United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2021 fourth 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 the question. And for your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within two hours after the conference is finished. Please visit our website www.umc.com under the investor relations investors events section. 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 fourth quarter of 2021. I'm joined by Mr. Jason Wang, the president of UMC. and Mr. Chi-Dung Du, the CFO of UMC. In a moment, we will hear our CFO present the fourth quarter financial result, followed by our President's key message to address UMC's focus and the first quarter 2022 guidance. Once our President and the CFO complete their remarks, there will be a Q&A session. UMC's quarterly financial reports are available at our website, www.umc.com. under the Investors' Financial Success 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 Azure Resolve 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 ROC security authorities. Now, I would like to introduce UMC's CFO, Mr. Chi-Dong Liu, to discuss UMC's fourth quarter 2021 financial results.

Thank you, Michael. I would like to go through the 4Q21 investor conference presentation material, which can be downloaded from our website. Starting on page 3, the fourth quarter of 2021, conserved revenue was $59.1 billion, $90 billion. with a gross margin at 39.1%. The net income attributable to the stockholder of the parent was $15.95 billion, and earnings for ordinary shares were $1.370. Capacity utilization rate remained at 100% plus. Please turn to page 4 on this Q4 comprehensive income statement. Operating revenue grew sequentially 5.7% to 59.1 billion. Gross margin as we reported at 39.1% improved 12.5% to 23.1 billion. We controlled the operating expenses and the percentage of the revenue declined a little bit to 11.5% to 6.82 billion. With a non-operating income of $558, our net income attributable to shareholder of the parent was $15.949 billion, or an EPS of 1.3 in Q4. For the whole year on the page 5, 2021 revenue grew by 20.5% year over year. in NT dollar terms to 213 billion NT. In U.S. dollar terms, the growth rate was higher, around 26-27%, given the stronger NT dollar appreciation against U.S. dollars. Worst profit margin was 33.8%, or $72 billion, in the year of 2021. And the overall net non-operating income is a little bit over $10 billion, grow by 70% year over year, mainly due to the stronger stock market performance and most of the financial assets we hold are evaluated according to the stock market performance. Income tax expenses also grow significantly to $6.7 billion. mainly due to a lower base in 2020 and also longer profitability in 2021. So for the full year, the EPS is 4.57, grew up by 91.1% in net income terms. So on page six, cash continued to pile up to $132.6 billion. by the end of 2021. And total equity also grew to 281.2 billion NT by the end of 2021. Page seven, the ASP trend continued to inch up. In the Q4 of last year, we saw ASP grow by more than 3%. In terms of revenue breakdown, for page eight, Asia still remains our largest portion of revenue contribution with 66% in Q4, and North America is 21%. For the full year on page 9, the ratio didn't change much compared to the quarterly numbers. So for page 10, both quotes are identical that IDM contribute around 14% of the total revenue. And for the full year, we see a 3% percentage point increase for IDM revenue to 15% in 2021 versus 12% in 2020. So on page 12, communication also remained around 46% of the pie. And for the full year, on page 13, we see computer segment grow by 3 percentage point to 17%. And consumer also grows 3 percentage point to 27%, compared to the year of 2020. And for Q4 of 21, by technology breakdown on page 14, for 22, 28 nanometer, account for about 20% of our total revenue, with 38% of the revenue coming from 49 or below in Q4. And for the full year on page 15, we see a pretty meaningful increase in 2022-2028 revenue from 14% in the previous year to 20% in 2021, which also helped our blended On page 16, continue to see some mild capacity expansion. Although Q1, there will be some maintenance, annual maintenance. So most of the increase is scattered among different FABs, which shows in this table on page 16. For page 17, so far, currently our 2022 CAPEX is budgeted around $3 billion. And for year 2021, the actual spending was about $1.8 billion. And the above is a summary of UMC's results for Q4 2021. More details are available in the report, which has been posted on our website. I would now turn the call over to President of UMC, Mr. Jason Wong.