United Microelectronics Corporation , a leading global semiconductor foundry, announced its consolidated operating results for the fourth quarter of 2022.
Fourth quarter consolidated revenue was NT$67.84 billion, decreasing 10.0% QoQ from NT$75.39 billion in 3Q22. Compared to a year ago, 4Q22 revenue grew 14.8% YoY from NT$59.10 billion in 4Q21. Consolidated gross margin for 4Q22 was 42.9%. Net income attributable to the shareholders of the parent was NT$19.1 billion, with earnings per ordinary share of NT$1.54.
Jason Wang, co-president of UMC, said, “In the fourth quarter, due to a significant slowdown across most of our end markets and inventory correction in the semiconductor industry, our wafer shipments fell 14.8% QoQ while overall fab utilization rate dropped to 90%. Average selling price increased slightly during the quarter as a result of our ongoing product mix optimization efforts, moderating the decline in revenue.”
“For the full year 2022, UMC’s revenue hit a record high of NT$278.7 billion while operating income exceeded NT$100 billion. Gross margin reached 45%, driven by a more favorable foreign exchange rate, expanding 22/28nm portfolio, and newly added capacity. We had taken advantage of the industry upturn over the past two years to enhance our differentiation in specialty technology offering, improve profitability, and deepen relationships with key customers. Revenue from 22/28nm technologies increased more than 56% YoY, driven by our industry-leading 28nm process for OLED display drivers and image signal processors. Our automotive segment also delivered impressive growth in 2022, increasing 82% YoY to account for approximately 9% of total sales. We expect this segment will continue to be a key growth catalyst in 2023 and beyond, driven by the long-term trend of vehicle electrification and automation. UMC is well positioned to serve the market with our comprehensive portfolio of auto-grade process technologies and facilities certified according to rigorous quality standards, while we continue to build strong partnerships with world-class automotive leaders.”
Co-president Wang commented, “Given the soft global economic outlook for 2023, we expect the current challenging environment to persist through the first quarter as customers’ days of inventory are still higher than normal while order visibility remains low. To manage this period of weakness, the Company is implementing strict cost control measures and deferring certain capital expenditures where possible. In the longer term, we remain positive that UMC’s differentiated specialty technology leadership, geographically diversified capacity offering, and quality and operational excellence will enable the Company to capture demand fueled by continuous digital transformation across industries and be the foundry of choice for leading customers.”
Co-president Wang added, “In 2022, we took solid steps in executing our net zero by 2050 roadmap. As part of our efforts to reduce emissions across the entire value chain, UMC recently introduced a program to empower our suppliers with resources to measure and manage their emissions output. To round out the important progress we made towards our ESG goals this year, we were honored to receive recognition from domestic and international institutions. In the 2022 Dow Jones Sustainability Indices (DJSI), UMC was ranked first in terms of overall sustainability performance among semiconductor foundry peers in the 2022 DJSI, while we were the only semiconductor firm globally to achieve double-A scoring for climate change and water security in CDP’s annual evaluation of corporate environmental action. Sustainability and a company’s long-term success are inextricably linked, and UMC will continue to strive to meet expectations of all of our stakeholders while acting as responsible social and environment stewards.”
Summary of Operating Results
| Operating Results | |||||
| (Amount: NT$ million) | 4Q22 | 3Q22 | QoQ % change | 4Q21 | YoY % change |
| Operating Revenues | 67,836 | 75,392 | (10.0) | 59,100 | 14.8 |
| Gross Profit | 29,124 | 35,664 | (18.3) | 23,103 | 26.1 |
| Operating Expenses | (6,798) | (6,794) | 0.1 | (6,821) | (0.3) |
| Net Other Operating Income and Expenses | 1,311 | 1,287 | 1.9 | 1,334 | (1.7) |
| Operating Income | 23,637 | 30,157 | (21.6) | 17,616 | 34.2 |
| Net Non-Operating Income and Expenses | 889 | 2,189 | (59.4) | 558 | 59.4 |
| Net Income Attributable to Shareholders of the Parent | 19,068 | 26,996 | (29.4) | 15,949 | 19.6 |
| EPS (NT$ per share) | 1.54 | 2.19 | 1.30 | ||
| (US$ per ADS) | 0.251 | 0.357 | 0.212 |
Fourth quarter operating revenues declined by 10.0% sequentially to NT$67.84 billion resulting from the inventory correction within the semi industry which lowered wafer shipments. Revenue contribution from 40nm and below technologies represented 45% of wafer revenue. Gross profit decreased 18.3% QoQ to NT$29.12 billion, or 42.9% of revenue. Operating expenses remained flat at NT$6.80 billion. Net other operating income increased to NT$1.31 billion. Net non-operating income totaled NT$0.89 billion. Net income attributable to shareholders of the parent amounted to NT$19.07 billion.
Earnings per ordinary share for the quarter was NT$1.54. Earnings per ADS was US$0.251. The basic weighted average number of shares outstanding in 4Q22 was 12,348,880,384, compared with 12,305,516,644 shares in 3Q22 and 12,254,114,875 shares in 4Q21. The diluted weighted average number of shares outstanding was 12,684,106,050 in 4Q22, compared with 12,635,661,561 shares in 3Q22 and 12,489,949,678 shares in 4Q21. The fully diluted shares counted on December 31, 2022 were approximately 12,684,106,000.
1Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending December 31, 2022, the three-month period ending September 30, 2022, and the equivalent three-month period that ended December 31, 2021. For all 4Q22 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the December 31, 2022 exchange rate of NT$ 30.70 per U.S. Dollar.
Detailed Financials Section
Operating revenues decreased to NT$67.84 billion. COGS declined 2.6% to NT$38.71 billion, which included 7.5% sequential decrease in depreciation. Gross profit fell 18.3% QoQ to NT$29.12 billion. Operating expenses remained flat at NT$6.80 billion, as Sales & Marketing reduced 10.2% to NT$0.95 billion while R&D was up 3.1% QoQ to NT$3.41 billion, representing 5.0% of revenue. Net other operating income was NT$1.31 billion. In 4Q22, operating income declined 21.6% QoQ to NT$23.64 billion.
| COGS & Expenses | |||||
| (Amount: NT$ million) | 4Q22 | 3Q22 | QoQ % change | 4Q21 | YoY % change |
| Operating Revenues | 67,836 | 75,392 | (10.0) | 59,100 | 14.8 |
| COGS | (38,712) | (39,728) | (2.6) | (35,997) | 7.5 |
| Depreciation | (8,898) | (9,622) | (7.5) | (10,122) | (12.1) |
| Other Mfg. Costs | (29,814) | (30,106) | (1.0) | (25,875) | 15.2 |
| Gross Profit | 29,124 | 35,664 | (18.3) | 23,103 | 26.1 |
| Gross Margin (%) | 42.9% | 47.3% | 39.1% | ||
| Operating Expenses | (6,798) | (6,794) | 0.1 | (6,821) | (0.3) |
| G&A | (2,438) | (2,428) | 0.4 | (2,164) | 12.7 |
| Sales & Marketing | (953) | (1,061) | (10.2) | (1,240) | (23.1) |
| R&D | (3,407) | (3,304) | 3.1 | (3,414) | (0.2) |
| Expected Credit Impairment Loss | (0) | (1) | (48.5) | (3) | (88.3) |
| Net Other Operating Income & Expenses | 1,311 | 1,287 | 1.9 | 1,334 | (1.7) |
| Operating Income | 23,637 | 30,157 | (21.6) | 17,616 | 34.2 |
Net non-operating income in 4Q22 was NT$0.89 billion, primarily reflecting the NT$1.38 billion in net investment gain and the NT$0.58 billion in net interest income partially offset by the NT$1.06 billion in exchange loss.
| Non-Operating Income and Expenses | |||
| (Amount: NT$ million) | 4Q22 | 3Q22 | 4Q21 |
| Non-Operating Income and Expenses | 889 | 2,189 | 558 |
| Net Interest Income and Expenses | 584 | 139 | (343) |
| Net Investment Gain and Loss | 1,382 | 780 | 2,689 |
| Exchange Gain and Loss | (1,057) | 1,293 | 312 |
| Other Gain and Loss | (20) | (23) | (2,100) |
In 4Q22, cash inflow from operating activities was NT$40.96 billion. Cash outflow from investing activities amounted to NT$36.05 billion, which included NT$36.32 billion in capital expenditure, resulting in free cash flow of NT$4.63 billion. Cash outflow from financing was NT$9.19 billion, primarily from a NT$8.08 billion in bank loans and a NT$2.54 billion in redemption of bonds. Net cash outflow in 4Q22 totaled NT$6.83 billion. Over the next 12 months, the company expects to repay NT$ 2.49 billion in bank loans.
| Cash Flow Summary | ||
| (Amount: NT$ million) | For the 3-Month Period EndedDec. 31, 2022 | For the 3-Month Period EndedSep.30, 2022 |
| Cash Flow from Operating Activities | 40,956 | 39,696 |
| Net income before tax | 24,526 | 32,346 |
| Depreciation & Amortization | 10,477 | 11,195 |
| Share of profit of associates and joint ventures | (1,705) | (328) |
| Income tax paid | (385) | (652) |
| Changes in working capital & others | 8,043 | (2,865) |
| Cash Flow from Investing Activities | (36,045) | (21,419) |
| Decrease in financial assets measured at amortized cost | 9 | 2,070 |
| Acquisition of PP&E | (35,951) | (22,466) |
| Acquisition of intangible assets | (440) | (1,080) |
| Others | 337 | 57 |
| Cash Flow from Financing Activities | (9,185) | (26,688) |
| Bank loans | (8,082) | (473) |
| Redemption of bonds | (2,542) | (1,031) |
| Increase (decrease) in deposits-in | (389) | 14,441 |
| Cash distributed from additional paid- in capital | – | (37,446) |
| Others | 1,828 | (2,179) |
| Effect of Exchange Rate | (2,556) | 5,337 |
| Net Cash Flow | (6,830) | (3,074) |
| Beginning balance | 180,649 | 183,723 |
| Ending balance | 173,819 | 180,649 |
Cash and cash equivalents slightly decreased to NT$173.82 billion. Days of inventory increased by 6 days to 72 days.
| Current Assets | |||
| (Amount: NT$ billion) | 4Q22 | 3Q22 | 4Q21 |
| Cash and Cash Equivalents | 173.82 | 180.65 | 132.62 |
| Accounts Receivable | 36.98 | 44.84 | 35.19 |
| Days Sales Outstanding | 55 | 53 | 53 |
| Inventories, net | 31.07 | 30.10 | 23.01 |
| Days of Inventory | 72 | 66 | 59 |
| Total Current Assets | 252.37 | 266.95 | 233.27 |
Current liabilities slightly increased to NT$108.57 billion. Long-term credit/bonds decreased to NT$39.88 billion. Total liabilities decreased to NT$197.60 billion, leading to a debt to equity ratio of 59%.
| Liabilities | |||
| (Amount: NT$ billion) | 4Q22 | 3Q22 | 4Q21 |
| Total Current Liabilities | 108.57 | 108.01 | 105.45 |
| Accounts Payable | 8.98 | 10.04 | 8.36 |
| Short-Term Credit / Bonds | 7.59 | 12.19 | 39.26 |
| Payables on Equipment | 18.63 | 19.40 | 7.88 |
| Other | 73.37 | 66.38 | 49.95 |
| Long-Term Credit / Bonds | 39.88 | 46.15 | 39.83 |
| Long-Term Investment Liabilities | 4.22 | 4.26 | 8.25 |
| Total Liabilities | 197.60 | 204.21 | 183.22 |
| Debt to Equity | 59% | 65% | 65% |
Analysis of Revenue
Revenue from Asia-Pacific declined to 54% while business from North America was 30% of sales. Business from Europe was 9% while contribution from Japan increased to 7%.
| Revenue Breakdown by Region | |||||
| Region | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| North America | 30% | 23% | 22% | 22% | 21% |
| Asia Pacific | 54% | 62% | 65% | 64% | 66% |
| Europe | 9% | 9% | 8% | 8% | 7% |
| Japan | 7% | 6% | 5% | 6% | 6% |
Revenue contribution from 22/28nm grew to 28% of the wafer revenue, while 40nm contribution was 17% of sales.
| Revenue Breakdown by Geometry | |||||
| Geometry | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| 14nm and below | 0% | 0% | 0% | 0% | 0% |
| 14nm<x<=28nm | 28% | 25% | 22% | 20% | 20% |
| 28nm<x<=40nm | 17% | 17% | 18% | 18% | 18% |
| 40nm<x<=65nm | 17% | 18% | 19% | 19% | 19% |
| 65nm<x<=90nm | 9% | 8% | 7% | 8% | 8% |
| 90nm<x<=0.13um | 12% | 12% | 12% | 12% | 12% |
| 0.13um<x<=0.18um | 10% | 10% | 12% | 13% | 13% |
| 0.18um<x<=0.35um | 5% | 8% | 8% | 7% | 7% |
| 0.5um and above | 2% | 2% | 2% | 3% | 3% |
Revenue from fabless customers accounted for 81% of revenue.
| Revenue Breakdown by Customer Type | |||||
| Customer Type | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Fabless | 81% | 83% | 86% | 87% | 86% |
| IDM | 19% | 17% | 14% | 13% | 14% |
Revenue from the communication segment represented 45%, while business from computer applications decreased to 12%. Business from consumer applications was 25% as other segments increased to 18% of revenue.
| Revenue Breakdown by Application (1) | |||||
| Application | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 |
| Computer | 12% | 14% | 16% | 17% | 17% |
| Communication | 45% | 45% | 45% | 45% | 46% |
| Consumer | 25% | 27% | 27% | 26% | 26% |
| Others | 18% | 14% | 12% | 12% | 11% |
(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.
2 Revenue in this section represents wafer sales
Shipment and Utilization Rate3
Wafer shipments decreased 14.8% QoQ to 2,213K in the fourth quarter, while quarterly capacity was 2,543K. Overall utilization rate in 4Q22 declined to 90%.
| Wafer Shipments | |||||
| 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 | |
| Wafer Shipments (8” K equivalents) | 2,213 | 2,597 | 2,622 | 2,513 | 2,546 |
| Quarterly Capacity Utilization Rate | |||||
| 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 | |
| Utilization Rate | 90% | 100%+ | 100%+ | 100%+ | 100%+ |
| Total Capacity (8” K equivalents) | 2,543 | 2,539 | 2,528 | 2,420 | 2,419 |
3Utilization Rate = Quarterly Wafer Out / Quarterly Capacity
Capacity4
Total capacity in the fourth quarter increased to 2,543K 8-inch equivalent wafers. Capacity will decline in the first quarter of 2023 to 2,522K 8-inch equivalent wafers, reflecting the annual production maintenance across 8” and 12” facilities.
| Annual Capacity inthousands of wafers | ||||||
| FAB | Geometry (um) | 2022 | 2021 | 2020 | 2019 | |
| WTK | 6″ | 5 – 0.15 | 335 | 329 | 371 | 370 |
| 8A | 8″ | 3 – 0.11 | 765 | 755 | 802 | 825 |
| 8C | 8″ | 0.35 – 0.11 | 459 | 459 | 452 | 436 |
| 8D | 8″ | 0.18 – 0.09 | 410 | 380 | 371 | 359 |
| 8E | 8″ | 0.6 – 0.14 | 469 | 457 | 449 | 426 |
| 8F | 8″ | 0.18 – 0.11 | 550 | 514 | 485 | 434 |
| 8S | 8″ | 0.18 – 0.11 | 443 | 408 | 373 | 372 |
| 8N | 8″ | 0.5 – 0.11 | 952 | 917 | 917 | 831 |
| 12A | 12″ | 0.13 – 0.014 | 1,170 | 1,070 | 1,044 | 997 |
| 12i | 12″ | 0.13 – 0.040 | 655 | 641 | 628 | 595 |
| 12X | 12″ | 0.080 – 0.022 | 314 | 284 | 217 | 203 |
| 12M | 12″ | 0.13 – 0.040 | 436 | 395 | 391 | 98 |
| Total(1) | 10,031 | 9,453 | 9,188 | 8,148 | ||
| YoY Growth Rate | 6% | 3% | 13% | 6% |
| Quarterly Capacity inthousands of wafers | |||||
| FAB | 1Q23E | 4Q22 | 3Q22 | 2Q22 | |
| WTK | 6″ | 80 | 85 | 85 | 84 |
| 8A | 8″ | 189 | 192 | 192 | 192 |
| 8C | 8″ | 113 | 115 | 115 | 115 |
| 8D | 8″ | 101 | 103 | 103 | 103 |
| 8E | 8″ | 116 | 118 | 118 | 118 |
| 8F | 8″ | 136 | 138 | 138 | 138 |
| 8S | 8″ | 109 | 111 | 111 | 111 |
| 8N | 8″ | 244 | 245 | 242 | 235 |
| 12A | 12″ | 305 | 301 | 301 | 301 |
| 12i | 12″ | 162 | 164 | 164 | 164 |
| 12X | 12″ | 78 | 80 | 80 | 78 |
| 12M | 12″ | 108 | 110 | 110 | 110 |
| Total | 2,522 | 2,543 | 2,539 | 2,528 |
(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 4Q22 totaled US$1,167 million as 2022 CAPEX amounted to US$2.7 billion. 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 |
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.
Brief Summary of Full Year 2022 Consolidated Results
- Consolidated revenue in NTD increased 30.8% YoY to NT$278.71 billion, from NT$213.01 billion in 2021.
- Gross profit increased 74.6%, compared to a year ago, representing 45.1% of 2022 revenue.
- Operating income grew 101.8% year on year, accounting for 37.4% of 2022 revenue.
- Net income attributable to shareholders of the parent increased 56.3% to NT$87.20 billion in 2022.
- EPS was NT$7.09, or EPADS of US$1.155 for 2022.
- 22/28nm revenue grew 56% compared to 2021, as contribution from 28nm technologies and below accounted for 24% in 2022.
| Operating Results | |||
| (Amount: NT$ million) | 2022 | 2021 | YoY % change |
| Operating Revenues | 278,705 | 213,011 | 30.8 |
| Gross Profit | 125,764 | 72,050 | 74.6 |
| Operating Expenses | (26,812) | (25,590) | 4.8 |
| Net Other Operating Income and Expenses | 5,340 | 5,226 | 2.2 |
| Operating Income | 104,292 | 51,686 | 101.8 |
| Net Non-Operating Income and Expenses | 1,805 | 10,117 | (82.2) |
| Income Tax Expense | (18,079) | (6,691) | 170.2 |
| Net Income Attributable to Shareholders of the Parent | 87,198 | 55,780 | 56.3 |
| EPS (NT$ per share) | 7.09 | 4.57 | |
| (US$ per ADS) | 1.155 | 0.744 |
Annual Sales Breakdown in Revenue for Foundry Segment
| Region | 2022 | 2021 |
| North America | 24% | 22% |
| Asia Pacific | 61% | 65% |
| Europe | 9% | 7% |
| Japan | 6% | 6% |
| Technology | 2022 | 2021 |
| 14nm and below | 0% | 0% |
| 14nm<x<=28nm | 24% | 20% |
| 28nm<x<=40nm | 18% | 18% |
| 40nm<x<=65nm | 18% | 19% |
| 65nm<x<=90nm | 8% | 8% |
| 90nm<x<=0.13um | 12% | 12% |
| 0.13um<x<=0.18um | 11% | 13% |
| 0.18um<x<=0.35um | 7% | 8% |
| 0.5um and above | 2% | 2% |
| Customer Type | 2022 | 2021 |
| Fabless | 84% | 85% |
| IDM | 16% | 15% |
| Application | 2022 | 2021 |
| Computer | 15% | 17% |
| Communication | 45% | 46% |
| Consumer | 26% | 27% |
| Others | 14% | 10% |
