Company posts full-year 2023 EPS of NT$4.93; 22/28nm contribution in Q4 reaches 36% 12nm collaboration will propel long-term growth beyond 22/28nm
Fourth Quarter 2023 Overview1:
Fourth quarter consolidated revenue was NT$54.96 billion, decreasing 3.7% QoQ from NT$57.07 billion in 3Q23. Compared to a year ago, 4Q23 revenue declined 19.0% YoY from NT$67.84 billion in 4Q22. Consolidated gross margin for 4Q23 was 32.4%. Net income attributable to the shareholders of the parent was NT$13.20 billion, with earnings per ordinary share of NT$1.06.
Jason Wang, co-president of UMC, said, “In the fourth quarter, challenging macroeconomic conditions continued to prolong the inventory correction in the semiconductor industry as our wafer shipments decreased 2.5% QoQ while overall fab utilization rate slightly fell to 66%. As our Tainan 12A P6 facility continues to ramp, our 22/28nm represented 36% of our Q4 wafer revenue, reflecting record high in revenue as well as percentage of wafer sales.”
“Overall, 2023 was a year where UMC demonstrated its resilience in face of challenging external environment, as optimization in product mix continued to lift 2023 blended ASP by mid-single digit YoY. In addition, we were successful in safeguarding the company's structural profitability with a gross margin of 34.9% in 2023 even as utilization rate significantly declined YoY. Our financial performance also showed strong resilience, which can be attributed to diversified customer base and higher contribution from stronger business stickiness of our specialty technologies offering.”
Co-president Wang commented, “Looking into the first quarter of 2024, we anticipate overall wafer demand will increase mildly, however, customers maintain a cautious approach in their inventory management. Moving forward, UMC will continue to navigate headwinds amid an increasingly competitive landscape and swelling geopolitical tensions via diversified manufacturing base and differentiation in 12-inch specialty technologies. Our 12nm FinFET collaboration is a step forward in advancing our strategy of pursuing cost-efficient capacity expansion and technology node advancement in continuing our commitment to customers. This effort will enable our customers to smoothly migrate to this critical new node, and also benefit from the resiliency of an added Western footprint. We anticipate 12nm FinFET collaboration will broaden our addressable market and significantly accelerate our development roadmap.”
Co-president Wang added, “Over the years, UMC has invested in a number of circular economy initiatives. In 2023, we broke ground for the UMC Circular Economy & Recycling Innovation Center, which will serve to consolidate our efforts to maximize resource recovery and minimize waste. Once operational in 2025, the facility is expected to reduce waste from UMC’s Taiwan fabs by one-third. In addition, UMC continues to be recognized for its unwavering contributions to ESG by global institutions, receiving awards in consecutive years from DJSI, FTSE4Good and ISS. UMC also achieved a remarkable AA rating in the MSCI ESG Ratings. And for the first time, UMC was named as one of the "Best Companies to Work for in Asia" by HR Asia, an authoritative publication for HR professionals. UMC is committed to tackle growing sustainability issues with innovative and long-term solutions that can only be achieved through the hard work and collaboration of its stakeholders and employees.”
Fourth quarter operating revenues declined 3.7% sequentially to NT$54.96 billion. Revenue contribution from 40nm and below technologies represented 50% of wafer revenue, propelled by the revenue growth from 22/28nm in 4Q23. Gross profit decreased 13.0% QoQ to NT$17.81 billion, or 32.4% of revenue. Operating expenses increased 16.0% to NT$6.64 billion. Net other operating income increased to NT$1.25 billion. Net non-operating income totaled NT$2.23 billion. Net income attributable to shareholders of the parent amounted to NT$13.20 billion.
Earnings per ordinary share for the quarter was NT$1.06. Earnings per ADS was US$0.173. The basic weighted average number of shares outstanding in 4Q23 was 12,414,087,724, compared with 12,371,129,866 shares in 3Q23 and 12,348,880,384 shares in 4Q22. The diluted weighted average number of shares outstanding was 12,589,138,701 in 4Q23, compared with 12,566,773,628 shares in 3Q23 and 12,684,106,050 shares in 4Q22. The fully diluted shares counted on December 31, 2023 were approximately 12,589,139,000.
Fourth Quarter 2023 Overview1:
- Revenue: NT$54.96 billion (US$1.79 billion)
- Gross margin: 32.4%; Operating margin: 22.6%
- Revenue from 22/28nm: 36%
- Capacity utilization rate: 66%
- Net income attributable to shareholders of the parent: NT$13.20 billion (US$430 million)
- Earnings per share: NT$1.06; earnings per ADS: US$0.173
Fourth quarter consolidated revenue was NT$54.96 billion, decreasing 3.7% QoQ from NT$57.07 billion in 3Q23. Compared to a year ago, 4Q23 revenue declined 19.0% YoY from NT$67.84 billion in 4Q22. Consolidated gross margin for 4Q23 was 32.4%. Net income attributable to the shareholders of the parent was NT$13.20 billion, with earnings per ordinary share of NT$1.06.
Jason Wang, co-president of UMC, said, “In the fourth quarter, challenging macroeconomic conditions continued to prolong the inventory correction in the semiconductor industry as our wafer shipments decreased 2.5% QoQ while overall fab utilization rate slightly fell to 66%. As our Tainan 12A P6 facility continues to ramp, our 22/28nm represented 36% of our Q4 wafer revenue, reflecting record high in revenue as well as percentage of wafer sales.”
“Overall, 2023 was a year where UMC demonstrated its resilience in face of challenging external environment, as optimization in product mix continued to lift 2023 blended ASP by mid-single digit YoY. In addition, we were successful in safeguarding the company's structural profitability with a gross margin of 34.9% in 2023 even as utilization rate significantly declined YoY. Our financial performance also showed strong resilience, which can be attributed to diversified customer base and higher contribution from stronger business stickiness of our specialty technologies offering.”
Co-president Wang commented, “Looking into the first quarter of 2024, we anticipate overall wafer demand will increase mildly, however, customers maintain a cautious approach in their inventory management. Moving forward, UMC will continue to navigate headwinds amid an increasingly competitive landscape and swelling geopolitical tensions via diversified manufacturing base and differentiation in 12-inch specialty technologies. Our 12nm FinFET collaboration is a step forward in advancing our strategy of pursuing cost-efficient capacity expansion and technology node advancement in continuing our commitment to customers. This effort will enable our customers to smoothly migrate to this critical new node, and also benefit from the resiliency of an added Western footprint. We anticipate 12nm FinFET collaboration will broaden our addressable market and significantly accelerate our development roadmap.”
Co-president Wang added, “Over the years, UMC has invested in a number of circular economy initiatives. In 2023, we broke ground for the UMC Circular Economy & Recycling Innovation Center, which will serve to consolidate our efforts to maximize resource recovery and minimize waste. Once operational in 2025, the facility is expected to reduce waste from UMC’s Taiwan fabs by one-third. In addition, UMC continues to be recognized for its unwavering contributions to ESG by global institutions, receiving awards in consecutive years from DJSI, FTSE4Good and ISS. UMC also achieved a remarkable AA rating in the MSCI ESG Ratings. And for the first time, UMC was named as one of the "Best Companies to Work for in Asia" by HR Asia, an authoritative publication for HR professionals. UMC is committed to tackle growing sustainability issues with innovative and long-term solutions that can only be achieved through the hard work and collaboration of its stakeholders and employees.”
Fourth quarter operating revenues declined 3.7% sequentially to NT$54.96 billion. Revenue contribution from 40nm and below technologies represented 50% of wafer revenue, propelled by the revenue growth from 22/28nm in 4Q23. Gross profit decreased 13.0% QoQ to NT$17.81 billion, or 32.4% of revenue. Operating expenses increased 16.0% to NT$6.64 billion. Net other operating income increased to NT$1.25 billion. Net non-operating income totaled NT$2.23 billion. Net income attributable to shareholders of the parent amounted to NT$13.20 billion.
Earnings per ordinary share for the quarter was NT$1.06. Earnings per ADS was US$0.173. The basic weighted average number of shares outstanding in 4Q23 was 12,414,087,724, compared with 12,371,129,866 shares in 3Q23 and 12,348,880,384 shares in 4Q22. The diluted weighted average number of shares outstanding was 12,589,138,701 in 4Q23, compared with 12,566,773,628 shares in 3Q23 and 12,684,106,050 shares in 4Q22. The fully diluted shares counted on December 31, 2023 were approximately 12,589,139,000.
UMC Reports Fourth Quarter 2023 Results
United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its cons
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