UMC’s Q3 2024 Financial Results: Record Growth in 22/28nm Shipments and Strong Profit Margins
Key Highlights for Q3 2024:
- Revenue: NT$60.49 billion (US$1.91 billion), a 6.5% sequential increase and 6.0% year-over-year growth.
- Gross Margin: 33.8%; Operating Margin: 23.3%.
- 22/28nm Revenue Contribution: 35% of total revenue.
- Capacity Utilization Rate: 71%.
- Net Income for Shareholders: NT$14.47 billion (US$457 million), a sequential 5.0% increase.
- Earnings per Share: NT$1.16 (US$0.183 per ADS).
UMC (United Microelectronics Corporation), a major global semiconductor foundry, reported robust Q3 results, bolstered by record 22/28nm product shipments driven by increased demand. The company achieved a 6.5% increase in revenue from Q2, reaching NT$60.49 billion, and saw its net income rise to NT$14.47 billion, translating to earnings per share of NT$1.16.
Co-President’s Remarks:
Jason Wang, UMC’s Co-President, noted that Q3 results aligned with company forecasts, with wafer shipments surpassing expectations. He highlighted that revenue from the company’s specialty technology portfolio reached a historic high, contributing 53.1% to total sales. Wang emphasized UMC’s ongoing investment in advanced technology, underscoring the release of their 22nm display driver solution, which is the first of its kind in the market.
Looking forward, Wang noted stable demand and inventory normalization in Q4, with significant new technology projects underway. UMC’s expanded facility in Singapore and its ongoing collaboration with Intel are expected to enhance customer support and industry positioning.
Sustainability and Renewable Energy Initiatives:
UMC released its 2023 Sustainability Report, revealing a doubling of renewable energy use from the previous year, now comprising 11.1% of total energy consumption. With a recent renewable energy agreement, UMC aims to achieve 25% renewable energy by 2025 and 50% by 2030.
Financial Overview:
- Gross Profit: NT$20.43 billion, a 2.2% increase from Q2.
- Operating Expenses: NT$6.56 billion, with R&D accounting for 6.6% of revenue.
- Free Cash Flow: Outflow of NT$4.95 billion after NT$22.30 billion in capital expenditures.
- Cash Position: Ended Q3 with NT$103.41 billion, while inventory days decreased to 85.
Revenue Distribution and Customer Insights:
Revenue from the Asia-Pacific region rose to 65% of total sales, with North America contributing 26%. Business from Europe declined to 5%. The communication segment led application revenue, making up 42%, while the consumer segment accounted for 31%.
Production and Capacity Trends:
UMC’s Q3 wafer shipments increased 7.8% quarter-over-quarter, with a capacity utilization rate of 71%. The company anticipates a slight capacity increase for Q4, continuing to align production capacity with rising demand in 22/28nm technology.
About UMC
UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry company. The company provides high-quality IC fabrication services, focusing on logic and various specialty technologies to serve all major sectors of the electronics industry. UMC’s comprehensive IC processing technologies and manufacturing solutions include Logic/Mixed-Signal, embedded High-Voltage, embedded Non-Volatile-Memory, RFSOI, BCD etc. Most of UMC’s 12-in and 8-in fabs with its core R&D are in Taiwan, with additional ones throughout Asia. UMC has a total of 12 fabs in production with a combined capacity of more than 400,000 wafers per month (12-in equivalent), and all of them are certified with IATF 16949 automotive quality standards. UMC is headquartered in Hsinchu, Taiwan, plus local offices in the United States, Europe, China, Japan, Korea, and Singapore, with a worldwide total of 20,000 employees.
