Business Wire | Oct 29, 2020 05:21AM EDT

UMC Reports Third Quarter 2020 Results

Oct. 29, 2020

TAIPEI, Taiwan--(BUSINESS WIRE)--Oct. 29, 2020--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 2020.

Third quarter consolidated revenue was NT$44.87 billion, compared to NT$44.39 billion in 2Q20 and up 18.9% YoY from NT$37.74 billion in 3Q19. Consolidated gross margin for 3Q20 was 21.8%. Net income attributable to the stockholders of the parent was NT$9.11 billion, with earnings per ordinary share of NT$0.75.

Jason Wang, co-president of UMC, said, "During the third quarter, consolidated operating margin reached 15.9%, while utilization rate remained firm at 97%. Wafer shipments reached 2.25 million 8-inch equivalent wafers. During Q3, work-from-home and home schooling trends continued to contribute to stable end market demand for applications in wireless connectivity, power management ICs used in smartphones as well as high speed interface I/O controllers found in computing devices. In addition to demand stability across various end markets, our 28nm revenue grew QoQ as customer product tape outs continued throughout the quarter. Moving forward, we expect to see a sustained increase in the number of 28nm tape outs, which will further diversify our 28nm exposure to end markets and customers."

Co-president Wang continued, "Looking into the fourth quarter, demand from consumer and computer related applications will lead to a minor increase in wafer shipments, propelled by ongoing work-from-home initiatives and home schooling. Furthermore, we have seen an uptick in semiconductor demand due to more silicon content in particular applications such as newly deployed 5G smartphones, IoT devices and other consumer products. Therefore, the current industry landscape appears to show favorable supply and demand dynamics towards foundry; hence, UMC will pursue a delicate balance in strengthening our customer relationships while securing interests for our shareholders to ensure our long term growth."

Summary of Operating Results

Operating Results

(Amount: NT$ million) 3Q20 2Q20 QoQ % 3Q19 YoY % change change

Operating Revenues 44,870 44,386 1.1 37,738 18.9

Gross Profit 9,769 10,257 (4.8 ) 6,433 51.9

Operating Expenses (5,508 ) (5,677 ) (3.0 ) (5,131 ) 7.4

Net Other Operating Income and 2,872 1,266 126.9 1,207 137.9Expenses

Operating Income 7,133 5,846 22.0 2,509 184.3

Net Non-Operating Income and Expenses 2,074 818 153.4 (532 ) -

Net Income Attributable to 9,106 6,681 36.3 2,929 210.9Stockholders of the Parent

EPS (NT$ per share) 0.75 0.55 0.25

(US$ per ADS) 0.129 0.095 0.043

Operating revenues in 3Q20 remained flat at NT$44.87 billion. Revenue contribution from 40nm and below technologies increased to 37%. Gross profit declined 4.8% QoQ to NT$9.77 billion, or 21.8% of revenue. Operating expenses declined 3.0% to NT$5.51 billion. Net other operating income increased 126.9% to NT$2.87 billion, which included the sale of Nexpower Technology Corporation's manufacturing plant, leading to an operating income of NT$7.13 billion. Net non-operating income was NT$2.07 billion. Net income attributable to stockholders of the parent grew 36.3% QoQ to NT$9.11 billion.

Earnings per ordinary share for the quarter was NT$0.75. Earnings per ADS was US$0.129. The basic weighted average number of outstanding shares in 3Q20 was 12,107,651,452, compared with 12,193,149,897 shares in 2Q20 and 11,708,239,978 shares in 3Q19. The diluted weighted average number of outstanding shares was 12,179,561,492 in 3Q20, compared with 12,262,774,432 shares in 2Q20 and 13,049,025,428 shares in 3Q19. The fully diluted share count as of September 30, 2020 was approximately 12,294,281,000. On September 30, 2020, UMC sold 105 million treasury shares acquired from the 21th share buy-back programs to its employees.

Detailed Financials Section

COGS & Expenses

(Amount: NT$ million) 3Q20 2Q20 QoQ % 3Q19 YoY % change change

Operating Revenues 44,870 44,386 1.1 37,738 18.9

COGS (35,101 ) (34,129 ) 2.8 (31,305 ) 12.1

Depreciation (10,911 ) (10,544 ) 3.5 (10,707 ) 1.9

Other Mfg. Costs (24,190 ) (23,585 ) 2.6 (20,598 ) 17.4

Gross Profit 9,769 10,257 (4.8 ) 6,433 51.9

Gross Margin (%) 21.8 % 23.1 % ? 17.1 % ?

Operating Expenses (5,508 ) (5,677 ) (3.0 ) (5,131 ) 7.4

G&A (1,614 ) (1,537 ) 4.9 (1,344 ) 20.1

Sales & Marketing (1,009 ) (929 ) 8.7 (970 ) 4.1

R&D (3,314 ) (3,203 ) 3.5 (2,813 ) 17.8

Expected CreditImpairment Gain 429 (8 ) - (4 ) -(Loss)

Net Other Operating 2,872 1,266 126.9 1,207 137.9Income & Expenses

Operating Income 7,133 5,846 22.0 2,509 184.3

Operating revenues remained relatively flat at NT$44.87 billion. COGS increased 2.8% QoQ to NT$35.10 billion, which included low single digit increases in both depreciation and other manufacturing costs. Gross profit declined by 4.8% to NT$9.77 billion, partly due to the appreciation of the NT dollar. Operating expenses declined 3% QoQ to NT$5.51 billion, as sales and marketing expenses rose 8.7% QoQ to NT$1.01 billion. G&A expenses grew 4.9% to NT$1.61 billion. R&D expenses increased 3.5% sequentially to NT$3.31 billion, representing 7.4% of 3Q20 operating revenues. Net other operating income increased to NT$2.87 billion. In 3Q20, operating income increased 22.0% QoQ to NT$7.13 billion.

Non-Operating Income and Expenses

(Amount: NT$ million) 3Q20 2Q20 3Q19

Non-Operating Income and Expenses 2,074 818 (532 )

Net Interest Income and Expenses (314 ) (307 ) (503 )

Net Investment Gain and Loss 3,944 1,643 736

Exchange Gain and Loss 259 (411 ) (752 )

Other Gain and Loss (1,815 ) (107 ) (13 )

Net non-operating income in 3Q20 was NT$2.07 billion, mainly resulting from NT$3.94 billion in net investment gain and NT$259 million in exchange gain, which was partly offset by NT$1.82 billion in other losses and NT$314 million in net interest expense.

Cash Flow Summary For the 3-Month For the 3-Month(Amount: NT$ million) Period Ended Period Ended Sep. 30, 2020 Jun. 30, 2020

Cash Flow from Operating Activities 18,538 16,403

Net income before tax 9,207 6,664

Depreciation & Amortization 12,170 12,248

Expected credit impairment (gain) loss (429 ) 8

Share of profit of associates and joint (2,778 ) (914 )ventures

Income tax (paid) received (229 ) 505

Changes in working capital & others 597 (2,108 )

Cash Flow from Investing Activities (5,686 ) (7,877 )

Acquisition of PP&E (6,707 ) (4,270 )

Proceeds from disposal of PP&E 1,720 14

Acquisition of intangible assets (815 ) (448 )

Decrease (increase) in other financial 281 (2,979 )assets

Others (165 ) (194 )

Cash Flow from Financing Activities (13,652 ) (2,947 )

Bank loans (4,716 ) 9,483

Redemption of bonds - (11,203 )

Treasury stock acquired (477 ) (1,201 )

Treasury stock sold to employees 1,678 -

Cash dividends (9,765 ) -

Others (372 ) (26 )

Effect of Exchange Rate (233 ) (873 )

Net Cash Flow (1,033 ) 4,706

Beginning balance 99,872 95,166

Ending balance 98,839 99,872

In 3Q20, cash inflow from operating activities was NT$18.54 billion. Cash outflow from investing activities totaled NT$5.69 billion, which included NT$7.42 billion in capital expenditure, resulting in free cash flow of NT$11.12 billion. Cash outflow from financing activities totaled NT$13.65 billion, primarily from NT$9.77 billion in the distribution of cash dividend and NT$4.72 billion in the repayment of bank loans, offset by NT$1.68 billion in the sale of treasury stock to employees. Net cash outflow in 3Q20 was NT$1.03 billion. Over the next 12 months, the company expects to repay NT$6.83 billion in bank loans.

Current Assets

(Amount: NT$ billion) 3Q20 2Q20 3Q19

Cash and Cash Equivalents 98.84 99.87 86.76

Notes & Accounts Receivable 26.96 27.26 23.41

Days Sales Outstanding 55 57 58

Inventories, net 22.86 23.34 19.99

Days of Inventory 60 61 58

Total Current Assets 163.48 167.96 163.49

Cash and cash equivalents decreased to NT$98.84 billion. Days of inventory decreased to 60 days.

Liabilities

(Amount: NT$ billion) 3Q20 2Q20 3Q19

Total Current Liabilities 59.15 65.11 70.33

Notes & Accounts Payable 7.70 8.56 6.63

Short-Term Credit / Bonds 16.40 17.32 40.08

Payables on Equipment 7.38 3.22 3.00

Dividends Payable - 9.77 -

Other 27.67 26.24 20.62

Long-Term Credit / Bonds 49.46 53.50 55.23

Long-Term Investment Liabilities 20.14 19.69 20.17

Total Liabilities 147.33 158.34 169.00

Debt to Equity 67 % 76 % 82 %

Current liabilities decreased to NT$59.15 billion, mainly from NT$9.77 billion in the payment of cash dividends and NT$0.92 billion from the decline in short-term credit/bonds. Total liabilities declined to NT$147.33 billion, leading to a debt to equity ratio of 67%.

Analysis of Revenue2

Revenue Breakdown by Region

Region 3Q20 2Q20 1Q20 4Q19 3Q19

North America 30 % 31 % 29 % 30 % 33 %

Asia Pacific 57 % 55 % 56 % 55 % 59 %

Europe 6 % 5 % 6 % 6 % 6 %

Japan 7 % 9 % 9 % 9 % 2 %

Revenue from Asia Pacific rose to 57% as business from North America declined to 30% of sales. Business from Europe rose to 6% while contribution from Japan decreased to 7%.

Revenue Breakdown by Geometry

Geometry 3Q20 2Q20 1Q20 4Q19 3Q19

14nm and below 0 % 0 % 0 % 0 % 0 %

14nm<x<=28nm 14 % 13 % 9 % 10 % 12 %

28nm<x<=40nm 23 % 23 % 25 % 22 % 26 %

40nm<x<=65nm 19 % 16 % 16 % 16 % 14 %

65nm<x<=90nm 10 % 13 % 15 % 18 % 12 %

90nm<x<=0.13um 11 % 11 % 11 % 11 % 11 %

0.13um<x<=0.18um 13 % 13 % 13 % 12 % 13 %

0.18um<x<=0.35um 8 % 8 % 8 % 8 % 9 %

0.5um and above 2 % 3 % 3 % 3 % 3 %

Revenue contribution from 28nm increased to 14% while 40nm business remained unchanged at 23% of sales.

Revenue Breakdown by Customer Type

Customer Type 3Q20 2Q20 1Q20 4Q19 3Q19

Fabless 88 % 88 % 88 % 87 % 92 %

IDM 12 % 12 % 12 % 13 % 8 %

Revenue from fabless customers stayed at 88% of revenue.

Revenue Breakdown by Application ^(1)

Application 3Q20 2Q20 1Q20 4Q19 3Q19

Computer 13 % 14 % 13 % 13 % 13 %

Communication 54 % 51 % 54 % 54 % 54 %

Consumer 24 % 24 % 24 % 24 % 26 %

Others 9 % 11 % 9 % 9 % 7 %

Revenue from the communication segment increased to 54%, while business from computer applications declined to 13%. Business from consumer applications remained unchanged at 24% as other segments decreased to 9%.

(1) Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RWcontrol 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 DVDplayers, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards,toys, etc.

Blended ASP Trend

Blended average selling price (ASP) increased slightly in 3Q20.

(To view blended ASP trend, please click here for 3Q20 ASP)

Shipment and Utilization Rate3

Wafer Shipments

3Q20 2Q20 1Q20 4Q19 3Q19

Wafer Shipments 2,254 2,218 2,148 2,042 1,806(8" K equivalents)

Quarterly Capacity Utilization Rate

3Q20

2Q20

1Q20

4Q19

3Q19

Utilization Rate

97

%

98

%

93

%

92

%

91

%

Total Capacity (8" K equivalents)

2,308

2,291

2,278

2,237

2,004

In 3Q20, wafer shipments increased 1.6% QoQ to 2,254K, while quarterly capacity rose 0.7% QoQ to 2,308K. As a result, the overall utilization rate in 3Q20 was 97%.

Capacity4

Quarterly Capacity Utilization Rate

3Q20 2Q20 1Q20 4Q19 3Q19

Utilization Rate 97 % 98 % 93 % 92 % 91 %

Total Capacity 2,308 2,291 2,278 2,237 2,004(8" K equivalents)

In 3Q20, wafer shipments increased 1.6% QoQ to 2,254K, while quarterly capacity rose 0.7% QoQ to 2,308K. As a result, the overall utilization rate in 3Q20 was 97%.

Capacity4

Annual Capacity in Quarterly Capacity inthousands of wafers thousands of wafers

FAB Geometry 2019 2018 2017 2016 FAB 4Q20E 3Q20 2Q20 1Q20 (um)

WTK 6" 3.5 - 370 396 422 423 WTK 93 93 93 92 0.45

Fab 8" 0.5 - 825 825 825 827 Fab 201 201 201 2008A 0.25 8A

Fab 8" 0.35 - 436 383 357 348 Fab 113 113 113 1128C 0.11 8C

Fab 8" 0.13 - 359 347 341 342 Fab 93 93 93 928D 0.09 8D

Fab 8" 0.5 - 426 418 418 419 Fab 113 113 113 1128E 0.15 8E

Fab 8" 0.18 - 434 431 417 401 Fab 122 122 122 1218F 0.11 8F

Fab 8" 0.18 - 372 372 347 336 Fab 93 93 93 938S 0.11 8S

Fab 8" 0.5 - 831 771 753 750 Fab 230 230 230 2288N 0.11 8N

Fab 12" 0.13 - 997 997 970 885 Fab 261 261 261 26012A 0.014 12A

Fab 12" 0.13 - 595 555 537 584 Fab 160 160 155 15412i 0.040 12i

Fab 12" 0.040 - 203 183 97 9 Fab 57 56 53 5212X 0.028 12X

Fab 12" 0.090 - 98 - - - Fab 98 98 98 9712M 0.040 12M

Total^(1) 8,148 7,673 7,304 6,983 Total 2,311 2,308 2,291 2,278

YoY Growth Rate 6 % 5 % 5 % 6 %

Total capacity in the third quarter totaled 2,308K 8-inch equivalent wafers. We foresee fourth quarter capacity will grow to 2,311K 8-inch equivalent wafers, mainly reflecting capacity increase at Fab 12X.

(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.

Capital Expenditure by Year - in US$ billionYear 2019 2018 2017 2016 2015

CAPEX $ 0.6 $ 0.7 $ 1.4 $ 2.8 $ 1.9

2020 CAPEX Plan

8"

12"

Total

15

%

85

%

US$1.0 billion

CAPEX spending in 3Q20 was US$252 million, leading to a total of US$540 million in capital expenditure investment during the first nine months of 2020. Full year 2020 CAPEX is budgeted at US$1.0 billion.

Fourth Quarter 2020 Outlook & Guidance

Quarter-over-Quarter Guidance:

* Wafer Shipments: To increase by 1-2% * ASP in USD: To increase by 1% * Gross Profit Margin: To remain flat * Capacity Utilization: mid-90% range * 2020 CAPEX: US$1 billion

2020 CAPEX Plan

8" 12" Total

15 % 85 % US$1.0 billion

CAPEX spending in 3Q20 was US$252 million, leading to a total of US$540 million in capital expenditure investment during the first nine months of 2020. Full year 2020 CAPEX is budgeted at US$1.0 billion.

Fourth Quarter 2020 Outlook & Guidance

Quarter-over-Quarter Guidance:

* Wafer Shipments: To increase by 1-2% * ASP in USD: To increase by 1% * Gross Profit Margin: To remain flat * Capacity Utilization: mid-90% range * 2020 CAPEX: US$1 billion

Recent Developments / Announcements

Oct 29, UMC and US Department of Justice Reach Plea Agreement on Trade2020 Secret Case

Jul 29, UMC 2Q20 Financial Results2020

Please visit UMC's website for further details regarding the aboveannouncements

Conference Call / Webcast Announcement

Thursday, October 29, 2020

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 09:00 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 3Q20 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 more than 750,000 8-inch equivalent wafers per month. The company employs approximately 19,500 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 sales for first quarter; product releases and market shares; opportunities in the 5G and IoT markets; anticipated wafer demands in market segments; execution of corporate strategies; repayment of bank loans; expected foundry capacities; the ability to obtain new business opportunities; and information under the heading "First Quarter of 2020 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 risks 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 SUBSIDIARIESConsolidated Condensed Balance SheetAs of September 30, 2020Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$) September 30, 2020 US$ NT$ %AssetsCurrent assetsCash and cash equivalents 3,397 98,839 26.8 %

Notes & Accounts receivable, net 926 26,959 7.3 %

Inventories, net 786 22,863 6.2 %

Other current assets 509 14,816 4.1 %

Total current assets 5,618 163,477 44.4 %

Non-current assetsFunds and investments 1,617 47,041 12.8 %

Property, plant and equipment 4,559 132,662 36.0 %

Right-of-use assets 272 7,901 2.2 %

Other non-current assets 588 17,163 4.6 %

Total non-current assets 7,036 204,767 55.6 %

Total assets 12,654 368,244 100.0 %

LiabilitiesCurrent liabilitiesShort-term loans 260 7,572 2.1 %

Payables 1,196 34,806 9.5 %

Current portion of long-term liabilities 303 8,826 2.4 %

Other current liabilities 274 7,947 2.1 %

Total current liabilities 2,033 59,151 16.1 %

Non-current liabilitiesBonds payable 574 16,690 4.5 %

Long-term loans 1,126 32,767 8.9 %

Lease liabilities, noncurrent 178 5,184 1.4 %

Other non-current liabilities 1,152 33,537 9.1 %

Total non-current liabilities 3,030 88,178 23.9 %

Total liabilities 5,063 147,329 40.0 %

EquityEquity attributable to the parent companyCapital 4,269 124,224 33.7 %

Additional paid-in capital 1,474 42,903 11.7 %

Retained earnings and other components of 1,847 53,754 14.6 %equityTreasury stock (4 ) (120 ) (0.0 %)

Total equity attributable to the parent company 7,586 220,761 60.0 %

Non-controlling interests 5 154 0.0 %

Total equity 7,591 220,915 60.0 %

Total liabilities and equity 12,654 368,244 100.0 %

Note?New Taiwan Dollars have been translated into U.S. Dollars at the September30, 2020 exchange rate of NT $29.10 per U.S. Dollar.UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIESConsolidated Condensed Statements of Comprehensive IncomeFigures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)Except Per Share and Per ADS DataYear over Year ComparisonQuarter over Quarter ComparisonThree-Month Period EndedThree-Month Period EndedSeptember 30, 2020September 30, 2019Chg.September 30, 2020June 30, 2020Chg.US$NT$US$NT$%US$NT$US$NT$%Operating revenues1,542

44,870

1,297

37,738

18.9

%

1,542

44,870

1,525

44,386

1.1

%

Operating costs(1,206

)

(35,101

)

(1,076

)

(31,305

)

12.1

%

(1,206

)

(35,101

)

(1,173

)

(34,129

)

2.8

%

Gross profit336

9,769

221

6,433

51.9

%

336

9,769

352

10,257

(4.8

%)

21.8

%

21.8

%

17.1

%

17.1

%

21.8

%

21.8

%

23.1

%

23.1

%

Operating expenses- Sales and marketing expenses(35

)

(1,009

)

(33

)

(970

)

4.1

%

(35

)

(1,009

)

(32

)

(929

)

8.7

%

- General and administrative expenses(56

)

(1,614

)

(46

)

(1,344

)

20.1

%

(56

)

(1,614

)

(53

)

(1,537

)

4.9

%

- Research and development expenses(114

)

(3,314

)

(97

)

(2,813

)

17.8

%

(114

)

(3,314

)

(110

)

(3,203

)

3.5

%

- Expected credit impairment gain (loss)15

429

(0

)

(4

)

-

15

429

(0

)

(8

)

-

Subtotal(190

)

(5,508

)

(176

)

(5,131

)

7.4

%

(190

)

(5,508

)

(195

)

(5,677

)

(3.0

%)

Net other operating income and expenses99

2,872

41

1,207

137.9

%

99

2,872

44

1,266

126.9

%

Operating income245

7,133

86

2,509

184.3

%

245

7,133

201

5,846

22.0

%

15.9

%

15.9

%

6.7

%

6.7

%

15.9

%

15.9

%

13.2

%

13.2

%

Net non-operating income and expenses71

2,074

(18

)

(532

)

-

71

2,074

28

818

153.4

%

Income from continuing operations before income tax316

9,207

68

1,977

365.6

%

316

9,207

229

6,664

38.2

%

20.5

%

20.5

%

5.2

%

5.2

%

20.5

%

20.5

%

15.0

%

15.0

%

Income tax expenses(6

)

(197

)

(1

)

(39

)

405.4

%

(6

)

(197

)

(21

)

(613

)

(67.9

%)

Net income310

9,010

67

1,938

364.8

%

310

9,010

208

6,051

48.9

%

20.1

%

20.1

%

5.1

%

5.1

%

20.1

%

20.1

%

13.6

%

13.6

%

Other comprehensive income (loss)47

1,390

20

591

135.5

%

47

1,390

109

3,178

(56.2

%)

Total comprehensive income (loss)357

10,400

87

2,529

311.3

%

357

10,400

317

9,229

12.7

%

Net income attributable to:??Stockholders of the parent313

9,106

101

2,929

210.9

%

313

9,106

230

6,681

36.3

%

??Non-controlling interests(3

)

(96

)

(34

)

(991

)

(90.2

%)

(3

)

(96

)

(22

)

(630

)

(84.6

%)

Comprehensive income (loss) attributable to:??Stockholders of the parent361

10,497

122

3,540

196.5

%

361

10,497

339

9,859

6.5

%

??Non-controlling interests(4

)

(97

)

(35

)

(1,011

)

(90.4

%)

(4

)

(97

)

(22

)

(630

)

(84.6

%)

Earnings per share-basic0.026

0.75

0.009

0.25

0.026

0.75

0.019

0.55

Earnings per ADS (2)0.129

3.75

0.043

1.25

0.129

3.75

0.095

2.75

Weighted average number of shares outstanding (in millions)12,108

11,708

12,108

12,193

Notes:(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2020 exchange rate of NT $29.10 per U.S. Dollar.(2) 1 ADS equals 5 common shares.UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIESConsolidated Condensed Statements of Comprehensive IncomeFigures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)Except Per Share and Per ADS Data Year over Year Comparison Quarter over Quarter Comparison Three-Month Period Ended Three-Month Period Ended September 30, 2020 September 30, 2019 Chg. September 30, 2020 June 30, 2020 Chg. US$ NT$ US$ NT$ % US$ NT$ US$ NT$ %Operating 1,542 44,870 1,297 37,738 18.9 % 1,542 44,870 1,525 44,386 1.1 %revenuesOperating costs (1,206 ) (35,101 ) (1,076 ) (31,305 ) 12.1 % (1,206 ) (35,101 ) (1,173 ) (34,129 ) 2.8 %

Gross profit 336 9,769 221 6,433 51.9 % 336 9,769 352 10,257 (4.8 %)

21.8 % 21.8 % 17.1 % 17.1 % 21.8 % 21.8 % 23.1 % 23.1 %

Operatingexpenses- Sales and (35 ) (1,009 ) (33 ) (970 ) 4.1 % (35 ) (1,009 ) (32 ) (929 ) 8.7 %marketingexpenses- General and (56 ) (1,614 ) (46 ) (1,344 ) 20.1 % (56 ) (1,614 ) (53 ) (1,537 ) 4.9 %administrativeexpenses- Research and (114 ) (3,314 ) (97 ) (2,813 ) 17.8 % (114 ) (3,314 ) (110 ) (3,203 ) 3.5 %developmentexpenses- Expectedcredit 15 429 (0 ) (4 ) - 15 429 (0 ) (8 ) - impairment gain(loss)Subtotal (190 ) (5,508 ) (176 ) (5,131 ) 7.4 % (190 ) (5,508 ) (195 ) (5,677 ) (3.0 %)

Net other 99 2,872 41 1,207 137.9 % 99 2,872 44 1,266 126.9 %operating incomeand expensesOperating income 245 7,133 86 2,509 184.3 % 245 7,133 201 5,846 22.0 %

15.9 % 15.9 % 6.7 % 6.7 % 15.9 % 15.9 % 13.2 % 13.2 %

Netnon-operating 71 2,074 (18 ) (532 ) - 71 2,074 28 818 153.4 %income andexpensesIncome fromcontinuing 316 9,207 68 1,977 365.6 % 316 9,207 229 6,664 38.2 %operations before incometax 20.5 % 20.5 % 5.2 % 5.2 % 20.5 % 20.5 % 15.0 % 15.0 %

Income tax (6 ) (197 ) (1 ) (39 ) 405.4 % (6 ) (197 ) (21 ) (613 ) (67.9 %)expensesNet income 310 9,010 67 1,938 364.8 % 310 9,010 208 6,051 48.9 %

20.1 % 20.1 % 5.1 % 5.1 % 20.1 % 20.1 % 13.6 % 13.6 %

Other 47 1,390 20 591 135.5 % 47 1,390 109 3,178 (56.2 %)comprehensiveincome (loss) Total 357 10,400 87 2,529 311.3 % 357 10,400 317 9,229 12.7 %comprehensiveincome (loss) Net incomeattributable to:??Stockholders 313 9,106 101 2,929 210.9 % 313 9,106 230 6,681 36.3 %of the parent?? (3 ) (96 ) (34 ) (991 ) (90.2 %) (3 ) (96 ) (22 ) (630 ) (84.6 %)Non-controllinginterests Comprehensiveincome (loss)attributable to:??Stockholders 361 10,497 122 3,540 196.5 % 361 10,497 339 9,859 6.5 %of the parent?? (4 ) (97 ) (35 ) (1,011 ) (90.4 %) (4 ) (97 ) (22 ) (630 ) (84.6 %)Non-controllinginterests Earnings per 0.026 0.75 0.009 0.25 0.026 0.75 0.019 0.55 share-basicEarnings per ADS 0.129 3.75 0.043 1.25 0.129 3.75 0.095 2.75 ^(2)Weighted averagenumber of shares outstanding 12,108 11,708 12,108 12,193 (in millions) Notes:(1) New Taiwan Dollars have been translated into U.S. Dollars at the September30, 2020 exchange rate of NT $29.10 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, 2020

September 30, 2020

US$

NT$

%

US$

NT$

%

Operating revenues1,542

44,870

100.0

%

4,520

131,525

100.0

%

Operating costs(1,206

)

(35,101

)

(78.2

%)

(3,553

)

(103,376

)

(78.6

%)

Gross profit336

9,769

21.8

%

967

28,149

21.4

%

Operating expenses- Sales and marketing expenses(35

)

(1,009

)

(2.3

%)

(102

)

(2,978

)

(2.3

%)

- General and administrative expenses(56

)

(1,614

)

(3.6

%)

(162

)

(4,696

)

(3.5

%)

- Research and development expenses(114

)

(3,314

)

(7.4

%)

(333

)

(9,702

)

(7.4

%)

- Expected credit impairment gain15

429

1.0

%

16

468

0.4

%

Subtotal(190

)

(5,508

)

(12.3

%)

(581

)

(16,908

)

(12.8

%)

Net other operating income and expenses99

2,872

6.4

%

177

5,152

3.9

%

Operating income245

7,133

15.9

%

563

16,393

12.5

%

Net non-operating income and expenses71

2,074

4.6

%

11

299

0.2

%

Income from continuing operations before income tax316

9,207

20.5

%

574

16,692

12.7

%

Income tax expense(6

)

(197

)

(0.4

%)

(14

)

(401

)

(0.3

%)

Net income310

9,010

20.1

%

560

16,291

12.4

%

Other comprehensive income (loss)47

1,390

3.1

%

29

854

0.6

%

Total comprehensive income (loss)357

10,400

23.2

%

589

17,145

13.0

%

Net income attributable to:??Stockholders of the parent313

9,106

20.3

%

618

17,994

13.7

%

??Non-controlling interests(3

)

(96

)

(0.2

%)

(58

)

(1,703

)

(1.3

%)

Comprehensive income (loss) attributable to:??Stockholders of the parent361

10,497

23.4

%

643

18,721

14.2

%

??Non-controlling interests(4

)

(97

)

(0.2

%)

(54

)

(1,576

)

(1.2

%)

Earnings per share-basic0.026

0.75

0.052

1.50

Earnings per ADS (2)0.129

3.75

0.258

7.50

Weighted average number of shares outstanding (in millions)12,108

12,028

Notes:(1) New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2020 exchange rate of NT $29.10 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 For the Nine-Month Period Ended Ended

September 30, 2020 September 30, 2020

US$ NT$ % US$ NT$ %

Operating 1,542 44,870 100.0 % 4,520 131,525 100.0 %revenuesOperating costs (1,206 ) (35,101 ) (78.2 %) (3,553 ) (103,376 ) (78.6 %)

Gross profit 336 9,769 21.8 % 967 28,149 21.4 %

Operatingexpenses- Sales and (35 ) (1,009 ) (2.3 %) (102 ) (2,978 ) (2.3 %)marketingexpenses- General and (56 ) (1,614 ) (3.6 %) (162 ) (4,696 ) (3.5 %)administrativeexpenses- Research and (114 ) (3,314 ) (7.4 %) (333 ) (9,702 ) (7.4 %)developmentexpenses- Expected credit 15 429 1.0 % 16 468 0.4 %impairment gain Subtotal (190 ) (5,508 ) (12.3 %) (581 ) (16,908 ) (12.8 %)

Net other 99 2,872 6.4 % 177 5,152 3.9 %operating incomeand expensesOperating income 245 7,133 15.9 % 563 16,393 12.5 %

Net non-operating 71 2,074 4.6 % 11 299 0.2 %income andexpensesIncome fromcontinuing 316 9,207 20.5 % 574 16,692 12.7 %operations before incometax Income tax (6 ) (197 ) (0.4 %) (14 ) (401 ) (0.3 %)expenseNet income 310 9,010 20.1 % 560 16,291 12.4 %

Other 47 1,390 3.1 % 29 854 0.6 %comprehensiveincome (loss) Total 357 10,400 23.2 % 589 17,145 13.0 %comprehensiveincome (loss) Net incomeattributable to:??Stockholders of 313 9,106 20.3 % 618 17,994 13.7 %the parent??Non-controlling (3 ) (96 ) (0.2 %) (58 ) (1,703 ) (1.3 %)interests Comprehensiveincome (loss)attributable to:??Stockholders of 361 10,497 23.4 % 643 18,721 14.2 %the parent??Non-controlling (4 ) (97 ) (0.2 %) (54 ) (1,576 ) (1.2 %)interests Earnings per 0.026 0.75 0.052 1.50 share-basicEarnings per ADS 0.129 3.75 0.258 7.50 ^(2) Weighted averagenumber of shares 12,108 12,028 outstanding(in millions) Notes:(1) New Taiwan Dollars have been translated into U.S. Dollars at the September30, 2020 exchange rate of NT $29.10 per U.S. Dollar.(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIESConsolidated Condensed Statement of Cash FlowsFor The Nine-Month Period Ended September 30, 2020Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)US$NT$Cash flows from operating activities :Net income before tax574

16,692

Depreciation & Amortization1,269

36,915

Share of profit of associates and joint ventures(98

)

(2,846

)

Changes in working capital & others(38

)

(1,088

)

Net cash provided by operating activities1,707

49,673

Cash flows from investing activities :Acquisition of property, plant and equipment(502

)

(14,608

)

Proceeds from disposal of property, plant and equipment60

1,757

Acquisition of intangible assets(59

)

(1,716

)

Increase in other financial assets(268

)

(7,812

)

Others(10

)

(295

)

Net cash used in investing activities(779

)

(22,674

)

Cash flows from financing activities :Decrease in short-term loans(147

)

(4,284

)

Redemption of bonds(471

)

(13,703

)

Proceeds from long-term loans449

13,070

Repayments of long-term loans(226

)

(6,583

)

Cash dividends(336

)

(9,765

)

Treasury stock acquired(58

)

(1,678

)

Treasury stock sold to employees58

1,678

Others(40

)

(1,184

)

Net cash used in financing activities(771

)

(22,449

)

Effect of exchange rate changes on cash and cash equivalents(42

)

(1,203

)

Net increase in cash and cash equivalents115

3,347

Cash and cash equivalents at beginning of period3,282

95,492

Cash and cash equivalents at end of period3,397

98,839

Note: New Taiwan Dollars have been translated into U.S. Dollars at the September 30, 2020 exchange rate of NT $29.10 per U.S. Dollar. 1Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending September 30, 2020, the three-month period ending June 30, 2020, and the equivalent three-month period that ended September 30, 2019. For all 3Q20 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the September 30, 2020 exchange rate of NT$ 29.10 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/20201029005539/en/

CONTACT: Michael Lin / David Wong UMC, Investor Relations + 886-2-2658-9168, ext. 16900 jinhong_lin@umc.com david_wong@umc.com