United Microelectronics Corporation (NEW)

Welcome everyone to UMC's 2024 Fourth Quarter Earnings Conference Call. All lights 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 is 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 UMC's conference call for the fourth quarter of 2024. I'm joined by Mr. Jason Wong, 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 results, followed by our President's key message to address UMC's focus and first quarter 2025 guidance. Once our President and CFO complete their remarks, there will be a Q&A session. UMC's quality financial reports are available at our website. www.unc.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 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 presentations material, which is being broadcast live through the internet. Now, I would like to introduce UMC's CFO, Mr. Chi-Dong Liu, to discuss UMC's fourth quarter 2024 financial results.

Thank you, Michael. I'd like to go through the 4Q24 investor conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page 4, the fourth quarter of 2024, consolidated revenue was $60.4 billion, with gross margin at 30.4%. Net income attributable to the stockholder of the parent was $8.5 billion NTD. and earnings per ordinary share were 0.68 NT dollars. Utilization rate in the Q4 was 70 percent, slightly down from the previous quarter of 71 percent. On the quarterly income statement, operating revenue was basically flat, around 60.4 billion NT dollars. And gross margin rate at 30.4%, or $18.3 billion. Due to mark-to-market loss of the investment portfolio for both UMC and UMC Capital, we registered a $1.4 billion loss of non-operating income in Q4-24. The result is the net income attributable to the shareholder of the parent reached $8.49 billion NT or $.68 EPS per share. For the cumulative whole-year 2024 performance, on a year-over-year comparison, revenue increased 4.4% YOY to $232.3 billion. Gross margin rate was around 32.6 percent, or 75.6 billion NT dollars. Operating expenses is under control, around 10.9 percent, similar to the 10.7 percent in 2023. The net income for 2024 was 47.2 billion NT, or 3.8 $20 shares per shares. EPS per ADS is 0.58. On the balance sheet, our cash on hand is over 100 billion NT, and total equity for the company at the end of 2024 reached 378 billion NT dollars. ASP last quarter at Q4 was flat, around flat, quarter over quarter. And let's go down to page nine for revenue breakdown. For Q4 2024, the Asia sales represent about 61%, which declined four percentage points from the previous quarter. When Europe increased from 5%, to 11% in Q4 2024. For the whole year, the Asia part of the revenue increased from 57% in 2023 to 53% in 2024. Europe declined about 3% to 8 percentage points from 11% in the previous year. And U.S., North America didn't really change that much from 27% to 25%. For quarterly, IDM revenue remained flattish from 15 percent to 15 percent. For the full year, it declined from 22 percent in 2023 to 15 percent in 2024. In terms of application breakdown, we see consumer segment decline about 2 percent to 29 percent. and communication also declined about 3% to 39%. And others, including automotive and industrial, in this single quarter, due to customers' order modulation and with our difference, increased from 14% to 19%. On page 14, our full year application breakdown communication is around 42 percent, and consumer is about 28 percent. On page 15, our technology breakdown, our 22 and 28 nanometer shipment continue to increase, and right now represent about 34 percent of the total revenue. And 40 nanometer also see some increase from 13 percent in the previous quarter to 16 percent in this quarter. For the whole year, 28-22 represent about 34 percent of our total revenue, when 14 nanometer remain constant, around 14 percent. Capacity continue to increase, mainly from our 12A 10M P6 operation, and it will somehow decline a little bit because of the Chinese New Year's holiday schedule and also annual maintenance schedule in Q1 of 2025. PayPax budget for 2025 currently stands around 1.8 billion, and the actual PayPax number for 2024 was a bit over 2.8 billion U.S. dollars. The above is a summary of UMC results for Q4 2024. 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. Well, thank you, Qigong.