United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2023 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 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 has finished. Please visit our website www.umc.com under the Investor Relations Investors Event section. And now I would like to introduce Mr. Michael Ling, Head of Investor Relations at UMC. Mr. Ling, please begin.

Thank you and welcome to UMC's conference call for the third quarter of 2023. I am joined by Mr. Jason Wong, President of UMC. and Mr. Chidong Liu, CFO of UMC. In a moment, we will hear our CFO present the third quarter financial result, followed by our President's key message to address UMC's focus on fourth quarter 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 investor's 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 in maturity, including the risk that may be beyond the company's control. For a more detailed description of this risk 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 material, which is being broadcast live through the internet. Now, I would like to introduce UMC's CFO, Mr. Chi-Dong Liu. to discuss UNC's third quarter 2023 financial result.

Thank you, Michael. I'd like to go through the third quarter 2023 investor conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page four, the third quarter of 2023, consolidated revenue was $57.1 billion NT, with gross margin at 35.9%. Net income attributable to the shareholder of the parent was $16 billion NT dollars. And the earnings per ordinary shares were $1.29 NT dollars, which is slightly better than the previous quarter of 1.27. And our shipment in the third quarter declined sequentially about 2 percent. And capacity utilization rate in the third quarter was 67 percent. H5 is the income statement for the third quarter. And revenue grow 1.4% sequentially to 57 billion NT due to better mix and also better blended ASP as well as helped by the favorable exchange rate. Gross margin remains somewhat similar to the previous quarter. at 35.9 percent, or $20.4 billion. Operating income reached about $15.96 billion, which is equivalent to 1.29 EPS in the third quarter of 2023. On page six is the first nine-month performance Because of the downturn of the cycle, we witnessed around 20.5% year-over-year decline in our top line, which was $167.5 billion. Gross margin rate dropped from 45.8% in the previous year to the first three-quarters of the year of 2023 of 35.8%. And EPS, for the first three quarters of the year, reached $3.87 per share. On page seven, the cash on hand is still around 140 billion NT, with the total asset is more than 547 billion NT. On page eight, Our blended ASP, as I mentioned earlier, due to the better mix and also the difference in between 12-inch and 8-inch wafer capacity utilization rate, our blended ASP in the third quarter continued to edge up in the third quarter of 2023. For revenue breakdown on page 9, Asia remained the biggest segment of the pie, around 58%. which grow about two percentage points from the previous quarter. And Europe and North America remain unchanged when Japan declined by about two percentage points in terms of revenue breakdown. IDM versus F-Fabulous on page 10 remain unchanged quarter over quarter. On page 11, we see a small increase in communication which is 46 percent in the third quarter. And consumer dropped from 26 percent in the second quarter to 23 percent in the third quarter of 2023. On page 12, along with our increased capacity coming out of P6 in 22 and 28 nanometers, our revenue also grew accordingly, now reached 32 percent in the third quarter of 2023. For total revenue for 49-meter and below in the third quarter reached 45 percent, which compared to 41 percent in the previous quarter. For capacity breakdown on a quarterly basis on page 13, as P6 continued to have new capacity come on stream, we see about more than 1 percent capacity increase in the third quarter. And the following quarter, in Q4, we expect to see more than 2 percent sequential capacity growth, also mainly due to the capacity increase in our Thailand P6 facility. Last page of my presentation is on Foundry CapEx, which currently running on track. And its budget remains unchanged, around $3 billion for year 2023. So the above is the summary of UMC results for third quarter of 2023. 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.