UMC Reports Third Quarter 2018 Results

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3Q18 reaches record high revenue of NT$39.39 billion; 14nm FinFET accounted for 5% of sales

Third Quarter 2018 Overview¹:

Revenue: NT$39.39 billion (US$1.29 billion)
Gross margin: 17.6%
Foundry revenue from 28nm: 13%; Foundry operating margin: 6.4%
Foundry capacity utilization rate: 94%
Net Income attributable to stockholders of the parent: NT$1.72 billion (US$56 million)
Earnings per share: NT$0.14; earnings per ADS: US$0.023

TAIPEI, Taiwan — (BUSINESS WIRE) — October 24, 2018 — United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the third quarter of 2018.

Third quarter consolidated revenue was NT$39.39 billion, up 1.4% QoQ from NT$38.85 billion in 2Q18 and 4.5% YoY from NT$37.70 billion in 3Q17. Consolidated gross margin for 3Q18 was 17.6%. Net income attributable to stockholders of the parent was NT$1.72 billion, with earnings per ordinary share of NT$0.14.

Jason Wang, co-president of UMC, said, “In the third quarter, foundry revenue reached a record high of NT$39.33 billion, up 1.4% from 2Q18. Foundry operating margin was 6.4%. Utilization rate reached 94%, bringing wafer shipments to 1.8 million 8-inch equivalent wafers. Loading across 8" and mature 12" technologies continued to operate at full capacity, as the company generated NT$10.16 billion of free cash flow during the quarter. In addition, we saw an increase in computing related applications, which offset the decline in the communication segment. From a long-term perspective, we believe numerous essential semiconductor components will continue to strengthen our specialty technology business. For example, Allegro Microsystems, a leader in high-performance power and sensor solutions, signed a multi-year manufacturing agreement with UMC to ensure long-term capacity support for their growing wafer requirements in industrial and automotive segments.”

Co-president Wang continued, “Looking into the next quarter, we are seeing a softening of wafer demand from customers, partly due to continued softness in entry and mid-end smartphones. The recent escalation of trade tensions, rising global crude oil prices and continuous weakening of emerging market currencies could further increase uncertainties in the broader economy. Meanwhile, we will continue the execution of our strategy to invest in return-driven goals while moderating the expansion of advanced technologies. We are confident that UMC’s globalization efforts will increase our customers’ competitive edge through geopolitical risk mitigation while enhancing shareholder value to preserve the best interests of all our stakeholders.”

¹ Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending September 30, 2018, the three-month period ending June 30, 2018, and the equivalent three-month period that ended September 30, 2017. For all 3Q18 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2018 exchange rate of NT$ 30.53 per U.S. Dollar.

Summary of Operating Results


Operating Results
(Amount: NT$ million)	3Q18	2Q18	QoQ % change	3Q17	YoY % change
Net Operating Revenues	39,387	38,852	1.4	37,698	4.5
Gross Profit	6,922	6,675	3.7	6,592	5.0
Operating Expenses	(5,702)	(5,213)	9.4	(5,404)	5.5
Net Other Operating Income and Expenses	1,215	1,719	(29.3)	441	175.5
Operating Income	2,435	3,181	(23.5)	1,629	49.5
Net Non-Operating Income and Expenses	(1,606)	(1,095)	46.7	1,236	-
Net Income Attributable to Stockholders of the Parent	1,720	3,659	(53.0)	3,473	(50.5)
EPS (NT$ per share)	0.14	0.30		0.28
(US$ per ADS)	0.023	0.049		0.046

Net operating revenues in 3Q18 increased 1.4% to NT$39.39 billion, including NT$39.33 billion from the foundry segment. Revenue contribution from 40nm and below technologies declined to 40%. Gross profit increased 3.7% to NT$6.92 billion, or 17.6% of revenue. Operating expenses increased 9.4% to NT$5.70 billion. Net other operating income was NT$1.21 billion, leading to operating income of NT$2.44 billion. Net non-operating expense was NT$1.61 billion. Net income attributable to stockholders of the parent was NT$1.72 billion.

Earnings per ordinary share for the quarter was NT$0.14. Earnings per ADS was US$0.023. The basic weighted average number of outstanding shares in 3Q18 was 12,053,892,152, compared with 12,048,575,089 shares in 2Q18 and 12,208,239,978 shares in 3Q17. The diluted weighted average number of outstanding shares was 13,354,955,886 in 3Q18, compared with 13,268,862,054 shares in 2Q18 and 13,441,188,010 shares in 3Q17. The fully diluted share count on September 30, 2018 was approximately 13,725,383,000. On September 30, 2018, UMC held 200 million treasury shares acquired from the 17th share buy-back programs.

Detailed Financials Section

Net operating revenues grew 1.4% to NT$39.39 billion. COGS increased 0.9% to NT$32.47 billion, as depreciation declined 4.9% to NT$11.55 billion while other manufacturing costs increased 4.4% to NT$20.92 billion. Gross profit was NT$6.92 billion. Operating expenses increased 9.4% to NT$5.70 billion. General and Administrative (G&A) expenses increased 28% to NT$1.39 billion. Sales & Marketing expenses declined 10.5% to NT$0.99 billion and R&D expenses were up 10% to NT$3.33 billion, or 8.5% of net operating revenues. Net other operating income was NT$1.21 billion, leading to an operating income of NT$2.44 billion.


COGS & Expenses
(Amount: NT$ million)	3Q18	2Q18	QoQ % change	3Q17	YoY % change
Net Operating Revenues	39,387	38,852	1.4	37,698	4.5
COGS	(32,465)	(32,177)	0.9	(31,106)	4.4
Depreciation	(11,549)	(12,139)	(4.9)	(11,145)	3.6
Other Mfg. Costs	(20,916)	(20,038)	4.4	(19,961)	4.8
Gross Profit	6,922	6,675	3.7	6,592	5.0
Gross Margin (%)	17.6%	17.2%		17.5%
Operating Expenses	(5,702)	(5,213)	9.4	(5,404)	5.5
G&A	(1,386)	(1,083)	28.0	(991)	39.9
Sales & Marketing	(987)	(1,103)	(10.5)	(1,070)	(7.8)
R&D	(3,329)	(3,027)	10.0	(3,343)	(0.4)
Net Other Operating Income & Expenses	1,215	1,719	(29.3)	441	175.5
Operating Income	2,435	3,181	(23.5)	1,629	49.5

Net non-operating expense in 3Q18 was NT$1.61 billion, primarily resulting from NT$961 million in exchange loss and NT$507 million in net interest expense.


Non-Operating Income and Expenses
(Amount: NT$ million)	3Q18	2Q18	3Q17
Non-Operating Income and Expenses	(1,606)	(1,095)	1,236
Net Interest Income and Expenses	(507)	(505)	(538)
Net Investment Gain and Loss	(126)	105	1,016
Exchange Gain and Loss	(961)	(720)	776
Other Gain and Loss	(12)	25	(18)

Cash inflow from operating activities was NT$15.77 billion. Cash outflow from investing activities totaled NT$5.48 billion, including NT$5.61 billion in CAPEX spending for the foundry segment, resulting in free cash flow of NT$10.16 billion. Cash outflow from financing activities totaled NT$3.25 billion, mainly from NT$8.56 billion in the payment of cash dividends, which was partly offset by cash inflows of NT$3.11 billion from bank loans and NT$2.20 billion in treasury stock sold to employees. Net cash inflow in 3Q18 was NT$6.33 billion. Over the next 12 months, the company expects to repay NT$3.01 billion in bank loans.


Cash Flow Summary
(Amount: NT$ million)	For the 3-Month Period Ended Sep. 30, 2018	For the 3-Month Period Ended Jun. 30, 2018
Cash Flow from Operating Activities	15,772	14,264
Net income before tax	829	2,086
Depreciation & Amortization	12,973	13,373
Net loss of financial assets and liabilities at FVTPL	797	112
Exchange loss on financial assets and liabilities	1,126	1,516
Changes in working capital	158	(1,354)
Interest paid	(94)	(911)
Income tax paid	(134)	(86)
Other	117	(472)
Cash Flow from Investing Activities	(5,476)	(6,077)
Capital expenditures	(5,612)	(3,901)
Acquisition of investments accounted for under the equity method	-	(840)
Changes in refundable deposits	58	(980)
Acquisition of intangible assets	(169)	(130)
Other	247	(226)
Cash Flow from Financing Activities	(3,253)	(10,795)
Bank loans	3,114	(8,859)
Treasury stock acquired	-	(2,534)
Treasury stock sold to employees	2,204	-
Cash dividends	(8,557)	-
Other	(14)	598
Effect of Exchange Rate	(716)	657
Net Cash Flow	6,327	(1,951)

Cash and cash equivalents increased to NT$81.52 billion. Days of inventory increased one day to 50 days.


Current Assets
(Amount: NT$ billion)	3Q18	2Q18	3Q17
Cash and Cash Equivalents	81.52	75.19	69.94
Notes & Accounts Receivable	25.61	27.01	22.61
Days Sales Outstanding	61	61	54
Inventories, net	17.59	17.66	17.10
Days of Inventory	50	49	49
Total Current Assets	140.15	137.08	124.71

Current liabilities decreased to NT$51.43 billion. Total liabilities decreased to NT$160.11 billion, leading to a debt to equity ratio of 75%.


Liabilities
(Amount: NT$ billion)	3Q18	2Q18	3Q17
Total Current Liabilities	51.43	59.17	82.36
Notes & Accounts Payable	6.89	7.41	6.61
Short-Term Credit / Bonds	20.33	17.23	48.74
Payable on Equipment	2.59	3.61	5.23
Dividends payable	-	8.56	-
Other	21.62	22.36	21.78
Long-Term Credit / Bonds	67.46	67.76	52.36
Long-Term Investment Liabilities	20.16	20.79	20.34
Total Liabilities	160.11	170.11	169.74
Debt to Equity	75%	81%	79%

Analysis of Revenue² for Foundry Segment

Revenue from Asia Pacific increased to 52%, while sales contribution from North American customers declined to 34%. Revenue from Japan remained at 3%.


Revenue Breakdown by Region
Region	3Q18	2Q18	1Q18	4Q17	3Q17
North America	34%	37%	42%	43%	43%
Asia Pacific	52%	51%	47%	45%	47%
Europe	11%	9%	8%	9%	8%
Japan	3%	3%	3%	3%	2%

Business from 14nm increased to 5% of 3Q18 revenue, while 28nm contribution declined to 13%.


Revenue Breakdown by Geometry
Geometry	3Q18	2Q18	1Q18	4Q17	3Q17
14nm and below	5%	3%	2%	2%	1%
14nm<x<=28nm	13%	15%	12%	15%	15%
28nm<x<=40nm	22%	26%	30%	28%	29%
40nm<x<=65nm	12%	12%	13%	12%	12%
65nm<x<=90nm	10%	7%	6%	5%	6%
90nm<x<=0.13um	11%	11%	11%	12%	12%
0.13um<x<=0.18um	14%	13%	13%	13%	12%
0.18um<x<=0.35um	10%	10%	10%	10%	10%
0.5um and above	3%	3%	3%	3%	3%

Revenue from fabless customers increased to 93% of revenue.


Revenue Breakdown by Customer Type
Customer Type	3Q18	2Q18	1Q18	4Q17	3Q17
Fabless	93%	92%	92%	91%	90%
IDM	7%	8%	8%	9%	10%

The communication segment declined to 43% of sales, while revenue from consumer applications remained at 28%. Computer related applications represented 19% of revenue.


Revenue Breakdown by Application ⁽¹⁾
Application	3Q18	2Q18	1Q18	4Q17	3Q17
Computer	19%	16%	14%	13%	14%
Communication	43%	47%	47%	49%	47%
Consumer	28%	28%	29%	29%	31%
Others	10%	9%	10%	9%	8%

⁽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) in 3Q18 increased marginally.

(To view ASP trend, visit http://www.umc.com/english/investors/3Q18_ASP_trend.asp)

Shipment and Utilization Rate³ for Foundry Segment

In 3Q18, wafer shipments declined 2.3% to 1,804K. Quarterly capacity increased 1.0% QoQ to 1,938K, resulting in an overall utilization rate of 94%.


Wafer Shipments
	3Q18	2Q18	1Q18	4Q17	3Q17
Wafer Shipments (8” K equivalents)	1,804	1,846	1,747	1,670	1,748


Quarterly Capacity Utilization Rate
	3Q18	2Q18	1Q18	4Q17	3Q17
Utilization Rate	94%	97%	94%	90%	96%
Total Capacity (8” K equivalents)	1,938	1,918	1,858	1,886	1,861

³ Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

Capacity⁴ for Foundry Segment

Total capacity in the third quarter reached 1,938K 8-inch equivalent wafers. We anticipate our fourth quarter capacity to grow by approximately 1% QoQ to 1,958K 8-inch equivalent wafers, which included capacity expansion at Fab 8C and Fab 8D.


Annual Capacity in thousands of wafers							Quarterly Capacity in thousands of wafers
FAB		Geometry (um)	2017	2016	2015	2014	FAB	4Q18E	3Q18	2Q18	1Q18
WTK	6"	3.5 – 0.45	422	423	421	448	WTK	93	93	106	104
Fab 8A	8"	0.5 – 0.25	825	827	813	813	Fab 8A	207	207	207	204
Fab 8C	8"	0.35 – 0.11	357	348	347	347	Fab 8C	108	92	92	91
Fab 8D	8"	0.13 – 0.09	341	342	341	358	Fab 8D	90	86	86	85
Fab 8E	8"	0.5 – 0.18	418	419	418	418	Fab 8E	105	105	105	103
Fab 8F	8"	0.18 – 0.11	417	401	388	388	Fab 8F	108	108	108	107
Fab 8S	8"	0.18 – 0.11	347	336	335	335	Fab 8S	93	93	93	92
HJ	8"	0.5 – 0.11	753	750	667	547	HJ	194	194	194	190
Fab 12A	12"	0.13 – 0.014	970	885	793	700	Fab 12A	250	250	250	246
Fab 12i	12"	0.13 – 0.040	537	584	572	573	Fab 12i	144	144	136	131
USCXM	12"	0.040 – 0.028	97	9	-	-	USCXM	51	51	46	35
Total⁽¹⁾			7,304	6,983	6,617	6,323	Total	1,958	1,938	1,918	1,858
YoY Growth Rate			5%	6%	5%	4%

⁽¹⁾One 6-inch wafer is converted into 0.5625(6²/8²) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12²/8²) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

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.

CAPEX for Foundry Segment

CAPEX spending in 3Q18 was US$183 million, bringing the first nine months of 2018 capital expenditures to US$509 million. Full year 2018 CAPEX is budgeted for US$1.1 billion.


Capital Expenditure by Year - in US$ billion
Year	2017	2016	2015	2014	2013
CAPEX	$ 1.4	$ 2.8	$ 1.9	$ 1.4	$ 1.1


2018 CAPEX Plan
8"		12"		Total
33%		67%		US$1.1 billion

Fourth Quarter of 2018 Outlook & Guidance

Quarter-over-Quarter Guidance:

Wafer Shipments: To decrease by 4-5%
ASP in USD: To decline by 4-5%
Profitability: Gross profit margin will be in the low-teens % range
Foundry Segment Capacity Utilization: High 80% range
2018 CAPEX for Foundry Segment: US$1.1 billion

Recent Developments / Announcements


Sep. 13, 2018				UMC Selected as a DJSI Global Component for 11(th) Consecutive Year

Aug. 20, 2018				UMC Shareholders Approve Agenda Items at Company's 2018 First Extraordinary General Meeting

Jul. 31, 2018				Allegro MicroSystems and UMC Sign Long-Term Foundry Agreement

Jul 25, 2018				UMC 2Q 2018 Financial Results

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

Conference Call / Webcast Announcement


Wednesday, October 24, 2018

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:
USA Toll Free:				1-866 836-0101
Taiwan Number:				02-2192-8016
Other Areas:				+886-2-2192-8016

Access Code:				UMC

A live webcast and replay of the 3Q18 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 600,000 wafers per month. The company employs more than 20,000 people worldwide, with offices in Taiwan, 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 introduction of new services and technologies, future outsourcing, competition, wafer capacity, 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. 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 United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States 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) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) 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 natural disasters, 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 United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and 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 Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or 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 generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

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.


UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheet As of September 30, 2018 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


	September 30, 2018
	US$	NT$	%
Assets
Current assets
Cash and cash equivalents	2,670	81,520	21.9%
Financial assets at fair value through profit or loss, current	14	422	0.1%
Contract assets, current	11	338	0.1%
Notes & Accounts receivable, net	839	25,610	6.9%
Inventories, net	576	17,589	4.7%
Other current assets	481	14,674	3.9%
Total current assets	4,591	140,153	37.6%

Non-current assets
Funds and investments	1,188	36,278	9.7%
Property, plant and equipment	5,821	177,716	47.7%
Other non-current assets	607	18,522	5.0%
Total non-current assets	7,616	232,516	62.4%
Total assets	12,207	372,669	100.0%

Liabilities
Current liabilities
Short-term loans	485	14,818	4.0%
Hedging financial liabilities, current	2	64	0.0%
Contract liabilities, current	65	1,979	0.5%
Payables	777	23,714	6.4%
Current portion of long-term liabilities	180	5,510	1.5%
Other current liabilities	176	5,348	1.4%
Total current liabilities	1,685	51,433	13.8%

Non-current liabilities
Bonds payable	1,271	38,788	10.4%
Long-term loans	939	28,670	7.7%
Other non-current liabilities	1,350	41,220	11.1%
Total non-current liabilities	3,560	108,678	29.2%
Total liabilities	5,245	160,111	43.0%

Equity
Equity attributable to the parent company
Capital	4,069	124,243	33.3%
Additional paid-in capital	1,319	40,270	10.8%
Retained earnings, unrealized gains or losses on financial assets measured at fair value through other comprehensive income, exchange differences on translation of foreign operations and gains or losses on hedging Instruments	1,640	50,068	13.5%
Treasury stock	(82)	(2,516)	(0.7%)
Total equity attributable to the parent company	6,946	212,065	56.9%
Non-controlling interests	16	493	0.1%
Total equity	6,962	212,558	57.0%
Total liabilities and equity	12,207	372,669	100.0%


Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.

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, 2018		September 30, 2017		Chg.	September 30, 2018		June 30, 2018		Chg.
	US$	NT$	US$	NT$	%	US$	NT$	US$	NT$	%
Net operating revenues	1,290	39,387	1,235	37,698	4.5%	1,290	39,387	1,273	38,852	1.4%
Operating costs	(1,063)	(32,465)	(1,019)	(31,106)	4.4%	(1,063)	(32,465)	(1,054)	(32,177)	0.9%
Gross profit	227	6,922	216	6,592	5.0%	227	6,922	219	6,675	3.7%
	17.6%	17.6%	17.5%	17.5%		17.6%	17.6%	17.2%	17.2%
Operating expenses
- Sales and marketing expenses	(32)	(987)	(35)	(1,070)	(7.8%)	(32)	(987)	(36)	(1,103)	(10.5%)
- General and administrative expenses	(46)	(1,386)	(32)	(991)	39.9%	(46)	(1,386)	(36)	(1,083)	28.0%
- Research and development expenses	(109)	(3,329)	(110)	(3,343)	(0.4%)	(109)	(3,329)	(99)	(3,027)	10.0%
Subtotal	(187)	(5,702)	(177)	(5,404)	5.5%	(187)	(5,702)	(171)	(5,213)	9.4%
Net other operating income and expenses	40	1,215	14	441	175.5%	40	1,215	56	1,719	(29.3%)
Operating income	80	2,435	53	1,629	49.5%	80	2,435	104	3,181	(23.5%)
	6.2%	6.2%	4.3%	4.3%		6.2%	6.2%	8.2%	8.2%

Net non-operating income and expenses	(53)	(1,606)	41	1,236	-	(53)	(1,606)	(36)	(1,095)	46.7%
Income from continuing operations before income tax	27	829	94	2,865	(71.1%)	27	829	68	2,086	(60.3%)
	2.1%	2.1%	7.6%	7.6%		2.1%	2.1%	5.4%	5.4%

Income tax benefit (expense)	(21)	(632)	(13)	(401)	57.6%	(21)	(632)	11	331	-
Net income	6	197	81	2,464	(92.0%)	6	197	79	2,417	(91.8%)
	0.5%	0.5%	6.5%	6.5%		0.5%	0.5%	6.2%	6.2%

Other comprehensive income (loss)	(51)	(1,568)	(35)	(1,068)	46.8%	(51)	(1,568)	87	2,641	-

Total comprehensive income (loss)	(45)	(1,371)	46	1,396	-	(45)	(1,371)	166	5,058	-

Net income attributable to:
Stockholders of the parent	56	1,720	114	3,473	(50.5%)	56	1,720	120	3,659	(53.0%)
Non-controlling interests	(50)	(1,523)	(33)	(1,009)	50.9%	(50)	(1,523)	(41)	(1,242)	22.6%

Comprehensive income (loss) attributable to:
Stockholders of the parent	9	279	79	2,402	(88.4%)	9	279	206	6,297	(95.6%)
Non-controlling interests	(54)	(1,650)	(33)	(1,006)	64.0%	(54)	(1,650)	(40)	(1,239)	33.2%

Earnings per share-basic	0.005	0.14	0.009	0.28		0.005	0.14	0.010	0.30
Earnings per ADS ⁽²⁾	0.023	0.70	0.046	1.40		0.023	0.70	0.049	1.50
Weighted average number of shares
outstanding (in millions)		12,054		12,208			12,054		12,049


Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.
(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$) and U.S. Dollars (US$)


	For the Three-Month Period Ended September 30, 2018			For the Nine-Month Period Ended September 30, 2018
	US$	NT$	%	US$	NT$	%
Net operating revenues	1,290	39,387	100.0%	3,791	115,735	100.0%
Operating costs	(1,063)	(32,465)	(82.4%)	(3,194)	(97,496)	(84.2%)
Gross profit	227	6,922	17.6%	597	18,239	15.8%


Operating expenses
- Sales and marketing expenses	(32)	(987)	(2.5%)	(98)	(2,999)	(2.6%)
- General and administrative expenses	(46)	(1,386)	(3.5%)	(114)	(3,485)	(3.0%)
- Research and development expenses	(109)	(3,329)	(8.5%)	(304)	(9,280)	(8.0%)
Subtotal	(187)	(5,702)	(14.5%)	(516)	(15,764)	(13.6%)
Net other operating income and expenses	40	1,215	3.1%	128	3,911	3.3%
Operating income	80	2,435	6.2%	209	6,386	5.5%

Net non-operating income and expenses	(53)	(1,606)	(4.1%)	(53)	(1,615)	(1.4%)
Income from continuing operations before income tax	27	829	2.1%	156	4,771	4.1%


Income tax benefit (expense)	(21)	(632)	(1.6%)	29	872	0.8%
Net income	6	197	0.5%	185	5,643	4.9%

Other comprehensive income (loss)	(51)	(1,568)	(4.0%)	27	840	0.7%

Total comprehensive income (loss)	(45)	(1,371)	(3.5%)	212	6,483	5.6%

Net income attributable to:
Stockholders of the parent	56	1,720	4.4%	288	8,780	7.6%
Non-controlling interests	(50)	(1,523)	(3.9%)	(103)	(3,137)	(2.7%)

Comprehensive income (loss) attributable to:
Stockholders of the parent	9	279	0.7%	319	9,734	8.4%
Non-controlling interests	(54)	(1,650)	(4.2%)	(107)	(3,251)	(2.8%)

Earnings per share-basic	0.005	0.14		0.024	0.73
Earnings per ADS ⁽²⁾	0.023	0.70		0.120	3.65

Weighted average number of shares outstanding (in millions)		12,054			12,101


Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.
(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, 2018 Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)


	US$	NT$
Cash flows from operating activities :
Net income before tax	156	4,771
Depreciation & Amortization	1,298	39,635
Exchange loss on financial assets and liabilities	42	1,286
Changes in notes & accounts receivable	(109)	(3,322)
Changes in other current assets	34	1,051
Changes in contract liabilities	(65)	(1,970)
Changes in other payables	(36)	(1,091)
Changes in assets, liabilities and others	(49)	(1,548)
Net cash provided by operating activities	1,271	38,812

Cash flows from investing activities :
Acquisition of investments accounted for under the equity method	(28)	(840)
Acquisition of property, plant and equipment	(499)	(15,229)
Increase in refundable deposits	(28)	(861)
Others	198	6,044
Net cash used in investing activities	(357)	(10,886)

Cash flows from financing activities :
Decrease in short-term loans	(343)	(10,469)
Redemption of bonds	(246)	(7,500)
Cash dividends	(280)	(8,557)
Treasury stock acquired	(102)	(3,129)
Treasury stock sold to employees	72	2,204
Others	(10)	(310)
Net cash used in financing activities	(909)	(27,761)

Effect of exchange rate changes on cash and cash equivalents	(10)	(320)
Net decrease in cash and cash equivalents	(5)	(155)

Cash and cash equivalents at beginning of period	2,675	81,675

Cash and cash equivalents at end of period	2,670	81,520


Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2018 exchange rate of NT $30.53 per U.S. Dollar.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181024005436/en/

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UMC, Investor Relations
Michael Lin / David Wong
+ 886-2-2658-9168, ext. 16900
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