United Microelectronics (UMC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached NT$60.49 billion, up 6.5% sequentially and 6.0% year-over-year, with wafer shipments up 7.8% and record specialty technology revenue at 53.1% of sales.

• Net income attributable to shareholders was NT$14.47 billion, a 5.0% increase from Q2 but down 9.4% year-over-year; EPS was NT$1.16.

• 22/28nm shipments hit a record high, accounting for 35% of wafer revenue.

• Technology investment remains a priority, with a progressing Intel partnership and Singapore fab extension nearing completion.

• Wafer shipments and capacity utilization improved to 71% in Q3.

Financial highlights

• Gross margin for Q3 2024 was 33.8%, down from 35.2% in Q2.

• Operating income for Q3 2024 was NT$14.10 billion, up 1.5% sequentially but down 7.9% year-over-year.

• Cumulative 2024 revenue for the first three quarters grew 2.6% year-over-year to NT$171.92 billion; net income for the period was NT$38.71 billion.

• Cash and cash equivalents stood at NT$103.41 billion as of Sep 30, 2024; total equity reached NT$368.49 billion.

• EBITDA margin remains in the low 40% range; depreciation in 2024 increased over 20%.

Outlook and guidance

• Q4 2024 wafer shipments and ASP in USD expected to remain flat; NT dollar appreciation may reduce reported revenue.

• Gross margin for Q4 expected to drop to around 30% due to lower utilization (high 60% range), currency headwinds, and higher depreciation.

• 2024 CAPEX budget set at US$3.0 billion, with 95% allocated to 12" capacity.

• For 2025, wafer shipments expected to increase, but customer forecasts remain conservative.

• Pricing resilience expected to persist, with a one-off pricing adjustment likely in early 2025.