United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2021 first quarter earnings conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at the time if you would like to ask the question. For your information, this conference call is now being broadcast live over the Internet. Webcast replay will be available within an hour after the conference is finished. Please visit our website, www.umc.edu. under the Investor Relations, Investors, Events section. And now I would like to introduce Mr. Michael Ling, Head of Investor Relations at UMC. And Mr. Ling, please begin.

Thank you and welcome to the UMC's conference call for the first quarter of 2021. I am joined by Mr. Jason Wong, the President of UMC, and Mr. Shidong Liu, the CFO of UMC. In a moment, We will hear our CFO present the first quarter financial results, followed by our President's key message to address UMC's focus and the second quarter 2021 guidance. Once our President and the CFO complete their remarks, there will be a Q&A section. UMC's quarterly financial reports are available at our website, www.umc.com, under the Investors' Financials section. During this conference, we may make forward-looking statements based on the management's current expectations and beliefs. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including the risks that may be beyond the company's control. For these risks, please refer to UMC's filing with the SEC in the U.S. and the ROC Security Authority. Now, I would like to introduce UMC's CFO, Mr. Chidong Liu, to discuss UMC's first quarter 2021 financial results.

Thank you, Michael. I would like to go through the first quarter of 2021 investor conference presentation material, which can be downloaded from our website. Starting on page 3, the first quarter of 2021, consulting revenue was $47.1 billion NT, with gross margin at 26.5%. The net income attributable to the stockholder of the parent was 10.43 billion NT, and the earnings per ordinary shares were 85% NT dollars. In the first quarter, the capacity utilization rate was 100%. Further improvement from 99% in the previous quarter. And please go to page four. For sequential comparison, Q1 revenue, $47.1 billion, represents about 4% quarter-over growth, which contributed both from ASP increase of 3% plus, as well as wafer shipment, which is also 3% plus. And it was somewhat offset by the stronger NT dollars. Gross profit margin continued to grow to 26.5%, or 12.5%. And operating income margin rate in first quarter was 16.2%, increased by 35.7% sequentially. So the net income as reported was around 0.85 NT per eight years. It's about 0.149 US dollars. Year over year comparison on page five, revenue grew up by 11.4% despite the much stronger NT dollar exchange rate. Gross margin improved by nearly 7% percentage point to 26.5 compared to 19.2 the same period of last year. And operating margin improved to 16.2% from 8.1% in first quarter of 2020. So EPS will show a pretty significant growth from 0.19 in Q1 2020 to 0.85 to this quarter, this past quarter. On page six, our cash is around $107 billion NT dollars. And total Equity is about close to $2.5 billion. Like I mentioned earlier, the QI revenue growth contributing both from AAP growth as well as wafer shipment growth. And on page seven, you can see there's more than 3% uptake in our blended AAP for first quarter of 2021. In terms of revenue breakdown on page 8, Asia continued to grow, and right now it represents about 63% of our total revenue. And Europe and Japan also show mild growth in first quarter of 21. For page 9, IDM view on change around 14%, and on page 10, We see some more balance distribution among three major segments. So consumer now represent about 27% and communication is about 46%. And for page 11, 28 or slash 22 nanometer technology represent about 20%. of our total pipe in Q1 2021. And 40 nanometer represent another 20% for Q1 2021. On page 12 of our capacity breakdown for quarter two, we will see some 4% quarter over quarter capacity growth, mainly coming from 12 inch capacity expansion at both 12A as well as 12X in Xiamen. And on page 13, we revised up our annual CAPEX budget, mainly due to a new project in Tainan, which we will go into details later. And for the new updated CAPEX for 21, it's now 2.3 billion US dollars. So the above is a summary of UMC results for Q1 2021. More details are available in the report, which has been posted on our website. I will now turn the call over to President of UMC, Mr. Jason Wong.