A

8"

0.5 – 0.25

815

813

816

816


Fab8A

204

204

204

203

Fab8C

8"

0.35 – 0.11

360

359

366

405


Fab8C

90

90

90

90

Fab8D

8"

0.13 – 0.09

371

364

314

267


Fab8D

93

93

93

92

Fab8E

8"

0.5 – 0.18

449

469

410

408


Fab8E

113

113

113

112

Fab8F

8"

0.18 – 0.11

389

388

388

381


Fab8F

98

98

98

97

Fab8S

8"

0.18 – 0.11

348

307

304

300


Fab8S

87

87

87

87

Fab12A

12"

0.18 – 0.040

579

501

374

385


Fab12A

156

143

141

140

Fab12i

12"

0.13 – 0.065

537

530

454

362


Fab12i

134

134

134

134

Total (1)

5,514

5,322

4,791

4,586


Total

1,401

1,376

1,372

1,364

YoY Growth Rate

4%

11%

4%

2%






(1) One 6-inch wafer is converted into 0.5625(6 square/8 square) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12 square/8 square) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX

The capital expenditure budget remains unchanged at US$2 billion. By the end of the third quarter, UMC's year-to-date CAPEX spending totaled US$1.3 billion.

UMC Capital Expenditure by Year - in US$ billion

Year

2011

2010

2009

2008

2007

CAPEX

$ 1.6

$ 1.8

$ 0.55

$ 0.35

$ 0.9


2012 CAPEX Plan


8"

12"

Total

UMC

2%

98%

Approximately

US$2 billion


Fourth Quarter of 2012 Outlook & Guidance

Quarter-over-Quarter Guidance:

  • Wafer shipment: To decrease by approximately 7-9%
  • Wafer ASP in US$: To increase by approximately 2%
  • Gross Margin: To be in high teen percentage points
  • Capacity utilization: Mid to high 70% range
  • Segments: Communication segment will outpace consumer and computer segments 

Recent Developments / Announcements

Oct. 19, 2012

UMC Qualifies Foundry's First True 12V eFlash Solution

Sep. 21, 2012

Allegro And UMC Establish Foundry Partnership

Sep. 14, 2012

UMC Selected As A DJSI Global Component For Fifth Consecutive Year

Sep. 6, 2012

UMC To Develop 65nm BSI CMOS Image Sensor Process With STMicroelectronics

July. 30, 2012

UMC Obtains LEED Gold Certification For Fab 12A P3 & P4

July. 25, 2012

UMC 2Q 2012 Financial Results

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

Conference Call / Webcast Announcement

Wednesday, October 31, 2012

Time:

8:00 PM (Taipei) / 8:00 AM (New York) / 12:00 Noon (London)

Dial-in numbers and Access Codes:

USA Toll Free:

1866 519 4004

UK Toll Free:

0808 234 6646

Singapore and Other Areas:

+65 6723 9381

Access Code:

UMC

A live webcast and replay of the 3Q12 results announcement will be available at www.umc.com under the "Investor Relations \ Investor Events" section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced technology and manufacturing for applications spanning every major sector of the IC industry. UMC's customer-driven foundry solutions allow chip designers to leverage the company's leading-edge processes, which include 28nm poly-SiON and gate-last High-K/Metal Gate technology, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore-based Fab 12i. Fab 12A consists of Phases 1-4 which are in production for customer products down to 28nm. Construction is underway for Phases 5&6, with future plans for Phases 7&8. The company employs over 13,000 people worldwide and has offices in Taiwan, Japan, Singapore, Europe, and the United States. UMC can be found on the web at http://www.umc.com.

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward looking within the meaning of the U.S.  Federal Securities laws, including statements about future outsourcing, wafer capacity, technologies, business relationships and market conditions.  Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks.  Further information concerning these risks is included in UMC's filings with the U.S. SEC, including on Form F-1, F-3, F-6 and 20-F, each as amended.

Safe Harbor Statements

This release contains forward-looking statements.  These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995.  You can identify these forward-looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning.  You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements.  Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international global business activities; (iv) our dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates.  Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3, F-6 and 20-F, in each case as amended. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are unaudited and unconsolidated, and prepared and published in accordance with ROC GAAP.  Investors are cautioned that there are many differences between ROC GAAP and US GAAP.

This presentation is not an offer of securities for sale in the United States.  Securities may not be offered or sold in the United States absent registration or an exemption from registration.  Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

Note:

[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 un-audited, unconsolidated, and represent comparisons among the three-month period ending Sep 30, 2012, the three-month period ending Jun 30, 2012, and the equivalent three-month period that ended Sep 30, 2011.  For all 3Q12 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Sep 30, 2012 exchange rate of NT$29.31 per U.S. Dollar.

[2] One ADS represents five Taiwan-listed ordinary shares.

[3] Revenue in this section represents wafer sales.

[4] Utilization Rate = Quarterly Wafer Out / 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.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION

Condensed Unconsolidated Balance Sheet

As of  September  30, 2012

 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


















September  30, 2012




US$


NT$


%



ASSETS








Current Assets








 Cash and Cash Equivalents

1,093


32,050


11.7%



 Financial Assets at Fair Value through Profit or Loss, current

25


727


0.3%



 Available-for-Sale Financial Assets, current

209


6,140


2.2%



 Notes & Accounts Receivable, net

542


15,896


5.8%



 Inventories, net

388


11,361


4.2%



 Other Current Assets

74


2,139


0.8%



    Total Current Assets

2,331


68,313


25.0%











Non-Current Assets








 Funds and Investments

1,762


51,646


18.9%



 Property, Plant and Equipment, net

5,002


146,606


53.7%



 Other Assets

217


6,357


2.4%



    Total Non-Current Assets

6,981


204,609


75.0%



TOTAL ASSETS

9,312


272,922


100.0%











LIABILITIES








Current Liabilities








 Short-term Loans

80


2,349


0.9%



 Financial Liabilities at Fair Value through Profit or Loss, current

39


1,145


0.4%



 Payables

823


24,118


8.8%



 Current Portion of Long-term Liabilities

237


6,956


2.5%



 Other Current Liabilities

18


506


0.3%



    Total Current Liabilities

1,197


35,074


12.9%











Non-Current Liabilities








 Bonds Payable

752


22,046


8.1%



 Long-term Loans

216


6,328


2.3%



 Other Liabilities

122


3,568


1.3%



    Total Non-Current Liabilities

1,090


31,942


11.7%



TOTAL LIABILITIES

2,287


67,016


24.6%











STOCKHOLDERS' EQUITY








Capital Stock

4,419


129,515


47.5%



Additional Paid-in Capital

1,603


46,990


17.2%



Retained Earnings, Unrealized Gain or Loss on Financial
     Instruments and Cumulative Translation Adjustment 

1,172


34,364


12.5%



Treasury Stock

(169)


(4,963)


(1.8%)



TOTAL STOCKHOLDERS' EQUITY

7,025


205,906


75.4%



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

9,312


272,922


100.0%



















NoteNew Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2012 exchange rate of NT
           $
29.31 per U.S. Dollar.

           All figures are in ROC GAAP.









  UNITED MICROELECTRONICS CORPORATION

Condensed Unconsolidated Income Statement

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

Except Per Share and Per ADS Data




Year over Year Comparison


Quarter over Quarter Comparison


Three-Month Period Ended




Three-Month Period Ended




September 30, 2012


September 30, 2011


%


September 30, 2012


June 30, 2012


%


US$


NT$


US$


NT$


Chg.


US$


NT$


US$


NT$


Chg.

Net Sales

973


28,525


859


25,187


13.3%


973


28,525


942


27,620


3.3%

Cost of Goods Sold

(739)


(21,675)


(689)


(20,203)


7.3%


(739)


(21,675)


(712)


(20,880)


3.8%

Net Gross Profit

234


6,850


170


4,984


37.4%


234


6,850


230


6,740


1.6%


24.0%


24.0%


19.8%


19.8%




24.0%


24.0%


24.4%


24.4%



Operating Expenses




















  - Sales & Marketing

(17)


(504)


(18)


(535)


(5.8%)


(17)


(504)


(17)


(492)


2.4%

  - General & Administrative

(18)


(515)


(21)


(630)


(18.3%)


(18)


(515)


(21)


(626)


(17.7%)

  - Research & Development

(76)


(2,219)


(79)


(2,284)


(2.8%)


(76)


(2,219)


(83)


(2,440)


(9.1%)


(111)


(3,238)


(118)


(3,449)


(6.1%)


(111)


(3,238)


(121)


(3,558)


(9.0%)

Operating Income

123


3,612


52


1,535


100.0%


123


3,612


109


3,182


13.5%


12.7%


12.7%


6.1%


6.1%




12.7%


12.7%


11.5%


11.5%























Net Non-Operating Income (Expenses)

3


83


16


445


(81.3%)


3


83


8


261


(68.2%)

Income from Continuing Operations before
   Income Tax

126


3,695


68


1,980


86.6%


126


3,695


117


3,443


7.3%


13.0%


13.0%


7.9%


7.9%




13.0%


13.0%


12.5%


12.5%























Income Tax Expense

(44)


(1,278)


(1)


(26)


100.0%


(44)


(1,278)


(15)


(453)


100.0%

Net Income

82


2,417


67


1,954


23.7%


82


2,417


102


2,990


(19.2%)


8.5%


8.5%


7.8%


7.8%




8.5%


8.5%


10.8%


10.8%























Earnings per Share

0.006


0.19


0.005


0.16




0.006


0.19


0.008


0.24



Earnings per ADS (2)

0.032


0.95


0.027


0.80




0.032


0.95


0.041


1.20



Weighted Average Number of Shares




















Outstanding (in millions)



12,629




12,606






12,629




12,622











































Notes:




















(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2012 exchange rate of NT $29.31 per U.S. Dollar.







     All figures are in ROC GAAP.

(2) 1 ADS equals 5 common shares.

 UNITED MICROELECTRONICS CORPORATION

Condensed Unconsolidated Income Statement

Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

Except Per Share and Per ADS Data














For the Three-Month Period Ended


For the Nine-Month Period Ended


September 30, 2012


September 30, 2012


US$


NT$


%


US$


 NT$ 


%

Net Sales

973


28,525


100.0%


2,726


79,910


100.0%

Cost of Goods Sold

(739)


(21,675)


(76.0%)


(2,107)


(61,770)


(77.3%)

Net Gross Profit

234


6,850


24.0%


619


18,140


22.7%

























Operating Expenses












  - Sales & Marketing

(17)


(504)


(1.8%)


(51)


(1,505)


(1.9%)

  - General & Administrative

(18)


(515)


(1.8%)


(58)


(1,693)


(2.1%)

  - Research & Development

(76)


(2,219)


(7.7%)


(233)


(6,824)


(8.5%)


(111)


(3,238)


(11.3%)


(342)


(10,022)


(12.5%)

Operating Income 

123


3,612


12.7%


277


8,118


10.2%













Net Non-Operating Income (Expenses)

3


83


0.3%


17


513


0.6%

Income from Continuing Operations before
    Income Tax

126


3,695


13.0%


294


8,631


10.8%

























Income Tax Expense

(44)


(1,278)


(4.5%)


(64)


(1,889)


(2.4%)

Net Income 

82


2,417


8.5%


230


6,742


8.4%













Earnings per Share

0.006


0.19




0.018


0.53



Earnings per ADS (2)

0.032


0.95




0.090


2.65















Weighted Average Number of Shares
     Outstanding (in millions)



12,629






12,621















Notes:












(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2012 exchange rate of NT $29.31 per U.S. Dollar.

     All figures are in ROC GAAP.









(2) 1 ADS equals 5 common shares.









  UNITED MICROELECTRONICS CORPORATION

Condensed Unconsolidated Statement of Cash Flows

For The Nine-Month Period Ended September 30, 2012

 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)







USD


NTD


Cash flows from operating activities :





    Net Income

230


6,742


    Depreciation & Amortization

838


24,555


    Gain on recovery in bad debt

(0)


(0)


    Gain on recovery in market value and obsolescence of inventories 

(2)


(55)


    Cash dividends received under the equity method

2


57


    Investment lossaccounted for under the equity method

87


2,556


    Loss on valuation of financial assets and liabilities

13


386


    Impairment loss

1


25


    Gain on disposal of investments

(68)


(1,989)


    Gain on disposal of property, plant and equipment

(1)


(24)


    Exchange gain on financial assets and liabilities

(4)


(127)


    Exchange gain on long-term liabilities

(6)


(184)


    Amortization of bond discounts 

9


258


    Amortization of deferred income

(2)


(59)


    Stock-based payment

6


185


    Exchange gain on capital reduction of long-term investments accounted for under the
         equity method

(8)


(233)


    Changes in assets, liabilities and others

(74)


(2,156)


Net cash provided by operating activities

1,021


29,937







Cash flows from investing activities :





    Proceeds from disposal of available-for-sales financial assets

92


2,711


    Proceeds from disposal of financial assets measured at cost

0


0


    Acquisition of long-term investments accounted for under the equity method

(1)


(16)


    Proceeds from capital reduction and liquidation of investments 

104


3,049


    Acquisition of property, plant and equipment

(1,320)


(38,675)


    Acquisition of intangible assets

(26)


(749)


    Proceeds from disposal of property, plant and equipment 

1


25


    Increase in deferred charges

(19)


(553)


    Increase in other assets - others

(3)


(133)


Net cash used in investing activities

(1,172)


(34,341)







Cash flows from financing activities :





    Decrease in short-term loans

(72)


(2,098)


    Proceeds from long-term loans

188


5,500


    Repayments of long-term loans

(44)


(1,288)


    Proceeds from bonds issued

341


10,000


    Bonds issue cost

(0)


(13)


    Cash Dividends

(216)


(6,316)


    Exercise of employee stock options

9


260


    Proceeds from disposal of treasury stock

0


4


    Increase in deposits-in

1


28


Net cash providedby financing activities

207


6,077







Effect of exchange rate changes on cash and cash equivalents                                                                   

(15)


(452)


Net increase in cash and cash equivalents

41


1,221







Cash and cash equivalents at beginning of period

1,052


30,829







Cash and cash equivalents at end of period

1,093


32,050












Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2012 exchange rate of NT $29.31 per U.S.
         Dollar.

         All figures are in ROC GAAP.





Contacts:

Bowen Huang
UMC, Investor Relations
+ 886-2-2658-9168, ext. 16957
bowen_huang@umc.com

SOURCE United Microelectronics Corporation

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