UMC Reports Third Quarter 2014 Results

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.

[2] Revenue in this section represents wafer sales

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) remained flat in 3Q14.
(To view ASP trend, visit http://www.umc.com/english/investors/3Q14_ASP_trend.asp)

Shipment and Utilization Rate[3] for Foundry Segment

Wafer shipments increased 2.5% quarterly to 1,462K in 3Q14, bringing overall utilization rate to 93%.

Wafer Shipments
	3Q14	2Q14	1Q14	4Q13	3Q13
Wafer Shipments	1,462	1,426	1,258	1,236	1,329
(8" K equivalents)

Quarterly Capacity Utilization Rate
	3Q14	2Q14	1Q14	4Q13	3Q13
Utilization Rate	93%	90%	81%	79%	87%
Total Capacity	1,586	1,597	1,563	1,560	1,548
(8" K equivalents)

[3] Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Capacity[4] for Foundry Segment

Capacity during the third quarter was 1,586K 8-inch equivalent wafers. The difference of 11K 8-inch equivalent wafers during 3Q14 compared to 2Q14 was primarily due to the change in capacity profile at Fab8D and the capacity upgrades at Fab12i. Fourth quarter¡¦s estimated capacity will be approximately 1,577K 8-inch equivalent wafer, the net result of 28nm capacity expansion at Fab12A with current capacity upgrades at Fab12i.

Annual Capacity in *thousands of wafers*							Quarterly Capacity in *thousands of wafers*
FAB		Geometry (um)	2013	2012	2011	2010	FAB	4Q14E	3Q14	2Q14	1Q14
Fab6A	6"	3.5 - 0.45	448	481	538	588	Fab6A	113	113	113	111
Fab8A	8"	0.5 - 0.25	813	815	813	816	Fab8A	204	204	204	201
Fab8C	8"	0.35 - 0.11	347	360	359	366	Fab8C	87	87	87	86
Fab8D	8"	0.13 - 0.09	382	371	364	314	Fab8D	86	86	93	94
Fab8E	8"	0.5 - 0.18	418	449	469	410	Fab8E	105	105	105	103
Fab8F	8"	0.18 - 0.11	388	389	388	388	Fab8F	98	98	98	96
Fab8S	8"	0.18 - 0.11	335	348	307	304	Fab8S	84	84	84	83
Fab8N	8"	0.5 -0.13	469	-	-	-	Fab8N	140	140	140	126
Fab12A	12"	0.18 - 0.028	651	579	501	374	Fab12A	180	174	174	171
Fab12i	12"	0.13 - 0.040	550	537	530	454	Fab12i	135	145	147	145
Total ⁽¹⁾			6,107	5,514	5,322	4,791	Total	1,577	1,586	1,597	1,563
YoY Growth Rate			11%	4%	11%	4%

2010~2012 figures account for UMC parent company only.

⁽¹⁾ One 6-inch wafer is converted into 0.5625(6 ² /8 ² ) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12 ² /8 ² ) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

The foundry capital expenditure for 2014 will be US$1.3 billion . Spending during the first nine months of 2014 in the foundry segment was US$885 million .

Capital Expenditure by Year- in US$ billion
Year	2013	2012	2011	2010	2009
CAPEX	$1.10	$1.70	$1.60	$1.80	$0.55

2009~2012 figures account for UMC parent company only.

2014 CAPEX Plan
8"	12"	Total
12%	88%	US$ 1.3 billion

[4] Estimated capacity numbers are based on calculated maximum output rather than designed capacity . The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

Fourth Quarter of 2014 Outlook & Guidance

Quarter-over-Quarter Guidance:

Foundry Segment Wafer Shipment: To decrease by approximately 3%
Foundry Segment ASP in US$: To increase by approximately 1%
Foundry Segment Profitability: Gross margin will be in the mid-20 percentage range
Foundry Segment Capacity Utilization: Approximately 90%
Expect to recognize approximately US$50mn from Fujitsu for 40nm licensing fee
Guidance to New Business Segment: Revenue to be approximately NT$2.5bn and net loss attributable to UMC parent company to be approximately NT$400mn

Recent Developments / Announcements

Oct. 28, 2014	UMC Enters Volume Production for Lantiq's Communication ICs
Oct. 09, 2014	UMC Board Resolves to Enter a Joint Venture Agreement for a 12" Fab in China
Sep. 16, 2014	UMC Selected as a DJSI Global Component for Seventh Consecutive Year
Sep. 03, 2014	NJR Analog ICs Manufactured at UMC Adopted by Major Japanese Auto OEM
Aug. 29, 2014	UMC Joins Fujitsu's New Foundry Company
Aug. 08, 2014	UMC Again Earns Top 10 Ranking for Corporate Citizenship by Taiwan's CommonWealth Magazine
Aug. 06, 2014	NJR and UMC Extends Collaboration to MEMS Microphone Manufacturing
Jul. 30, 2014	UMC 2Q 2014 Financial Results

Please visit UMC's website for further details regarding the above announcements

Conference Call / Webcast Announcement

Wednesday, October 29, 2014

Time: 5:00 PM ( Taipei ) / 5:00 AM ( New York ) / 09:00 AM ( London )

Dial-in numbers and Access Codes:

USA Toll Free:	1-800 871-3110, 1-888 700-7397
Taiwan Number:	02-2192-8016
Other Areas:	+886-2-2192-8016

Access Code:	UMC

A live webcast and replay of the 3Q14 results announcement will be available at http://www.umc.com under the "Investors / Events" section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced technology and manufacturing for applications spanning every major sector of the IC industry. UMC¡¦s robust foundry solutions allow chip designers to leverage the company¡¦s leading-edge processes, which include 28nm poly-SiON and gate-last High-K/Metal Gate technology, mixed signal/RFCMOS, and a wide range of specialty technologies. Production is supported through 10 wafer manufacturing facilities that include two advanced 300mm fabs; Fab 12A in Taiwan and Singapore -based Fab 12i. Fab 12A consists of Phases 1-4 which are in production for customer products down to 28nm. Construction has been completed for Phases 5&6, with future plans for Phases 7&8. The company employs over 15,000 people worldwide and has offices in Taiwan , mainland China , Europe , Japan , Korea, Singapore , and the United States . UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward looking within the meaning of the U.S. Federal Securities laws, including statements about future outsourcing, wafer capacity, technologies, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC¡¦s filings with the U.S. Securities and Exchange Commission, including its registration statements and reports on Forms F-1, F-3, F-6 and 20-F and 6-K, in each case as amended. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) our dependence upon the frequent introduction of new services and technologies based on the latest developments in our industry; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international global business activities; (iv) our dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its registration statements and reports on Form F-1, F-3, F-6 and 20-F and 6-K, in each case as amended. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from ROC GAAP and US GAAP.

This presentation is not an offer of securities for sale in the United States . Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of September 30, 2014
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


	September 30, 2014
	US$	NT$	%
Assets
Current assets
Cash and cash equivalents	1,406	42,744	14.2%
Financial assets at fair value through profit or loss, current	21	649	0.2%
Available-for-sale financial assets, current	72	2,190	0.7%
Notes & Accounts receivable, net	721	21,932	7.3%
Inventories, net	471	14,310	4.8%
Other current assets	328	9,977	3.3%
Total current assets	3,019	91,802	30.5%

Non-current assets
Funds and investments	1,093	33,236	11.0%
Property, plant and equipment	5,343	162,474	54.0%
Other non-current assets	437	13,310	4.5%
Total non-current assets	6,873	209,020	69.5%
Total assets	9,892	300,822	100.0%

Liabilities
Current liabilities
Short-term loans	233	7,075	2.4%
Financial liabilities at fair value through profit or loss, current	0	8	0.0%
Payables	963	29,271	9.7%
Current portion of long-term liabilities	269	8,188	2.7%
Other current liabilities	29	902	0.3%
Total current liabilities	1,494	45,444	15.1%

Non-current liabilities
Bonds payable	821	24,977	8.3%
Long-term loans	231	7,008	2.4%
Other non-current liabilities	230	7,001	2.3%
Total non-current liabilities	1,282	38,986	13.0%
Total liabilities	2,776	84,430	28.1%

Equity
Equity attributable to the parent company
Capital	4,184	127,248	42.3%
Additional paid-in capital	1,296	39,418	13.1%
Retained earnings, unrealized gain or loss on available-for-sale financial assets and exchange differences on translation of foreign operations	1,587	48,244	16.0%
Treasury stock	(78)	(2,365)	(0.8%)
Total equity attributable to the parent company	6,989	212,545	70.6%
Non-controlling interests	127	3,847	1.3%
Total equity	7,116	216,392	71.9%
Total liabilities and equity	9,892	300,822	100.0%

Note： New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2014 exchange rate of NT $30.41 per U.S. Dollar. All figures are prepared in accordance with TIFRSs.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data


	Year over Year Comparison					Quarter over Quarter Comparison
	Three-Month Period Ended					Three-Month Period Ended
	September 30, 2014		September 30, 2013		%	September 30, 2014		June 30, 2014		%
	US$	NT$	US$	NT$	Chg.	US$	NT$	US$	NT$	Chg.
Net operating revenues	1,158	35,214	1,099	33,407	5.4%	1,158	35,214	1,180	35,869	(1.8%)
Operating costs	(909)	(27,655)	(858)	(26,070)	6.1%	(909)	(27,655)	(910)	(27,662)	(0.0%)
Gross profit	249	7,559	241	7,337	3.0%	249	7,559	270	8,207	(7.9%)
	21.5%	21.5%	22.0%	22.0%		21.5%	21.5%	22.9%	22.9%
Operating expenses
- Sales and marketing expenses	(32)	(957)	(26)	(778)	23.0%	(32)	(957)	(36)	(1,097)	(12.8%)
- General and administrative expenses	(28)	(845)	(28)	(854)	(1.1%)	(28)	(845)	(28)	(857)	(1.4%)
- Research and development expenses	(114)	(3,468)	(107)	(3,262)	6.3%	(114)	(3,468)	(110)	(3,326)	4.3%
Subtotal	(174)	(5,270)	(161)	(4,894)	7.7%	(174)	(5,270)	(174)	(5,280)	(0.2%)
Net other operating income and expenses	(20)	(602)	(1)	(48)	100.0%	(20)	(602)	(0)	(10)	100.0%
Operating income	55	1,687	79	2,395	(29.6%)	55	1,687	96	2,917	(42.2%)
	4.8%	4.8%	7.2%	7.2%		4.8%	4.8%	8.1%	8.1%

Net non-operating income and expenses	43	1,305	51	1,561	(16.4%)	43	1,305	31	937	39.3%
Income from continuing operations before income tax	98	2,992	130	3,956	(24.4%)	98	2,992	127	3,854	(22.4%)
	8.5%	8.5%	11.8%	11.8%		8.5%	8.5%	10.7%	10.7%

Income tax expense	(13)	(413)	(19)	(590)	(30.0%)	(13)	(413)	(18)	(528)	(21.8%)
Net income	85	2,579	111	3,366	(23.4%)	85	2,579	109	3,326	(22.5%)
	7.3%	7.3%	10.1%	10.1%		7.3%	7.3%	9.3%	9.3%

Other comprehensive income (loss)	(50)	(1,501)	(74)	(2,249)	(33.3%)	(50)	(1,501)	4	103	-

Total comprehensive income	35	1,078	37	1,117	(3.5%)	35	1,078	113	3,429	(68.6%)

Net income attributable to:
Stockholders of the parent	96	2,916	114	3,476	(16.1%)	96	2,916	115	3,482	(16.3%)
Non-controlling interests	(11)	(337)	(3)	(110)	100.0%	(11)	(337)	(6)	(156)	100.0%

Comprehensive income attributable to:
Stockholders of the parent	45	1,372	41	1,255	9.3%	45	1,372	120	3,636	(62.3%)
Non-controlling interests	(10)	(294)	(4)	(138)	100.0%	(10)	(294)	(7)	(207)	42.0%

Earnings per share-basic	0.008	0.23	0.009	0.28		0.008	0.23	0.009	0.28
Earnings per ADS ⁽²⁾	0.038	1.15	0.046	1.40		0.038	1.15	0.046	1.40
Weighted average number of shares
outstanding (in millions)		12,501		12,460			12,501		12,489

Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2014 exchange rate of NT $30.41 per U.S. Dollar. All figures are prepared in accordance with TIFRSs.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data

	For the Three-Month Period Ended			For the Nine-Month Period Ended
	September 30, 2014			September 30, 2014
	US$	NT$	%	US$	NT$	%
Net operating revenues	1,158	35,214	100.0%	3,380	102,777	100.0%
Operating costs	(909)	(27,655)	(78.5%)	(2,668)	(81,110)	(78.9%)
Gross profit	249	7,559	21.5%	712	21,667	21.1%


Operating expenses
- Sales and marketing expenses	(32)	(957)	(2.7%)	(95)	(2,888)	(2.8%)
- General and administrative expenses	(28)	(845)	(2.4%)	(84)	(2,549)	(2.5%)
- Research and development expenses	(114)	(3,468)	(9.9%)	(333)	(10,129)	(9.9%)
Subtotal	(174)	(5,270)	(15.0%)	(512)	(15,566)	(15.2%)
Net other operating income and expenses	(20)	(602)	(1.7%)	(18)	(557)	(0.5%)
Operating income	55	1,687	4.8%	182	5,544	5.4%

Net non-operating income and expenses	43	1,305	3.7%	86	2,594	2.5%
Income from continuing operations before income tax	98	2,992	8.5%	268	8,138	7.9%


Income tax expense	(13)	(413)	(1.2%)	(37)	(1,122)	(1.1%)
Net income	85	2,579	7.3%	231	7,016	6.8%

Other comprehensive income (loss)	(50)	(1,501)	(4.2%)	90	2,731	2.7%

Total comprehensive income	35	1,078	3.1%	321	9,747	9.5%

Net income attributable to:
Stockholders of the parent	96	2,916	8.3%	249	7,578	7.4%
Non-controlling interests	(11)	(337)	(1.0%)	(18)	(562)	(0.6%)

Comprehensive income attributable to:
Stockholders of the parent	45	1,372	3.9%	338	10,269	10.0%
Non-controlling interests	(10)	(294)	(0.8%)	(17)	(522)	(0.5%)

Earnings per share-basic	0.008	0.23		0.020	0.61
Earnings per ADS ⁽²⁾	0.038	1.15		0.100	3.05

Weighted average number of shares outstanding (in millions)		12,501			12,490

Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2014 exchange rate of NT $30.41 per U.S. Dollar. All figures are prepared in accordance with TIFRSs. (2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Nine-Month Period Ended September 30, 2014
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)

	USD	NTD
Cash flows from operating activities :
Net income before tax	268	8,138
Depreciation & Amortization	986	29,994
Impairment loss on financial assets	8	257
Impairment loss on non-financial assets	20	597
Gain on disposal of investments	(57)	(1,739)
Changes in notes & accounts receivable	(167)	(5,084)
Changes in other current assets	(158)	(4,796)
Changes in assets, liabilities and others	(47)	(1,415)
Net cash provided by operating activities	853	25,952

Cash flows from investing activities :
Acquisition of available-for-sales financial assets	(5)	(167)
Proceeds from disposal of available-for-sale financial assets	72	2,199
Acquisition of financial assets measured at cost	(24)	(747)
Proceeds from sale of financial assets measured at cost	22	674
Acquisition ofinvestments accounted for under the equity method	(4)	(121)
Acquisition of property, plant and equipment	(889)	(27,029)
Proceeds from disposal of property, plant and equipment	8	253
Acquisition of intangible assets	(29)	(871)
Others	(0)	(7)
Net cash used in investing activities	(849)	(25,816)

Cash flows from financing activities :
Increase in short-term loans	78	2,364
Proceeds from bonds issued	164	5,000
Redemption of bonds	(339)	(10,306)
Proceeds from long-term loans	60	1,824
Repayments of long-term loans	(57)	(1,735)
Cash dividends and cash paid from additional paid-in capital	(206)	(6,253)
Others	14	419
Net cash used in financing activities	(286)	(8,687)

Effect of exchange rate changes on cash and cash equivalents	16	464
Net decrease in cash and cash equivalents	(266)	(8,087)

Cash and cash equivalents at beginning of period	1,672	50,831

Cash and cash equivalents at end of period	1,406	42,744


Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2014 exchange rate of NT $30.41 per U.S. Dollar. All figures are prepared in accordance with TIFRSs.

Contacts:

Bowen Huang / David Wong
UMC, Investor Relations
+886-2-2658-9168, ext. 16900
Email Contact / Email Contact

SOURCE United Microelectronics Corporation

Contact:

United Microelectronics Corporation
Web: http://www.umc.com/english/investors/3Q14_ASP_trend.asp

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