UMC Reports First Quarter 2023 Results

Rhea-AI Summary

United Microelectronics Corporation (NYSE: UMC) reported a 20.1% sequential decline in Q1 2023 revenue to NT$54.2 billion (US$1.78 billion), and a 14.5% year-over-year decrease. However, the company maintained a gross margin of 35.5% and a net income of NT$16.2 billion (US$532 million), resulting in earnings per share of NT$1.31. The drop in revenue was attributed to sluggish wafer demand and inventory corrections, with wafer shipments down 17.5% sequentially. Despite these challenges, automotive and industrial segments showed growth, contributing positively to UMC's financial health. UMC aims to address ongoing inventory corrections and plans to distribute a cash dividend of approximately NT$3.60 per share, emphasizing its commitment to sustainability with a NT$1.8 billion Circular Economy & Recycling Innovation Center.

Positive

• Gross margin remained firm at 35.5% despite revenue decline.
• Net income attributable to shareholders was NT$16.2 billion.
• Proposed cash dividend of NT$3.60 per share, indicating strong cash flow.
• Growth in automotive sales, accounting for 17% of total revenue.

Negative

• Revenue decreased 20.1% QoQ and 14.5% YoY.
• Wafer shipments fell 17.5% QoQ.
• Utilization rate dropped to 70%, reflecting reduced demand.

Structural profitability intact despite industry consolidating at the trough

First Quarter 2023 Overview¹:

• Revenue: NT$54.2 billion (US$1.78 billion)
• Gross margin: 35.5%; Operating margin: 26.7%
• Revenue from 22/28nm: 26%
• Capacity utilization rate: 70%
• Net income attributable to shareholders of the parent: NT$16.2 billion (US$532 million)
• Earnings per share: NT$1.31; earnings per ADS: US$0.215

TAIPEI, Taiwan--(BUSINESS WIRE)-- United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2023.

First quarter consolidated revenue was NT$54.2 billion, decreasing 20.1% QoQ from NT$67.8 billion in 4Q22. Compared to a year ago, 1Q23 revenue declined 14.5% YoY from NT$63.4 billion in 1Q22. Consolidated gross margin for 1Q23 was 35.5%. Net income attributable to the shareholders of the parent was NT$16.2 billion, with earnings per ordinary share of NT$1.31.

Jason Wang, co-president of UMC, said, “In the first quarter of 2023, our business was impacted by sluggish wafer demand as customers continued to digest elevated inventory levels. In line with guidance previously provided, wafer shipments fell 17.5% QoQ and utilization rate dropped to 70%, while average selling price stayed firm during the quarter. Factoring in a less favorable foreign exchange rate, revenue in the first quarter fell 20.1% QoQ. Despite lower utilization, gross margin remained firm at 35.5%, reflecting improved structural profitability and optimized product mix. Although demand weakened across major end markets, our automotive and industrial segments posted growth during the quarter. Automotive sales, in particular, accounted for 17% of overall first quarter revenue. While this partially reflects declines in other segments, we expect automotive to remain a significant revenue contributor and key growth driver for UMC going forward, as IC content in cars continue to increase driven by electrification and autonomous driving.”

Co-president Wang said: “Entering the second quarter of 2023, we expect customers’ inventory correction to linger given the softness in overall end market demand. As a result, our wafer shipment will be flat this quarter. Meanwhile, the Company continues to implement strict cost control measures to ensure our profitability remains intact through near-term cyclicality. Going forward, we believe our strategy of focusing on the development of differentiated solutions across numerous logic and specialty technology platforms such as eHV, RFSOI, and BCD will help us secure future business and expand our presence in the IC industry. While positioning for future business growth, UMC is also committed to maintaining a high dividend payout ratio. In Q1, the Board of Directors proposed to distribute a cash dividend of approximately NT$3.60 per share, subject to shareholders’ approval.”

“UMC has invested in a number of initiatives over the years to minimize the environmental impact of our operations, such as increasing the reuse rate of resources in our fabs. Last month, we announced that we will be building the Circular Economy & Recycling Innovation Center at our Fab 12A. The new facility, which will process semiconductor manufacturing waste into value-added products that can be reused or sold, is expected to reduce waste from UMC’s Taiwan manufacturing sites by one-third. This NT$1.8 billion project represents our commitment to sustainable practices as well as innovative solutions that create value for the Company and our stakeholders,” Co-president Wang added.

Summary of Operating Results

Operating Results
(Amount: NT$ million)	1Q23		4Q22		QoQ % change		1Q22		YoY % change
Operating Revenues	54,209		67,836		(20.1)		63,423		(14.5)
Gross Profit	19,224		29,124		(34.0)		27,504		(30.1)
Operating Expenses	(5,780)		(6,798)		(15.0)		(6,513)		(11.3)
Net Other Operating Income and Expenses	1,037		1,311		(20.9)		1,343		(22.8)
Operating Income	14,481		23,637		(38.7)		22,334		(35.2)
Net Non-Operating Income and Expenses	4,647		889		422.6		1,314		253.8
Net Income Attributable to Shareholders of the Parent	16,183		19,068		(15.1)		19,808		(18.3)
EPS (NT$ per share)	1.31		1.54				1.61
(US$ per ADS)	0.215		0.253				0.264

First quarter operating revenues declined by 20.1% sequentially to NT$54.21 billion as inventory correction continued within the semi industry, lowering wafer shipments. Revenue contribution from 40nm and below technologies represented 41% of wafer revenue. Gross profit decreased 34% QoQ to NT$19.22 billion, or 35.5% of revenue. Operating expenses declined 15% QoQ to NT$5.78 billion. Net other operating income declined to NT$1.04 billion. Net non-operating income totaled NT$4.65 billion, reflecting the mark to market securities. Net income attributable to shareholders of the parent amounted to NT$16.18 billion.

Earnings per ordinary share for the quarter was NT$1.31. Earnings per ADS was US$0.215. The basic weighted average number of shares outstanding in 1Q23 was 12,348,880,384, compared with 12,348,880,384 shares in 4Q22 and 12,283,479,334 shares in 1Q22. The diluted weighted average number of shares outstanding was 12,597,236,266 in 1Q23, compared with 12,684,106,050 shares in 4Q22 and 12,534,728,721 shares in 1Q22. The fully diluted shares counted on March 31, 2023 were approximately 12,597,236,000.

Detailed Financials Section

Operating revenues decreased to NT$54.21 billion. COGS declined 9.6% to NT$34.99 billion, which included 11% sequential decrease in other manufacturing costs. Gross profit fell 34% QoQ to NT$19.22 billion. Operating expenses declined to NT$5.78 billion, as R&D fell 18.8% to NT$2.77 billion, representing 5.1% of revenue while G&A sequentially declined 13.8% to NT$2.10 billion. Net other operating income was NT$1.04 billion. In 1Q23, operating income declined 38.7% QoQ to NT$14.48 billion.

COGS & Expenses
(Amount: NT$ million)	1Q23		4Q22		QoQ % change		1Q22		YoY % change
Operating Revenues	54,209		67,836		(20.1)		63,423		(14.5)
COGS	(34,985)		(38,712)		(9.6)		(35,919)		(2.6)
Depreciation	(8,439)		(8,898)		(5.2)		(9,807)		(13.9)
Other Mfg. Costs	(26,546)		(29,814)		(11.0)		(26,112)		1.7
Gross Profit	19,224		29,124		(34.0)		27,504		(30.1)
Gross Margin (%)	35.5%		42.9%				43.4%
Operating Expenses	(5,780)		(6,798)		(15.0)		(6,513)		(11.3)
G&A	(2,102)		(2,438)		(13.8)		(2,226)		(5.6)
Sales & Marketing	(950)		(953)		(0.3)		(1,255)		(24.3)
R&D	(2,767)		(3,407)		(18.8)		(3,033)		(8.8)
Expected Credit Impairment gain (loss)	39		(0)		-		1		3,983.2
Net Other Operating Income & Expenses	1,037		1,311		(20.9)		1,343		(22.8)
Operating Income	14,481		23,637		(38.7)		22,334		(35.2)

Net non-operating income in 1Q23 was NT$4.65 billion, primarily reflecting the NT$3.99 billion in net investment gain and the NT$0.91 billion in net interest income partially offset by the NT$0.24 billion in exchange loss.

Non-Operating Income and Expenses
(Amount: NT$ million)	1Q23		4Q22		1Q22
Non-Operating Income and Expenses	4,647		889		1,314
Net Interest Income and Expenses	908		584		(323)
Net Investment Gain and Loss	3,987		1,382		576
Exchange Gain and Loss	(239)		(1,057)		926
Other Gain and Loss	(9)		(20)		135

In 1Q23, cash inflow from operating activities was NT$26.96 billion. Cash outflow from investing activities amounted to NT$29.59 billion, which included NT$30.38 billion in capital expenditure, resulting in free cash outflow of NT$3.42 billion. Cash inflow from financing was NT$1.35 billion, primarily from a NT$1.99 billion in increase in deposits-in partially offset by a NT$0.49 billion in repayment of bank loans. Net cash outflow in 1Q23 totaled NT$1.99 billion. Over the next 12 months, the company expects to repay NT$2.43 billion in bank loans.

Cash Flow Summary
(Amount: NT$ million)	For the 3-Month Period Ended Mar. 31, 2023		For the 3-Month Period Ended Dec. 31, 2022
Cash Flow from Operating Activities	26,964		40,956
Net income before tax	19,128		24,526
Depreciation & Amortization	9,903		10,477
Share of profit of associates and joint ventures	(3,248)		(1,705)
Income tax paid	(2,936)		(385)
Changes in working capital & others	4,117		8,043
Cash Flow from Investing Activities	(29,586)		(36,045)
Decrease in financial assets measured at amortized cost	598		9
Acquisition of PP&E	(29,756)		(35,951)
Acquisition of intangible assets	(528)		(440)
Others	100		337
Cash Flow from Financing Activities	1,347		(9,185)
Bank loans	(485)		(8,082)
Increase (decrease) in deposits-in	1,991		(389)
Others	(159)		(714)
Effect of Exchange Rate	(710)		(2,556)
Net Cash Flow	(1,985)		(6,830)
Beginning balance	173,819		180,649
Ending balance	171,834		173,819

Cash and cash equivalents slightly decreased to NT$171.83 billion. Days of inventory increased by 11 days to 83 days.

Current Assets
(Amount: NT$ billion)	1Q23		4Q22		1Q22
Cash and Cash Equivalents	171.83		173.82		172.17
Accounts Receivable	27.07		36.98		38.05
Days Sales Outstanding	54		55		53
Inventories, net	32.68		31.07		25.40
Days of Inventory	83		72		61
Total Current Assets	241.97		252.37		249.68

Current liabilities slightly decreased to NT$105.89 billion. Long-term credit/bonds decreased to NT$37.30 billion. Total liabilities decreased to NT$194.08 billion, leading to a debt to equity ratio of 55%.

Liabilities
(Amount: NT$ billion)	1Q23		4Q22		1Q22
Total Current Liabilities	105.89		108.57		93.12
Accounts Payable	9.21		8.98		9.06
Short-Term Credit / Bonds	9.77		7.59		22.58
Payables on Equipment	18.44		18.63		7.63
Other	68.47		73.37		53.85
Long-Term Credit / Bonds	37.30		39.88		50.07
Long-Term Investment Liabilities	4.26		4.22		8.59
Total Liabilities	194.08		197.60		180.62
Debt to Equity	55%		59%		60%

Analysis of Revenue²

Revenue from Asia-Pacific declined to 50% while business from North America was 31% of sales. Business from Europe increased to 11% while contribution from Japan was 8%.

Revenue Breakdown by Region
Region		1Q23		4Q22		3Q22		2Q22		1Q22
North America		31%		30%		23%		22%		22%
Asia Pacific		50%		54%		62%		65%		64%
Europe		11%		9%		9%		8%		8%
Japan		8%		7%		6%		5%		6%

Revenue contribution from 22/28nm declined to 26% of the wafer revenue, while 40nm contribution was 15% of sales.

Revenue Breakdown by Geometry
Geometry		1Q23		4Q22		3Q22		2Q22		1Q22
14nm and below		0%		0%		0%		0%		0%
14nm<x<=28nm		26%		28%		25%		22%		20%
28nm<x<=40nm		15%		17%		17%		18%		18%
40nm<x<=65nm		19%		17%		18%		19%		19%
65nm<x<=90nm		10%		9%		8%		7%		8%
90nm<x<=0.13um		12%		12%		12%		12%		12%
0.13um<x<=0.18um		10%		10%		10%		12%		13%
0.18um<x<=0.35um		6%		5%		8%		8%		7%
0.5um and above		2%		2%		2%		2%		3%

Revenue from fabless customers accounted for 77% of revenue.

Revenue Breakdown by Customer Type
Customer Type		1Q23		4Q22		3Q22		2Q22		1Q22
Fabless		77%		81%		83%		86%		87%
IDM		23%		19%		17%		14%		13%

Revenue from the communication segment represented 44%, while business from computer applications decreased to 9%. Business from consumer applications was 24% as other segments grew to 23% of revenue.

Revenue Breakdown by Application (1)
Application		1Q23		4Q22		3Q22		2Q22		1Q22
Computer		9%		12%		14%		16%		17%
Communication		44%		45%		45%		45%		45%
Consumer		24%		25%		27%		27%		26%
Others		23%		18%		14%		12%		12%

(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, WLAN. Communication consists of handset components, broadband, 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.

Blended ASP Trend

Blended average selling price (ASP) grew slightly in 1Q23.

(To view blended ASP trend, please click here for 1Q23 ASP)

Shipment and Utilization Rate³

Wafer shipments decreased 17.5% QoQ to 1,826K in the first quarter, while quarterly capacity was 2,522K. Overall utilization rate in 1Q23 was 70%.

Wafer Shipments
		1Q23		4Q22		3Q22		2Q22		1Q22
Wafer Shipments (8” K equivalents)		1,826		2,213		2,597		2,622		2,513
Quarterly Capacity Utilization Rate
		1Q23		4Q22		3Q22		2Q22		1Q22
Utilization Rate		70%		90%		100%+		100%+		100%+
Total Capacity (8” K equivalents)		2,522		2,543		2,539		2,528		2,420

Capacity⁴

Total capacity in the first quarter decreased to 2,522K 8-inch equivalent wafers. Capacity will grow in the second quarter of 2023 to 2,626K 8-inch equivalent wafers, primarily representing the capacity expansion at 12A facility.

Annual Capacity in thousands of wafers											Quarterly Capacity in thousands of wafers
FAB		Geometry (um)	2022		2021		2020		2019		FAB				2Q23E		1Q23		4Q22		3Q22
WTK	6"	5 – 0.15	335		329		371		370		WTK		6"		82		80		85		85
8A	8"	3 – 0.11	765		755		802		825		8A		8"		207		189		192		192
8C	8"	0.35 – 0.11	459		459		452		436		8C		8"		120		113		115		115
8D	8"	0.18 – 0.09	410		380		371		359		8D		8"		109		101		103		103
8E	8"	0.6 – 0.14	469		457		449		426		8E		8"		122		116		118		118
8F	8"	0.18 – 0.11	550		514		485		434		8F		8"		145		136		138		138
8S	8"	0.18 – 0.11	443		408		373		372		8S		8"		112		109		111		111
8N	8"	0.5 – 0.11	952		917		917		831		8N		8"		248		244		245		242
12A	12"	0.13 – 0.014	1,170		1,070		1,044		997		12A		12"		321		305		301		301
12i	12"	0.13 – 0.040	655		641		628		595		12i		12"		164		162		164		164
12X	12"	0.080 – 0.022	314		284		217		203		12X		12"		80		78		80		80
12M	12"	0.13 – 0.040	436		395		391		98		12M		12"		110		108		110		110
Total(1)			10,031		9,453		9,188		8,148		Total				2,626		2,522		2,543		2,539
YoY Growth Rate			6%		3%		13%		6%

(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. Total capacity figures are expressed in 8-inch equivalent wafers.

CAPEX

CAPEX spending in 1Q23 totaled US$998 million. 2023 cash-based CAPEX budget will be US$3.0 billion.

Capital Expenditure by Year - in US$ billion
Year		2022		2021		2020		2019		2018
CAPEX		$ 2.7		$ 1.8		$ 1.0		$ 0.6		$ 0.7

2023 CAPEX Plan
8"		12"		Total
10%		90%		US$3.0 billion

Second Quarter 2023 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To remain flat
• ASP in USD: To remain flat
• Gross Profit Margin: Will be in the mid-30% range
• Capacity Utilization: low-70% range
• 2023 CAPEX: US$3.0 billion

Recent Developments / Announcements

Feb. 1, 2023		UMC and Cadence Collaborate on 3D-IC Hybrid Bonding Reference Flow
Feb. 22, 2023		UMC Board of Directors Announces Proposals for its Annual Shareholders Meeting
Mar. 2, 2023		UMC Introduces New 28eHV+ Platform for Wireless, VR/AR, and IoT Display Applications
Mar. 7, 2023		Infineon and UMC Extend Automotive Partnership with Long-Term Agreement for 40nm eNVM Microcontroller Production
Mar. 17, 2023		UMC Circular Economy & Recycling Innovation Center Breaks Ground for a Zero Waste Future
Mar. 28, 2023		Memory and UMC Expand Low-Power Memory Solutions for AIoT and Mobile Markets with 22nm RRAM Qualification

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

Conference Call / Webcast Announcement

Wednesday, April 26, 2023

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

Dial-in numbers and Access Codes:
Taiwan Number:				02 3396 1191
Taiwan Toll Free:				0080 185 4007
USA Toll Free:				+1 866 212 5567
Other Areas:				+886 2 3396 1191
Access Code:				9816026#

A live webcast and replay of the 1Q23 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 company. The company provides high quality IC fabrication services, focusing on logic and various specialty technologies to serve all major sectors of the electronics industry. UMC’s comprehensive IC processing technologies and manufacturing solutions include logic/mixed-signal, embedded high-voltage, embedded non-volatile-memory, RFSOI and BCD. UMC has total 12 fabs in production with combined capacity of approximately 850,000 8-inch equivalent wafers per month, and all of them are certified with IATF 16949 automotive quality standard. Most of UMC's 12-inch and 8-inch fabs with its core R&D are located in Taiwan, with additional ones throughout Asia. UMC is headquartered in Hsinchu, Taiwan, plus local offices in China, United States, Europe, Japan, Korea and Singapore, with worldwide total 20,000 employees. For more information, please visit: https://www.umc.com.

Safe Harbor Statements

This press release contains 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. These forward-looking statements include, but are not limited to, statements regarding anticipated financial results for the first quarter of 2023; the expected wafer shipment and ASP; the anticipated annual budget; capex strategies; environmental protection goals and water management strategies; impact of foreign currency exchange rates; expected foundry capacities; the ability to obtain new business opportunities; and information under the heading “First Quarter of 2023 Outlook and Guidance.”

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 risk factors is included in UMC’s filings with the United States Securities and Exchange Commission, including its Annual Report on Form 20-F. 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.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of March 31, 2023
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	March 31, 2023
	US$		NT$		%
Assets
Current assets
Cash and cash equivalents	5,645		171,834		31.3%
Accounts receivable, net	889		27,065		4.9%
Inventories, net	1,074		32,679		6.0%
Other current assets	341		10,389		1.8%
Total current assets	7,949		241,967		44.0%
Non-current assets
Funds and investments	2,368		72,087		13.1%
Property, plant and equipment	6,314		192,185		35.0%
Right-of-use assets	248		7,540		1.4%
Other non-current assets	1,177		35,852		6.5%
Total non-current assets	10,107		307,664		56.0%
Total assets	18,056		549,631		100.0%
Liabilities
Current liabilities
Short-term loans	3		100		0.0%
Payables	2,311		70,346		12.8%
Current portion of long-term liabilities	318		9,674		1.8%
Other current liabilities	847		25,766		4.7%
Total current liabilities	3,479		105,886		19.3%
Non-current liabilities
Bonds payable	689		20,986		3.8%
Long-term loans	536		16,317		3.0%
Lease liabilities, noncurrent	170		5,187		0.9%
Other non-current liabilities	1,502		45,705		8.3%
Total non-current liabilities	2,897		88,195		16.0%
Total liabilities	6,376		194,081		35.3%
Equity
Equity attributable to the parent company
Capital	4,108		125,047		22.8%
Additional paid-in capital	426		12,976		2.3%
Retained earnings and other components of equity	7,135		217,183		39.5%
Total equity attributable to the parent company	11,669		355,206		64.6%
Non-controlling interests	11		344		0.1%
Total equity	11,680		355,550		64.7%
Total liabilities and equity	18,056		549,631		100.0%
Note：New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2023 exchange rate of NT $30.44 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
	March 31, 2023						March 31, 2022						Chg.			March 31, 2023						December 31, 2022						Chg.
	US$			NT$			US$			NT$			%			US$			NT$			US$			NT$			%
Operating revenues	1,781			54,209			2,084			63,423			(14.5	%)		1,781			54,209			2,229			67,836			(20.1	%)
Operating costs	(1,149	)		(34,985	)		(1,180	)		(35,919	)		(2.6	%)		(1,149	)		(34,985	)		(1,272	)		(38,712	)		(9.6	%)
Gross profit	632			19,224			904			27,504			(30.1	%)		632			19,224			957			29,124			(34.0	%)
	35.5	%		35.5	%		43.4	%		43.4	%					35.5	%		35.5	%		42.9	%		42.9	%
Operating expenses
- Sales and marketing expenses	(31	)		(950	)		(41	)		(1,255	)		(24.3	%)		(31	)		(950	)		(31	)		(953	)		(0.3	%)
- General and administrative expenses	(69	)		(2,102	)		(73	)		(2,226	)		(5.6	%)		(69	)		(2,102	)		(80	)		(2,438	)		(13.8	%)
- Research and development expenses	(91	)		(2,767	)		(100	)		(3,033	)		(8.8	%)		(91	)		(2,767	)		(112	)		(3,407	)		(18.8	%)
- Expected credit impairment gain (loss)	1			39			0			1			3,983.2	%		1			39			(0	)		(0	)		-
Subtotal	(190	)		(5,780	)		(214	)		(6,513	)		(11.3	%)		(190	)		(5,780	)		(223	)		(6,798	)		(15.0	%)
Net other operating income and expenses	34			1,037			44			1,343			(22.8	%)		34			1,037			43			1,311			(20.9	%)
Operating income	476			14,481			734			22,334			(35.2	%)		476			14,481			777			23,637			(38.7	%)
	26.7	%		26.7	%		35.2	%		35.2	%					26.7	%		26.7	%		34.8	%		34.8	%
Net non-operating income and expenses	152			4,647			43			1,314			253.8	%		152			4,647			29			889			422.6	%
Income from continuing operations before income tax	628			19,128			777			23,648			(19.1	%)		628			19,128			806			24,526			(22.0	%)
	35.3	%		35.3	%		37.3	%		37.3	%					35.3	%		35.3	%		36.2	%		36.2	%
Income tax expense	(90	)		(2,743	)		(118	)		(3,582	)		(23.4	%)		(90	)		(2,743	)		(178	)		(5,406	)		(49.2	%)
Net income	538			16,385			659			20,066			(18.3	%)		538			16,385			628			19,120			(14.3	%)
	30.2	%		30.2	%		31.6	%		31.6	%					30.2	%		30.2	%		28.2	%		28.2	%
Other comprehensive income (loss)	110			3,325			47			1,422			133.9	%		110			3,325			14			429			674.4	%
Total comprehensive income (loss)	648			19,710			706			21,488			(8.3	%)		648			19,710			642			19,549			0.8	%
Net income attributable to:
Shareholders of the parent	532			16,183			651			19,808			(18.3	%)		532			16,183			626			19,068			(15.1	%)
Non-controlling interests	6			202			8			258			(21.9	%)		6			202			2			52			287.1	%
Comprehensive income (loss) attributable to:
Shareholders of the parent	641			19,508			697			21,229			(8.1	%)		641			19,508			641			19,497			0.1	%
Non-controlling interests	7			202			9			259			(21.9	%)		7			202			1			52			287.7	%
Earnings per share-basic	0.043			1.31			0.053			1.61						0.043			1.31			0.051			1.54
Earnings per ADS (2)	0.215			6.55			0.264			8.05						0.215			6.55			0.253			7.70
Weighted average number of shares outstanding (in millions)				12,349						12,283									12,349						12,349
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2023 exchange rate of NT $30.44 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$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
	For the Three-Month Period Ended									For the Three-Month Period Ended
	March 31, 2023									March 31, 2023
	US$			NT$			%			US$			NT$			%
Operating revenues	1,781			54,209			100.0	%		1,781			54,209			100.0	%
Operating costs	(1,149	)		(34,985	)		(64.5	%)		(1,149	)		(34,985	)		(64.5	%)
Gross profit	632			19,224			35.5	%		632			19,224			35.5	%
Operating expenses
- Sales and marketing expenses	(31	)		(950	)		(1.8	%)		(31	)		(950	)		(1.8	%)
- General and administrative expenses	(69	)		(2,102	)		(3.9	%)		(69	)		(2,102	)		(3.9	%)
- Research and development expenses	(91	)		(2,767	)		(5.1	%)		(91	)		(2,767	)		(5.1	%)
- Expected credit impairment gain	1			39			0.1	%		1			39			0.1	%
Subtotal	(190	)		(5,780	)		(10.7	%)		(190	)		(5,780	)		(10.7	%)
Net other operating income and expenses	34			1,037			1.9	%		34			1,037			1.9	%
Operating income	476			14,481			26.7	%		476			14,481			26.7	%
Net non-operating income and expenses	152			4,647			8.6	%		152			4,647			8.6	%
Income from continuing operations before income tax	628			19,128			35.3	%		628			19,128			35.3	%
Income tax expense	(90	)		(2,743	)		(5.1	%)		(90	)		(2,743	)		(5.1	%)
Net income	538			16,385			30.2	%		538			16,385			30.2	%
Other comprehensive income (loss)	110			3,325			6.2	%		110			3,325			6.2	%
Total comprehensive income (loss)	648			19,710			36.4	%		648			19,710			36.4	%
Net income attributable to:
Shareholders of the parent	532			16,183			29.9	%		532			16,183			29.9	%
Non-controlling interests	6			202			0.3	%		6			202			0.3	%
Comprehensive income (loss) attributable to:
Shareholders of the parent	641			19,508			36.0	%		641			19,508			36.0	%
Non-controlling interests	7			202			0.4	%		7			202			0.4	%
Earnings per share-basic	0.043			1.31						0.043			1.31
Earnings per ADS (2)	0.215			6.55						0.215			6.55
Weighted average number of shares outstanding (in millions)				12,349									12,349
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2023 exchange rate of NT $30.44 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Three-Month Period Ended March 31, 2023
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	US$			NT$
Cash flows from operating activities :
Net income before tax	628			19,128
Depreciation & Amortization	325			9,903
Share of profit of associates and joint ventures	(107	)		(3,248	)
Income tax paid	(96	)		(2,936	)
Changes in working capital & others	136			4,117
Net cash provided by operating activities	886			26,964
Cash flows from investing activities :
Decrease in financial assets measured at amortized cost	20			598
Acquisition of property, plant and equipment	(978	)		(29,756	)
Acquisition of intangible assets	(17	)		(528	)
Others	3			100
Net cash used in investing activities	(972	)		(29,586	)
Cash flows from financing activities :
Increase in short-term loans	3			100
Proceeds from long-term loans	0			5
Repayments of long-term loans	(19	)		(590	)
Increase in guarantee deposits	65			1,991
Others	(5	)		(159	)
Net cash provided by financing activities	44			1,347
Effect of exchange rate changes on cash and cash equivalents	(23	)		(710	)
Net decrease in cash and cash equivalents	(65	)		(1,985	)
Cash and cash equivalents at beginning of period	5,710			173,819
Cash and cash equivalents at end of period	5,645			171,834
Note: New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2023 exchange rate of NT $30.44 per U.S. Dollar.

^{______________________________}

¹Unless 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 March 31, 2023, the three-month period ending December 31, 2022, and the equivalent three-month period that ended March 31, 2022. For all 1Q23 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the March 31, 2023 exchange rate of NT$ 30.44 per U.S. Dollar.

² Revenue in this section represents wafer sales

³ Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230426005499/en/

Michael Lin / David Wong

UMC, Investor Relations

+ 886-2-2658-9168, ext. 16900

jinhong_lin@umc.com

david_wong@umc.com

Source: United Microelectronics Corporation

FAQ

What were UMC's Q1 2023 revenue figures?

UMC reported Q1 2023 revenue of NT$54.2 billion, a 20.1% decline QoQ.

How much was UMC's net income in Q1 2023?

The net income attributable to shareholders was NT$16.2 billion in Q1 2023.

What is UMC's outlook for wafer shipments in Q2 2023?

UMC expects wafer shipments to remain flat in Q2 2023.

What dividend has UMC proposed for shareholders?

UMC has proposed a cash dividend of approximately NT$3.60 per share.

How did UMC manage to maintain its gross margin?

UMC's gross margin was maintained at 35.5% due to improved structural profitability and optimized product mix.