United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2022 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 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 is finished. Please visit our website www.umc.com under the Investor Relations Investor Events session. I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, you may begin.

Thank you and welcome to UMC Conference Call for the fourth quarter of 2022. I am joined by Mr. Jason Wong, the President of UMC, and Mr. Chi Dong Liu, 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 on first quarter of 2023 guidance. Once our President and 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 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 a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and the ROC security authorities. During this conference, you may view our financial presentation materials, which is being broadcast live through the internet. Now, I would like to introduce UMC's CFO, Mr. Chitundu, to discuss UMC's fourth quarter 2022 financial result.

Thank you, and Happy New Year to everyone. Thank you for joining our call. I would like to go through the 4Q22 Investor Conference presentation material, which can be downloaded or viewed. in real time from our website. Starting on page four, the fourth quarter of 2022, consolidated revenue was $67.84 billion, with gross margin rate at 42.9%. Net income attributable to the stockholder of the parent was $19 billion, and earnings per ordinary shares were $1.54 NT dollars. Utilization rate came down to 90% in 4Q from 100% in the previous quarter. And on page 5, this is the quarterly result. Revenue declined by 10% sequentially to $67.8 billion. Gross margin rate was 42.9% or 29.1 billion NT. We kept the operating expenses at nearly the same level quarter over quarter, which is around 6.79 billion. And total operating income declined by roughly 20% to 23.6 billion. And net income attributable to the shareholder of the parent is $19 billion, or 1.54 EPS, in the full Q of 22. Our next page is the full year result of 2022. Total revenue grew by 31% to $278.7 billion. And operating income it's more than doubled to $104 billion. And the growth rate was 101% year over year. And EPS grew to 7.09 in 2022 compared to 4.57 in the previous years. So on page seven, our cash on hand, currently stands at $173.8 billion, $20. With our total equity now is over $10 billion U.S. dollar mark to $335.4 billion, $20. And ASB on page eight. in Q4 continued to edge up slightly in the fourth quarter of 2022. On page nine, for revenue breakdown, the change was the most significant in the North American market, which represent about 30% of our total revenue compared to 23% in the previous quarter. Asia probably showed the biggest decline, from 62% of revenue to 54%. On page 10, that's the four-year breakdown, and the change is less significant compared to the quarterly result. Asia represents 61% of the total pie, and U.S., compare, represent about 24 percent in the full year of 2022. On page 11, the quarterly breakdown of IDM versus FABLIS stand at 19 percent IDM and 81 percent FABLIS. For full year on the next page, it remain almost unchanged, with IDM represent about 15 percent for the full year revenue. For page 13, communication computer and consumer didn't change much on quarterly sequential comparison, with communication still remained the biggest of 45% of the total revenue. Other segments, which include auto, has continued to grow at a faster pace compared to the rest of the segment. It's now 18% of our total revenue. For the full year, communication remained around 45% when consumer is about 26%. On page 15, the quarterly technologies breakdown. Now we can see 22, 28 nanometer represent 28% of the biggest pie of the chart for the Q4 revenue. 40 nanometer is about 17%. The legacy 8-inch or 0.25 and above declined the most in the 4Q22. For the full year, 22, 28 nanometer represent about 24%, also the biggest pie of the chart for the full year of 2022. On page 17, the quarterly capacity breakdown, we have some annual maintenance in Taiwan and also China for Q1 23. So there's some minor decline in available capacity, which will gradually back to normal in Q2 of 2023. And there will be also some new capacity come on stream in the third quarter for our P5 and P6 in Thailand. So, next page is our current full-year cash-based budget for CAPEX. Right now it's about $3 billion, with 90 percent of the $3 billion contribute to around all the 12-inch related expansion. So, the above is the summary of UMC's results for Q4 2022. 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.