United Microelectronics (UMC) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached NT$56.8 billion, up 4% sequentially and nearly flat year-over-year, with gross margin at 35.2% and net income attributable to shareholders at NT$13.79 billion, EPS of NT$1.11.

• Wafer shipments increased 2.6% quarter-over-quarter to 831,000 12-inch equivalents; utilization rate improved to 68%.

• 22/28nm business contributed 33% of wafer revenue, driven by demand in Wi-Fi and digital TV; technology updates included industry-first 3D IC RF-SOI stacking and a 22nm embedded high-voltage platform.

• Net income rose 32% from 1Q24 but declined 12% year-over-year.

• EPS for 2Q24 was NT$1.11, compared to NT$0.84 in 1Q24 and NT$1.27 in 2Q23.

Financial highlights

• Gross profit for Q2 2024 was NT$19.98 billion, up 18% sequentially; operating income rose 19% quarter-over-quarter to NT$13.89 billion.

• Net non-operating income and expenses increased 139% sequentially to NT$2.53 billion, mainly from investment and interest gains.

• Cash and cash equivalents stood at NT$121.23 billion as of June 30, 2024; total equity at NT$356.09 billion.

• Total assets were NT$586.96 billion.

• ASP remained flat in Q2; Asia revenue share rose to 64%, North America steady at 25%.

Outlook and guidance

• Q3 2024 wafer shipments expected to increase by mid single-digit percentage; ASP in USD to remain firm.

• Gross margin guided to mid-30% range; utilization rate to reach ~70%.

• 2024 CapEx budget unchanged at US$3.3 billion, with 95% allocated to 12-inch capacity.

• End-market dynamics expected to improve, especially in communication and computing; margin pressure anticipated from higher depreciation and utility costs.

• Capacity to increase to 1,274K 12-inch wafer equivalents in Q3.