United Microelectronics (UMC) Q4 2015 earnings summary

Executive summary

• Q4 2015 revenue was NT$33,849M, down 4.2% QoQ; net income was NT$3,071M and parent-attributable net income was NT$3,160M, up 85.0% QoQ.

• FY2015 revenue increased 3.4% YoY to NT$144,830M; foundry revenue grew 9%, with 28nm revenue tripling.

Financial highlights

• Q4 gross profit was NT$6,979M, up 1.0% QoQ; operating income rose 91.6% to NT$1,880M, and EPS increased to NT$0.25 from NT$0.14.

• FY2015 operating income rose 7.5% to NT$10,836M; net income was NT$12,836M, parent-attributable net income was NT$13,449M, and EPS was NT$1.08.

• Q4 gross margin improved to 20.6% from 19.6%; NT dollar weakness and improved production yield supported the increase.

• FY2015 consolidated revenue rose 3.4% to NT$144,830M; gross profit was ~NT$31.7bn.

Outlook and guidance

• Q1 2016 foundry revenue and wafer shipments were expected to remain flat QoQ, with gross margin in the high teens and utilization in the low 80% range.

• 2016 foundry-industry growth was estimated at 4% and semiconductor growth at 3%; recovery was expected from Q2 amid cautious inventory management.

• 2016 capacity was expected to grow ~6% YoY, with 12-inch capacity up 8% and 8-inch capacity up 3%; Q1 total capacity was estimated at 1,692 thousand 8-inch-equivalent wafers.

• Q1 ASP was expected roughly flat in NT dollars as currency depreciation offset price resets; depreciation expense was forecast to rise ~10% QoQ.

• 28nm utilization was forecast at ~62% in Q1, above 85% in Q2 and above 90% in H2, including planned capacity additions.