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UMC Reports Fourth Quarter 2024 Results

Daniel Nenni

Admin
Staff member
Robust 22nm pipeline to fuel growth in 2025, strengthening company's foundry competitiveness

Fourth Quarter 2024 Overview:
Revenue: NT$60.39 billion (US$1.84 billion)
Gross margin: 30.4%; Operating margin: 19.8%
Revenue from 22/28nm: 34%
Capacity utilization rate: 70%
Net income attributable to shareholders of the parent: NT$8.50 billion (US$259 million)
Earnings per share: NT$0.68; earnings per ADS: US$0.104


January 21, 2025 06:03 AM Eastern Standard Time
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 fourth quarter of 2024.

Fourth quarter consolidated revenue was NT$60.39 billion, decreasing 0.2% from NT$60.49 billion in 3Q24. Compared to a year ago, 4Q24 revenue increased 9.9%. Consolidated gross margin for 4Q24 was 30.4%. Net income attributable to the shareholders of the parent was NT$8.50 billion, with earnings per ordinary share of NT$0.68.

Jason Wang, co-president of UMC, said, “Our fourth-quarter results met guidance, with wafer shipments and utilization slightly exceeding expectations. For full year 2024, revenue grew 4.4% year-on-year, reflecting a steady improvement in demand across communication, consumer, and computer segments. Our 22/28nm portfolio remained the largest contributor, with revenue increasing 15% in 2024.

Notably, customers are showing strong interest in migrating to our 22nm specialty platforms for next-generation networking and display driver applications, which offer significant power savings and performance advantages over 28nm solutions. Tape-outs for 22nm products are accelerating and we expect to see higher revenue contribution from 2025 onwards.”

Co-president Wang commented, “Looking into 2025, the semiconductor market is poised for another year of growth, driven by strong demand for AI servers as well as increasing semiconductor content in smartphones, PCs, and other electronic devices. To capture opportunities in this fast-moving market, UMC continues to invest in technology innovation, developing industry-leading specialty solutions to ride the next wave of system upgrades and stay ahead of the competition. Building on our technology foundation, UMC is also actively expanding our advanced packaging offering to help unleash the potential of AI in the coming years. In conjunction with technology development, our key capacity expansion projects are progressing as planned. Our new Singapore Phase 3 fab will enhance customers’ supply chain resilience, while the 12nm collaboration with our U.S. partner will offer customers a migration path beyond 22nm.”

Co-president Wang added, “In the fourth quarter of 2024, we signed a major offshore wind purchase agreement, which is UMC’s largest renewable energy transaction to date. This agreement puts UMC well on track to achieving our goal of 50% renewable energy use by 2030 as part of our roadmap to net zero emissions and 100% renewable energy by 2050. Our commitment to best practices in sustainable development continued to be recognized by key ESG benchmarks. In the 2024 Dow Jones Sustainability Indices (DJSI) results announced in December, UMC is proud to achieve the top ranking in the semiconductor industry, marking UMC’s 17th consecutive year of being recognized as one of the most sustainable companies globally.”

Summary of Operating Results
Fourth quarter operating revenues declined 0.2% sequentially to NT$60.39 billion. Revenue contribution from 40nm and below technologies represented 50% of wafer revenue. Gross profit decreased 10.2% QoQ to NT$18.34 billion, or 30.4% of revenue. Operating expenses increased 2.9% to NT$6.75 billion. Net other operating income increased 57.7% to NT$0.36 billion. Net non-operating expenses totaled NT$1.44 billion. Net income attributable to shareholders of the parent amounted to NT$8.50 billion.

Earnings per ordinary share for the quarter was NT$0.68. Earnings per ADS was US$0.104. The basic weighted average number of shares outstanding in 4Q24 was 12,481,192,676, compared with 12,436,436,695 shares in 3Q24 and 12,414,087,724 shares in 4Q23. The diluted weighted average number of shares outstanding was 12,610,756,874 in 4Q24, compared with 12,559,358,115 shares in 3Q24 and 12,589,138,701 shares in 4Q23. The fully diluted shares counted on December 31, 2024 were approximately 12,614,345,000.

Detailed Financials Section
Operating revenues decreased to NT$60.39 billion. COGS grew 5.0% to NT$42.04 billion, which included 13.3% sequential increase in depreciation. Gross profit decreased 10.2% QoQ to NT$18.34 billion. Operating expenses increased to NT$6.75 billion, as R&D grew 7.8% sequentially to NT$4.33 billion or 7.2% of revenue, while Sales & Marketing decreased 13.0% to NT$0.62 billion and G&A also declined 1.6% QoQ to NT$1.79 billion. Net other operating income was NT$0.36 billion. In 4Q24, operating income declined 15.2% QoQ to NT$11.96 billion.

Net non-operating expenses in 4Q24 was NT$1.44 billion, primarily reflecting the NT$2.61 billion in net investment loss, offset by the NT$0.88 billion in exchange gain, and the NT$0.29 billion in net interest income.

In 4Q24, cash inflow from operating activities was NT$32.98 billion. Cash outflow from investing activities totaled NT$16.97 billion, which included NT$18.93 billion in capital expenditure, resulting in free cash flow of NT$14.04 billion. Cash outflow from financing was NT$14.31 billion, primarily from NT$10.50 billion in bank loans and NT$3.40 billion in redemption of bonds. Net cash flow in 4Q24 amounted to NT$1.59 billion. Over the next 12 months, the company expects to repay NT$5.53 billion in bank loans.

Cash and cash equivalents increased to NT$105.00 billion. Days of inventory decreased 5 days to 80 days.

Brief Summary of Full Year 2024 Consolidated Results
Consolidated revenue in NTD increased 4.4% YoY to NT$232.30 billion, from NT$222.53 billion in 2023.
Gross profit decreased 2.7%, compared to a year ago, representing 32.6% of 2024 revenue.
Operating income decreased 10.8% year-on-year, accounting for 22.2% of 2024 revenue.
Net income attributable to shareholders of the parent decreased 22.6% to NT$47.21 billion in 2024.
EPS was NT$3.80, or EPADS of US$0.580 for 2024.
22/28nm revenue contribution accounted for 34% in 2024.

First Quarter 2025 Outlook & Guidance

Quarter-over-Quarter Guidance:

Wafer Shipments: Will remain flat
ASP in USD: Will decrease by mid-single digit %
Gross Profit Margin: Will be higher than 25% with 0121 earthquake impact
Capacity Utilization: approximately 70%
2025 CAPEX: US$1.8 billion

Recent Developments / Announcements
UMC Ranks Top 10 in the CRIF Asia Top 1000
UMC’s Collaboration with Suppliers to Build a Sustainable Supply Chain Contributes to 2.64 Million Tons of Carbon Reduction
UMC Recognized as a Sustainability Leader in the Dow Jones Sustainability Indices (DJSI) and MSCI ESG Ratings
UMC Signs 30-Year, 30 Billion kWh Offshore Wind Power Agreement with CIP’s Fengmiao I Offshore Wind Farm
UMC’s Flagship Fab Designated One of 189 Smart Manufacturing Lighthouses by the World Economic Forum

A live webcast and replay of the 4Q24 results announcement will be available at www.umc.com under the “Investors / Events” section.

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. For more information, please visit: http://www.umc.com.

 
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I certainly hope so. Nothing from Tower and their Intel Foundry relationship?
"We are pleased to report that we have ramped certain handset products to high volumes in this technology in our Japan factory and now are qualifying our Albuquerque facility to enable further growth. We anticipate beginning production in Albuquerque in 2025. And given the large capacity available, anticipate this to provide strong growth for our power business for years to come."
 
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