United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2021 third 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 that time if you would like to ask a 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 has finished. Please visit our website www.umc.com under the Investor Relations Investors Events section. And now I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, please begin.

Thank you and welcome to the UMC Conference call for the third quarter of 2021. I'm joined by Mr. Jason Wang, the President of UMC, and Mr. Chih-Tung Liu, the CFO of UMC. In a moment, we will hear our CFO present the third quarter financial results, followed by our president's key message to address UMC's focus and the fourth quarter 2021 guidance. Once our president and the CFO complete their remarks, there will be a Q&A session. UMC's quality financial reports are available at our website. www.umc.com under the Investors Financial section. During this conference, we may make forward-looking statements based on 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 risk that may be beyond the company's control. For this risk, please refer to UMC's filing with the SEC in the U.S. and the IOC security authorities. Now, I would like to introduce UMC's CFO, Mr. Chi-Dong Liu, to discuss UMC's third quarter 2021 financial result. Thank you, Michael.

I would like to go through the 3Q21-21 investor conference presentation material, which can be downloaded from our website. Starting on page 3, The third quarter of 2021, consolidated revenue was 55.91 billion NT, with gross margin at 36.8. The net income attributable to the stockholders of the parent was 17.46 billion NT, and the earnings per ordinary shares were 1.43 NT dollars. And utilization rate in the third quarter of 2021 was a little bit over 100%. Please turn to page four. So sequential comparison for the income statement. Revenue grew quarter over quarter by 9.8% to 55.9 billion NT. Gross margin rate reached 36.8%, or 20.5 billion NT. And overall operating income is 15.1 billion NT, or 27.1% operating profit margin rate, grew nearly five basis percentage point. For non-operating income, because of the better performance in the equity market, the overall net non-up is around 4.3 billion NT. significantly growth compared to the 1.8 billion in the previous quarter. And the overall net income attributable to the parent is 17.46 billion or 1.43 EPS. And for US ADRs, the earnings per share per ADS is 0.257. First quarter of the year on page five, revenue grow by 17% to $153.9 billion, mainly based on higher wafer shipment, better loadings, as well as higher blended ASP. Gross margin rate is about 31.8%, or $48.9 billion NT. Operating income rate is 22.1%, or $34 billion NT. The net income for the first three quarters of the year is $39.8 billion, and the net income rate is 25.9%. So accumulated EPS for the first three quarters has reached 3.26 NT per share. So page six is our balance sheet. Our current cash on hand is about $113 billion NT after the cash dividend payout. Total equity is about $257 billion. ASB continues to rise on both price increase as well as mixed improvement. And the previous quarter, the third quarter, ASB increase is nearly 8%. On revenue breakdown starting from page 8, Asia represents about 65% of our total revenue, and Japan, Europe, and U.S. remain relatively the same compared to the previous quarter. IDM is about 14%, and Fabulous is about 86%. Communication is around 46% of the total revenue, and consumer is about 27%. Computer stayed about the same at around 17%. And actually, almost every node is running at nearly full capacity. So the change has been minimal from a quarter over quarter basis. 22 nanometers consist of 19% of the total revenue, and 40 nanometers is about 18%. And we'll continue to see some mile capacity growth coming from both 12X in Xiamen as well as 12N in Japan. And for 8-inch, there's some incremental increase from various especially AN in Suzhou in China. So for the time being, the CAPEX budget for 2021 remains unchanged at 2.3 billion US dollars. And majority, 85%, is going to the capacity of 12-inch related expansion. So the above is a summary of UMC's results for 3Q 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.