UMC Reports Third Quarter 2022 Results

Rhea-AI Summary

United Microelectronics Corporation (UMC) reported impressive financial results for 3Q22, with revenues reaching NT$75.39 billion (US$2.38 billion), a 4.6% increase QoQ and a 34.9% rise YoY. The gross margin stood at 47.3%, while net income attributable to shareholders was NT$27 billion (US$851 million), translating to NT$2.19 earnings per share. The company noted a 100%+ capacity utilization rate and that 25% of revenue came from 22/28nm technologies. However, executives warned of potential demand weakness due to inflationary pressures and market corrections.

Positive

• Revenues increased to NT$75.39 billion, a 34.9% YoY growth.
• Gross margin improved to 47.3%.
• Operating income doubled YoY to NT$30.16 billion.
• Net income attributable to shareholders rose 26.6% QoQ.
• Capacity utilization remained at 100%+.

Negative

• Expected demand weaknesses amid inflation and geopolitical tensions.
• Inventory corrections anticipated affecting the industry.

3Q22 operating income doubles YoY; 22/28 revenue contribution reaches 25%

Third Quarter 2022 Overview¹:

• Revenue: NT$75.39 billion (US$2.38 billion)
• Gross margin: 47.3%; Operating margin: 40.0%
• Revenue from 22/28nm: 25%
• Capacity utilization rate: 100%+
• Net income attributable to shareholders of the parent: NT$27 billion (US$851 million)
• Earnings per share: NT$2.19; earnings per ADS: US$0.345

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 third quarter of 2022.

Third quarter consolidated revenue was NT$75.39 billion, increasing 4.6% QoQ from NT$72.06 billion in 2Q22. Compared to a year ago, 3Q22 revenue grew 34.9% YoY from NT$55.91 billion in 3Q21. Consolidated gross margin for 3Q22 reached 47.3%. Net income attributable to the shareholders of the parent was NT$27 billion, with earnings per ordinary share of NT$2.19.

Jason Wang, co-president of UMC, said, “In the third quarter, our results benefited from product mix optimization and a more favorable exchange rate, while fab capacity remained fully utilized. Despite softening demand in consumer end markets, strengths in certain wireless communications areas drove further expansion in our 22/28nm business, which accounted for 25% of overall third-quarter revenue and lifted wafer average selling price. We believe our industry-leading position in OLED display driver ICs will continue to drive growth for our 22/28nm technologies amid growing adoption of OLED panels in smartphones and other end devices. We also saw sustained momentum in our automotive business during the quarter, and we intend to pursue more collaboration opportunities with existing and potential automotive customers.”

Co-president Wang said, “Moving into the fourth quarter, we expect to face headwinds amid demand weakness, impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust to current market conditions. At the same time, we will continue to deliver differentiated technology processes to enable customers’ product pipelines. We have revised the company’s 2022 capital expenditure down to US$3 billion, but our capacity expansions in Tainan and Singapore are still progressing as planned in order to meet long-term supply commitments. Despite near-term turbulences, the structural story of increasing silicon content driven by the rise of 5G, AIoT, and EV remains intact. With our comprehensive technology offering, focus on manufacturing excellence, and resilient financial structure, UMC will further increase our exposure to strong growth markets and consolidate our specialty technology leadership.”

Co-president Wang added, “In terms of corporate sustainability, UMC made steady progress towards our goals across all three areas of ESG. Going into 2023, we will accelerate carbon emissions reduction efforts by proactively seeking ways to lower emissions associated with wafer manufacturing and products footprint, working with partners to address emissions from the value chain, as well as investing in net-zero technologies as we strive for net zero by 2050.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)		3Q22			2Q22			QoQ % change			3Q21			YoY % change
Operating Revenues		75,392			72,055			4.6			55,907			34.9
Gross Profit		35,664			33,472			6.5			20,544			73.6
Operating Expenses		(6,794	)		(6,706	)		1.3			(6,636	)		2.4
Net Other Operating Income and Expenses		1,287			1,398			(8.0	)		1,227			4.9
Operating Income		30,157			28,164			7.1			15,135			99.3
Net Non-Operating Income and Expenses		2,189			(2,586	)		-			4,317			(49.3	)
Net Income Attributable to Shareholders of the Parent		26,996			21,327			26.6			17,460			54.6
EPS (NT$ per share)		2.19			1.74						1.43
(US$ per ADS)		0.345			0.274						0.225

Third quarter operating revenues increased by 4.6% sequentially to NT$75.39 billion which was partially lifted due to a better product mix as well as favorable foreign exchange rate. Revenue contribution from 40nm and below technologies represented 42% of wafer revenue. Gross profit grew 6.5% QoQ to NT$35.66 billion, or 47.3% of revenue. Operating expenses grew 1.3% to NT$6.79 billion. Net other operating income declined to NT$1.29 billion. Net non-operating income totaled NT$2.19 billion. Net income attributable to shareholders of the parent amounted to NT$27 billion.

Earnings per ordinary share for the quarter was NT$2.19. Earnings per ADS was US$0.345. The basic weighted average number of outstanding shares in 3Q22 was 12,305,516,644, compared with 12,283,479,334 shares in 2Q22 and 12,206,292,756 shares in 3Q21. The diluted weighted average number of outstanding shares was 12,635,661,561 in 3Q22, compared with 12,553,373,552 shares in 2Q22 and 12,411,100,649 shares in 3Q21. The fully diluted shares counted on September 30, 2022 were approximately 12,679,025,000.

Detailed Financials Section

Operating revenues increased to NT$75.39 billion. COGS increased 3.0% to NT$39.73 billion, which included 3.9% sequential increase in other manufacturing costs. Gross profit grew 6.5% QoQ to NT$35.66 billion. Operating expenses increased 1.3% QoQ to NT$6.79 billion, as Sales & Marketing grew 15.9% to NT$1.06 billion while R&D was up 3.0% QoQ to NT$3.30 billion, representing 4.4% of revenue. Net other operating income was NT$1.29 billion. In 3Q22, operating income grew 7.1% QoQ to NT$30.16 billion.

COGS & Expenses
(Amount: NT$ million)		3Q22		2Q22		QoQ % change		3Q21		YoY % change
Operating Revenues		75,392		72,055		4.6		55,907		34.9
COGS		(39,728)		(38,583)		3.0		(35,363)		12.3
Depreciation		(9,622)		(9,616)		0.1		(9,900)		(2.8)
Other Mfg. Costs		(30,106)		(28,967)		3.9		(25,463)		18.2
Gross Profit		35,664		33,472		6.5		20,544		73.6
Gross Margin (%)		47.3%		46.5%				36.8%
Operating Expenses		(6,794)		(6,706)		1.3		(6,636)		2.4
G&A		(2,428)		(2,579)		(5.9)		(2,119)		14.6
Sales & Marketing		(1,061)		(915)		15.9		(1,212)		(12.5)
R&D		(3,304)		(3,209)		3.0		(3,303)		0.0
Expected Credit Impairment Loss		(1)		(3)		(75.8)		(2)		(68.6)
Net Other Operating Income & Expenses		1,287		1,398		(8.0)		1,227		4.9
Operating Income		30,157		28,164		7.1		15,135		99.3

Net non-operating income in 3Q22 was NT$2.19 billion, primarily reflecting NT$1.29 billion in exchange gain and a NT$0.78 billion in net investment gain.

Non-Operating Income and Expenses
(Amount: NT$ million)		3Q22		2Q22		3Q21
Non-Operating Income and Expenses		2,189		(2,586)		4,317
Net Interest Income and Expenses		139		(163)		(367)
Net Investment Gain and Loss		780		(3,675)		4,534
Exchange Gain and Loss		1,293		1,361		164
Other Gain and Loss		(23)		(109)		(14)

In 3Q22, cash inflow from operating activities was NT$39.70 billion. Cash outflow from investing activities amounted to NT$21.42 billion, which included NT$23.13 billion in capital expenditure, resulting in free cash flow of NT$16.56 billion. Cash outflow from financing reached NT$26.69 billion, primarily from a NT$37.45 billion payment as cash distributed from additional paid- in capital partially offset by a NT$14.44 billion from the increase in deposits-in. Net cash outflow in 3Q22 totaled NT$3.07 billion. Over the next 12 months, the company expects to repay NT$ 4.43 billion in bank loans.

Cash Flow Summary
(Amount: NT$ million)		For the 3-Month Period Ended Sep.30, 2022			For the 3-Month Period Ended Jun. 30, 2022
Cash Flow from Operating Activities		39,696			35,091
Net income before tax		32,346			25,578
Depreciation & Amortization		11,195			11,107
Share of loss (profit) of associates and joint ventures		(328	)		2,027
Income tax paid		(652	)		(2,913	)
Changes in working capital & others		(2,865	)		(708	)
Cash Flow from Investing Activities		(21,419	)		(11,716	)
Decrease in financial assets measured at amortized cost		2,070			103
Acquisition of PP&E		(22,466	)		(10,907	)
Acquisition of intangible assets		(1,080	)		(815	)
Others		57			(97	)
Cash Flow from Financing Activities		(26,688	)		(13,423	)
Bank loans		(473	)		(11,615	)
Redemption of bonds		(1,031	)		(2,484	)
Increase in deposits-in		14,441			864
Cash distributed from additional paid- in capital		(37,446	)		-
Others		(2,179	)		(188	)
Effect of Exchange Rate		5,337			1,601
Net Cash Flow		(3,074	)		11,553
Beginning balance		183,723			172,170
Ending balance		180,649			183,723

Cash and cash equivalents slightly decreased to NT$180.65 billion. Days of inventory increased by 4 days to 66 days.

Current Assets
(Amount: NT$ billion)		3Q22		2Q22		3Q21
Cash and Cash Equivalents		180.65		183.72		113.11
Notes & Accounts Receivable		44.84		42.88		32.99
Days Sales Outstanding		53		51		51
Inventories, net		30.10		27.34		23.15
Days of Inventory		66		62		59
Total Current Assets		266.95		265.78		211.60

Current liabilities decreased to NT$108.01 billion, mainly from the reduction of in other as company distributed cash from additional paid-in capital to shareholders during Q3. Long-term credit/bonds increased to NT$46.15 billion. Total liabilities decreased to NT$204.21 billion, leading to a debt to equity ratio of 65%.

Liabilities
(Amount: NT$ billion)		3Q22		2Q22				3Q21
Total Current Liabilities		108.01			131.81			84.55
Notes & Accounts Payable		10.04			9.95			8.26
Short-Term Credit / Bonds		12.19			13.22			24.26
Payables on Equipment		19.40			11.60			6.72
Other		66.38			97.04			45.31
Long-Term Credit / Bonds		46.15			45.70			51.09
Long-Term Investment Liabilities		4.26			8.50			8.14
Total Liabilities		204.21			216.51			171.19
Debt to Equity		65	%		76	%		66	%

Analysis of Revenue²

Revenue from Asia-Pacific declined to 62% while business from North America was 23% of sales. Business from Europe was 9% while contribution from Japan increased to 6%.

Revenue Breakdown by Region
Region		3Q22			2Q22			1Q22			4Q21			3Q21
North America		23	%		22	%		22	%		21	%		22	%
Asia Pacific		62	%		65	%		64	%		66	%		65	%
Europe		9	%		8	%		8	%		7	%		7	%
Japan		6	%		5	%		6	%		6	%		6	%

Revenue contribution from 22/28nm grew to 25% of the wafer revenue, while 40nm contribution was 17% of sales.

Revenue Breakdown by Geometry
Geometry		3Q22			2Q22			1Q22			4Q21			3Q21
14nm and below		0	%		0	%		0	%		0	%		0	%
14nm<x<=28nm		25	%		22	%		20	%		20	%		19	%
28nm<x<=40nm		17	%		18	%		18	%		18	%		18	%
40nm<x<=65nm		18	%		19	%		19	%		19	%		19	%
65nm<x<=90nm		8	%		7	%		8	%		8	%		8	%
90nm<x<=0.13um		12	%		12	%		12	%		12	%		12	%
0.13um<x<=0.18um		10	%		12	%		13	%		13	%		13	%
0.18um<x<=0.35um		8	%		8	%		7	%		7	%		8	%
0.5um and above		2	%		2	%		3	%		3	%		3	%

Revenue from fabless customers accounted for 83% of revenue.

Revenue Breakdown by Customer Type
Customer Type		3Q22			2Q22			1Q22			4Q21			3Q21
Fabless		83	%		86	%		87	%		86	%		86	%
IDM		17	%		14	%		13	%		14	%		14	%

Revenue from the communication segment represented 45%, while business from computer applications decreased to 14%. Business from consumer applications was 27% as other segments increased to 14% of revenue.

Revenue Breakdown by Application (1)
Application		3Q22			2Q22			1Q22			4Q21			3Q21
Computer		14	%		16	%		17	%		17	%		17	%
Communication		45	%		45	%		45	%		46	%		46	%
Consumer		27	%		27	%		26	%		26	%		27	%
Others		14	%		12	%		12	%		11	%		10	%

(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 in 3Q22.

(To view blended ASP trend, please click here for 3Q22 ASP)

Shipment and Utilization Rate³

Wafer shipments decreased 1% QoQ to 2,597K in the third quarter, while quarterly capacity grew to 2,539K. Overall utilization rate in 3Q22 remained above 100%.

Wafer Shipments
	3Q22	2Q22	1Q22	4Q21	3Q21
Wafer Shipments (8” K equivalents)	2,597	2,622	2,513	2,546	2,503
Quarterly Capacity Utilization Rate
	3Q22	2Q22	1Q22	4Q21	3Q21
Utilization Rate	100%+	100%+	100%+	100%+	100%+
Total Capacity (8” K equivalents)	2,539	2,528	2,420	2,419	2,383

Capacity⁴

Overall capacity in the third quarter increased to 2,539K 8-inch equivalent wafers. Capacity will grow in the fourth quarter of 2022 to 2,543K 8-inch equivalent wafers, reflecting the capacity expansion taking place at 8N.

Annual Capacity in thousands of wafers														Quarterly Capacity in thousands of wafers
FAB		Geometry (um)		2021		2020		2019		2018				FAB			4Q22E		3Q22		2Q22		1Q22
WTK	6"		5 – 0.15		329		371		370		396			WTK		6"		85		85		84		82
8A	8"		3 – 0.11		755		802		825		825			8A		8"		192		192		192		189
8C	8"		0.35 – 0.11		459		452		436		383			8C		8"		115		115		115		113
8D	8"		0.18 – 0.09		380		371		359		347			8D		8"		103		103		103		101
8E	8"		0.6 – 0.14		457		449		426		418			8E		8"		118		118		118		116
8F	8"		0.18 – 0.11		514		485		434		431			8F		8"		138		138		138		136
8S	8"		0.18 – 0.11		408		373		372		372			8S		8"		111		111		111		109
8N	8"		0.5 – 0.11		917		917		831		771			8N		8"		245		242		235		231
12A	12"		0.13 – 0.014		1,070		1,044		997		997			12A		12"		301		301		301		267
12i	12"		0.13 – 0.040		641		628		595		555			12i		12"		164		164		164		162
12X	12"		0.080 – 0.022		284		217		203		183			12X		12"		80		80		78		77
12M	12"		0.13 – 0.040		395		391		98		-			12M		12"		110		110		110		108
Total(1)					9,453		9,188		8,148		7,673			Total				2,543		2,539		2,528		2,420
YoY Growth Rate					3%		13%		6%		5%

⁽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 3Q22 totaled US$764 million. 2022 cash-based CAPEX budget will be US$3.0 billion.

Capital Expenditure by Year - in US$ billion
Year	2021		2020		2019		2018		2017
CAPEX		$ 1.8		$ 1.0		$ 0.6		$ 0.7		$ 1.4

2022 CAPEX Plan
8"	12"			Total
10%			90%			US$3.0 billion

Fourth Quarter 2022 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To decrease by approximately 10%
• ASP in USD: To remain flat
• Gross Profit Margin: Will be in the low-40% range
• Capacity Utilization: 90%
• 2022 CAPEX: US$3.0 billion

Recent Developments / Announcements

Aug. 24, 2022		UMC and Cadence Collaborate on Analog/Mixed-Signal Flow for 22ULP/ULL Process Technologies
Sep. 13, 2022		Avalanche Technology and UMC Announce 22nm Production of High-Density MRAM-Based Devices for Aerospace Applications

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

Conference Call / Webcast Announcement

Wednesday, October 26, 2022

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 3Q22 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. The company provides high quality IC production with a focus on both logic and specialty technologies to serve every major sector of the electronics industry. UMC’s comprehensive technology and manufacturing solutions include logic/RF, embedded high voltage, embedded flash, RFSOI/BCD and IATF-16949 automotive manufacturing certification for all its manufacturing facilities. UMC operates 12 fabs that are strategically located throughout Asia with a maximum capacity of approximately 850,000 8-inch equivalent wafers per month. The company employs approximately 20,000 people worldwide, with offices in Taiwan, China, United States, Europe, Japan, Korea and Singapore. For more information, please visit: http://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 third quarter of 2022; 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 “Third Quarter of 2022 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 September 30, 2022
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	September 30, 2022
	US$		NT$		%
Assets
Current assets
Cash and cash equivalents	5,692		180,649		34.8	%
Accounts receivable, net	1,413		44,842		8.6	%
Inventories, net	948		30,102		5.8	%
Other current assets	357		11,352		2.2	%
Total current assets	8,410		266,945		51.4	%
Non-current assets
Funds and investments	1,951		61,938		11.9	%
Property, plant and equipment	4,698		149,119		28.7	%
Right-of-use assets	249		7,903		1.5	%
Other non-current assets	1,056		33,489		6.5	%
Total non-current assets	7,954		252,449		48.6	%
Total assets	16,364		519,394		100.0	%
Liabilities
Current liabilities
Short-term loans	7		217		0.0	%
Payables	2,155		68,415		13.2	%
Current portion of long-term liabilities	377		11,975		2.3	%
Other current liabilities	864		27,402		5.3	%
Total current liabilities	3,403		108,009		20.8	%
Non-current liabilities
Bonds payable	727		23,082		4.4	%
Long-term loans	727		23,063		4.4	%
Lease liabilities, noncurrent	166		5,284		1.0	%
Other non-current liabilities	1,411		44,767		8.7	%
Total non-current liabilities	3,031		96,196		18.5	%
Total liabilities	6,434		204,205		39.3	%
Equity
Equity attributable to the parent company
Capital	3,933		124,821		24.0	%
Additional paid-in capital	336		10,668		2.1	%
Retained earnings and other components of equity	5,649		179,321		34.5	%
Total equity attributable to the parent company	9,918		314,810		60.6	%
Non-controlling interests	12		379		0.1	%
Total equity	9,930		315,189		60.7	%
Total liabilities and equity	16,364		519,394		100.0	%
Note：New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 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, 2022						September 30, 2021						Chg.			September 30, 2022						June 30, 2022						Chg.
	US$			NT$			US$			NT$			%			US$			NT$			US$			NT$			%
Operating revenues	2,375			75,392			1,761			55,907			34.9	%		2,375			75,392			2,270			72,055			4.6	%
Operating costs	(1,251	)		(39,728	)		(1,114	)		(35,363	)		12.3	%		(1,251	)		(39,728	)		(1,215	)		(38,583	)		3.0	%
Gross profit	1,124			35,664			647			20,544			73.6	%		1,124			35,664			1,055			33,472			6.5	%
	47.3	%		47.3	%		36.8	%		36.8	%					47.3	%		47.3	%		46.5	%		46.5	%
Operating expenses
- Sales and marketing expenses	(33	)		(1,061	)		(38	)		(1,212	)		(12.5	%)		(33	)		(1,061	)		(29	)		(915	)		15.9	%
- General and administrative expenses	(77	)		(2,428	)		(67	)		(2,119	)		14.6	%		(77	)		(2,428	)		(82	)		(2,579	)		(5.9	%)
- Research and development expenses	(104	)		(3,304	)		(104	)		(3,303	)		0.0	%		(104	)		(3,304	)		(101	)		(3,209	)		3.0	%
- Expected credit impairment loss	(0	)		(1	)		(0	)		(2	)		(68.6	%)		(0	)		(1	)		(0	)		(3	)		(75.8	%)
Subtotal	(214	)		(6,794	)		(209	)		(6,636	)		2.4	%		(214	)		(6,794	)		(212	)		(6,706	)		1.3	%
Net other operating income and expenses	40			1,287			39			1,227			4.9	%		40			1,287			44			1,398			(8.0	%)
Operating income	950			30,157			477			15,135			99.3	%		950			30,157			887			28,164			7.1	%
	40.0	%		40.0	%		27.1	%		27.1	%					40.0	%		40.0	%		39.1	%		39.1	%
Net non-operating income and expenses	69			2,189			136			4,317			(49.3	%)		69			2,189			(81	)		(2,586	)		-
Income from continuing operations    before income tax	1,019			32,346			613			19,452			66.3	%		1,019			32,346			806			25,578			26.5	%
	42.9	%		42.9	%		34.8	%		34.8	%					42.9	%		42.9	%		35.5	%		35.5	%
Income tax expense	(158	)		(5,004	)		(66	)		(2,100	)		138.3	%		(158	)		(5,004	)		(129	)		(4,088	)		22.4	%
Net income	861			27,342			547			17,352			57.6	%		861			27,342			677			21,490			27.2	%
	36.3	%		36.3	%		31.0	%		31.0	%					36.3	%		36.3	%		29.8	%		29.8	%
Other comprehensive income (loss)	137			4,336			(12	)		(370	)		-			137			4,336			(118	)		(3,749	)		-
Total comprehensive income (loss)	998			31,678			535			16,982			86.5	%		998			31,678			559			17,741			78.6	%
Net income attributable to:
Shareholders of the parent	851			26,996			550			17,460			54.6	%		851			26,996			672			21,327			26.6	%
Non-controlling interests	10			346			(3	)		(108	)		-			10			346			5			163			111.6	%
Comprehensive income (loss) attributable to:
Shareholders of the parent	987			31,332			538			17,090			83.3	%		987			31,332			554			17,578			78.2	%
Non-controlling interests	11			346			(3	)		(108	)		-			11			346			5			163			111.6	%
Earnings per share-basic	0.069			2.19			0.045			1.43						0.069			2.19			0.055			1.74
Earnings per ADS (2)	0.345			10.95			0.225			7.15						0.345			10.95			0.274			8.70
Weighted average number of shares
outstanding (in millions)				12,306						12,206									12,306						12,283
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 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 Nine-Month Period Ended
	September 30, 2022									September 30, 2022
	US$			NT$			%			US$			NT$			%
Operating revenues	2,375			75,392			100.0	%		6,644			210,870			100.0	%
Operating costs	(1,251	)		(39,728	)		(52.7	%)		(3,599	)		(114,230	)		(54.2	%)
Gross profit	1,124			35,664			47.3	%		3,045			96,640			45.8	%
Operating expenses
- Sales and marketing expenses	(33	)		(1,061	)		(1.4	%)		(102	)		(3,230	)		(1.5	%)
- General and administrative expenses	(77	)		(2,428	)		(3.2	%)		(228	)		(7,235	)		(3.4	%)
- Research and development expenses	(104	)		(3,304	)		(4.4	%)		(301	)		(9,547	)		(4.5	%)
- Expected credit impairment loss	(0	)		(1	)		(0.0	%)		(0	)		(2	)		(0.0	%)
Subtotal	(214	)		(6,794	)		(9.0	%)		(631	)		(20,014	)		(9.4	%)
Net other operating income and expenses	40			1,287			1.7	%		127			4,029			1.9	%
Operating income	950			30,157			40.0	%		2,541			80,655			38.3	%
Net non-operating income and expenses	69			2,189			2.9	%		29			916			0.4	%
Income from continuing operations    before income tax	1,019			32,346			42.9	%		2,570			81,571			38.7	%
Income tax expense	(158	)		(5,004	)		(6.6	%)		(399	)		(12,673	)		(6.0	%)
Net income	861			27,342			36.3	%		2,171			68,898			32.7	%
Other comprehensive income (loss)	137			4,336			5.7	%		63			2,009			0.9	%
Total comprehensive income (loss)	998			31,678			42.0	%		2,234			70,907			33.6	%
Net income attributable to:
Shareholders of the parent	851			26,996			35.8	%		2,147			68,131			32.3	%
Non-controlling interests	10			346			0.5	%		24			767			0.4	%
Comprehensive income (loss) attributable to:
Shareholders of the parent	987			31,332			41.6	%		2,210			70,139			33.3	%
Non-controlling interests	11			346			0.4	%		24			768			0.3	%
Earnings per share-basic	0.069			2.19						0.175			5.54
Earnings per ADS (2)	0.345			10.95						0.873			27.70
Weighted average number of shares    outstanding (in millions)				12,306									12,291
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 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, 2022
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	US$			NT$
Cash flows from operating activities :
Net income before tax	2,570			81,571
Depreciation & Amortization	1,061			33,692
Share of loss of associates and joint ventures	112			3,557
Income tax paid	(137	)		(4,333	)
Changes in working capital & others	(301	)		(9,582	)
Net cash provided by operating activities	3,305			104,905
Cash flows from investing activities :
Decrease in financial assets measured at amortized cost	898			28,488
Acquisition of property, plant and equipment	(1,392	)		(44,176	)
Acquisition of intangible assets	(73	)		(2,316	)
Others	(12	)		(379	)
Net cash used in investing activities	(579	)		(18,383	)
Cash flows from financing activities :
Decrease in short-term loans	(55	)		(1,759	)
Redemption of bonds	(339	)		(10,763	)
Proceeds from long-term loans	22			710
Repayments of long-term loans	(367	)		(11,650	)
Increase in guarantee deposits	484			15,374
Cash distributed from additional paid-in capital	(1,180	)		(37,446	)
Others	(79	)		(2,535	)
Net cash used in financing activities	(1,514	)		(48,069	)
Effect of exchange rate changes on cash and cash equivalents	302			9,574
Net increase in cash and cash equivalents	1,514			48,027
Cash and cash equivalents at beginning of period	4,178			132,622
Cash and cash equivalents at end of period	5,692			180,649
Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2022 exchange rate of NT $31.74 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 September 30, 2022, the three-month period ending June 30, 2022, and the equivalent three-month period that ended September 30, 2021. For all 3Q22 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2022 exchange rate of NT$ 31.74 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/20221026005486/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 are UMC's 3Q22 financial highlights?

In 3Q22, UMC reported NT$75.39 billion in revenue, a 34.9% YoY increase, with a gross margin of 47.3% and net income of NT$27 billion.

How did UMC perform compared to 2Q22?

UMC's revenue rose by 4.6% from NT$72.06 billion in 2Q22.

What percentage of UMC's revenue came from 22/28nm technologies?

Revenue from 22/28nm technologies made up 25% of UMC's overall revenue in 3Q22.

What challenges does UMC anticipate for the fourth quarter?

UMC expects demand weakness due to inflation and geopolitical issues, which may affect inventory levels.

What was UMC's earnings per share for 3Q22?

Earnings per share for 3Q22 were NT$2.19 (US$0.345).