Gross margin reached 35.2% as operating income increased 19.1% QoQ
Earnings per share in 1H was NT$1.95
Second Quarter 2024 Overview1:
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 second quarter of 2024.
Second quarter consolidated revenue was NT$56.80 billion, increasing 4.0% from NT$54.63 billion in 1Q24. Compared to a year ago, 2Q24 revenue increased 0.9%. Consolidated gross margin for 2Q24 was 35.2%. Net income attributable to the shareholders of the parent was NT$13.79 billion, with earnings per ordinary share of NT$1.11.
Jason Wang, co-president of UMC, said, “In the second quarter, wafer shipments increased 2.6% QoQ and fab utilization rate improved to 68% as we saw notable demand momentum in the consumer segment. Contribution from our 22/28nm business rose sequentially on healthy demand for WiFi and digital TV applications. Together with a favorable exchange rate and improved product mix, second-quarter gross margin was better than what was previously guided. During the quarter, we announced technology updates including a 3D IC solution to stack RFSOI wafers, which is the first of its kind in the industry, and a 22nm embedded high voltage platform, currently the most advanced display driver foundry solution in the market. They reflect UMC’s commitment to building on our leadership across a number of specialty technologies that are crucial for the development of AI, 5G, and automotive.”
Co-president Wang commented, “Looking to the third quarter, we expect to see end market dynamics improve further, particularly in the communication and computing segments, which will drive higher fab utilization. Our 22/28nm business remains a promising growth driver, with a number of tape-outs taking place in the second half for applications including display drivers, connectivity and networking. At the same time, we do expect to face some margin pressure going into the second half due to a pickup in depreciation expense related to capacity expansions as well as higher utility rates. Despite these cost challenges, we believe we will continue to demonstrate our resilience as we did during the recent market downturn, and deliver on our strategy of providing differentiated technology solutions and a diversified manufacturing footprint to help our customers to strengthen their supply chain management.”
Co-president Wang added, “In pursuit of our net-zero by 2050 goal, UMC continues to take concrete steps to drive emissions reduction in our operations and supply chain, and to increase our use of renewable energy. We are on track to achieving our progressive 2025 and 2030 targets. More details on our ESG progress will be made available to stakeholders in our upcoming Sustainability Report.”
Second quarter operating revenues increased 4.0% sequentially to NT$56.80 billion. Revenue contribution from 40nm and below technologies represented 45% of wafer revenue. Gross profit grew 18.2% QoQ to NT$19.98 billion, or 35.2% of revenue. Operating expenses increased 9.8% to NT$6.31 billion. Net other operating income decreased to NT$0.22 billion. Net non-operating income reached NT$2.53 billion. Net income attributable to shareholders of the parent amounted to NT$13.79 billion.
Earnings per ordinary share for the quarter was NT$1.11. Earnings per ADS was US$0.171. The basic weighted average number of shares outstanding in 2Q24 was 12,414,189,313, compared with 12,414,087,724 shares in 1Q24 and 12,348,986,144 shares in 2Q23. The diluted weighted average number of shares outstanding was 12,529,942,186 in 2Q24, compared with 12,577,525,057 shares in 1Q24 and 12,526,182,161 shares in 2Q23. The fully diluted shares counted on June 30, 2024 were approximately 12,530,243,000.
Detailed Financials Section
Operating revenues increased to NT$56.80 billion. COGS declined 2.4% to NT$36.82 billion. Gross profit grew 18.2% QoQ to NT$19.98 billion. Operating expenses increased to NT$6.31 billion, as R&D grew 13.1% to NT$3.85 billion or 6.8% of revenue, while G&A also increased 6.0% to NT$1.80 billion. Net other operating income was NT$0.22 billion. In 2Q24, operating income increased 19.1% QoQ to NT$13.89 billion.
Net non-operating income in 2Q24 was NT$2.53 billion, primarily due to the NT$1.44 billion in net investment gain, the NT$0.70 billion in net interest income and the NT$0.41 billion in exchange gain.
In 2Q24, cash inflow from operating activities was NT$22.73 billion. Cash outflow from investing activities totaled NT$15.13 billion, which included NT$20.83 billion in capital expenditure, resulting in free cash inflow of NT$1.90 billion. Cash outflow from financing was NT$5.71 billion, primarily from NT$3.00 billion in redemption of bonds and NT$2.50 billion in bank loans. Net cash flow in 2Q24 amounted to NT$2.23 billion. Over the next 12 months, the company expects to repay NT$4.32 billion in bank loans.
Third Quarter 2024 Outlook & Guidance
Quarter-over-Quarter Guidance:
Earnings per share in 1H was NT$1.95
Second Quarter 2024 Overview1:
- Revenue: NT$56.80 billion (US$1.75 billion)
- Gross margin: 35.2%; Operating margin: 24.5%
- Revenue from 22/28nm: 33%
- Capacity utilization rate: 68%
- Net income attributable to shareholders of the parent: NT$13.79 billion (US$425 million)
- Earnings per share: NT$1.11; earnings per ADS: US$0.171
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 second quarter of 2024.
Second quarter consolidated revenue was NT$56.80 billion, increasing 4.0% from NT$54.63 billion in 1Q24. Compared to a year ago, 2Q24 revenue increased 0.9%. Consolidated gross margin for 2Q24 was 35.2%. Net income attributable to the shareholders of the parent was NT$13.79 billion, with earnings per ordinary share of NT$1.11.
Jason Wang, co-president of UMC, said, “In the second quarter, wafer shipments increased 2.6% QoQ and fab utilization rate improved to 68% as we saw notable demand momentum in the consumer segment. Contribution from our 22/28nm business rose sequentially on healthy demand for WiFi and digital TV applications. Together with a favorable exchange rate and improved product mix, second-quarter gross margin was better than what was previously guided. During the quarter, we announced technology updates including a 3D IC solution to stack RFSOI wafers, which is the first of its kind in the industry, and a 22nm embedded high voltage platform, currently the most advanced display driver foundry solution in the market. They reflect UMC’s commitment to building on our leadership across a number of specialty technologies that are crucial for the development of AI, 5G, and automotive.”
Co-president Wang commented, “Looking to the third quarter, we expect to see end market dynamics improve further, particularly in the communication and computing segments, which will drive higher fab utilization. Our 22/28nm business remains a promising growth driver, with a number of tape-outs taking place in the second half for applications including display drivers, connectivity and networking. At the same time, we do expect to face some margin pressure going into the second half due to a pickup in depreciation expense related to capacity expansions as well as higher utility rates. Despite these cost challenges, we believe we will continue to demonstrate our resilience as we did during the recent market downturn, and deliver on our strategy of providing differentiated technology solutions and a diversified manufacturing footprint to help our customers to strengthen their supply chain management.”
Co-president Wang added, “In pursuit of our net-zero by 2050 goal, UMC continues to take concrete steps to drive emissions reduction in our operations and supply chain, and to increase our use of renewable energy. We are on track to achieving our progressive 2025 and 2030 targets. More details on our ESG progress will be made available to stakeholders in our upcoming Sustainability Report.”
Second quarter operating revenues increased 4.0% sequentially to NT$56.80 billion. Revenue contribution from 40nm and below technologies represented 45% of wafer revenue. Gross profit grew 18.2% QoQ to NT$19.98 billion, or 35.2% of revenue. Operating expenses increased 9.8% to NT$6.31 billion. Net other operating income decreased to NT$0.22 billion. Net non-operating income reached NT$2.53 billion. Net income attributable to shareholders of the parent amounted to NT$13.79 billion.
Earnings per ordinary share for the quarter was NT$1.11. Earnings per ADS was US$0.171. The basic weighted average number of shares outstanding in 2Q24 was 12,414,189,313, compared with 12,414,087,724 shares in 1Q24 and 12,348,986,144 shares in 2Q23. The diluted weighted average number of shares outstanding was 12,529,942,186 in 2Q24, compared with 12,577,525,057 shares in 1Q24 and 12,526,182,161 shares in 2Q23. The fully diluted shares counted on June 30, 2024 were approximately 12,530,243,000.
Detailed Financials Section
Operating revenues increased to NT$56.80 billion. COGS declined 2.4% to NT$36.82 billion. Gross profit grew 18.2% QoQ to NT$19.98 billion. Operating expenses increased to NT$6.31 billion, as R&D grew 13.1% to NT$3.85 billion or 6.8% of revenue, while G&A also increased 6.0% to NT$1.80 billion. Net other operating income was NT$0.22 billion. In 2Q24, operating income increased 19.1% QoQ to NT$13.89 billion.
Net non-operating income in 2Q24 was NT$2.53 billion, primarily due to the NT$1.44 billion in net investment gain, the NT$0.70 billion in net interest income and the NT$0.41 billion in exchange gain.
In 2Q24, cash inflow from operating activities was NT$22.73 billion. Cash outflow from investing activities totaled NT$15.13 billion, which included NT$20.83 billion in capital expenditure, resulting in free cash inflow of NT$1.90 billion. Cash outflow from financing was NT$5.71 billion, primarily from NT$3.00 billion in redemption of bonds and NT$2.50 billion in bank loans. Net cash flow in 2Q24 amounted to NT$2.23 billion. Over the next 12 months, the company expects to repay NT$4.32 billion in bank loans.
Third Quarter 2024 Outlook & Guidance
Quarter-over-Quarter Guidance:
- Wafer Shipments: Will increase by mid-single digit %
- ASP in USD: Will remain firm
- Gross Profit Margin: Will be in the mid-30% range
- Capacity Utilization: approximately 70%
- 2024 CAPEX: US$3.3 billion
UMC Reports Second Quarter 2024 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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