United Microelectronics (UMC) Q4 2023 earnings summary

Executive summary

• Q4 2023 revenue was NT$54,958M, down 3.7% QoQ and 19.0% YoY; parent-attributable net income was NT$13,195M and EPS was NT$1.06.

• FY2023 revenue was NT$222,533M, down 20.2% YoY; parent-attributable net income was NT$60,990M and EPS was NT$4.93.

• 22/28nm reached a record 36% of Q4 wafer revenue; its full-year contribution was 31%.

Financial highlights

• Q4 gross profit was NT$17,806M, down 13.0% QoQ; gross margin was 32.4% versus 35.9% in Q3. Operating income was NT$12,423M, down 18.9% QoQ, with a 22.6% margin.

• Q4 operating expenses rose 16.0% QoQ to NT$6.64B; R&D rose 21.2% to NT$3.95B, or 7.2% of revenue.

• Q4 net income was NT$13,193M versus NT$15,966M in Q3; net non-operating income was NT$2.23B, including NT$1.75B net investment gain and NT$0.88B net interest income, partly offset by NT$0.41B exchange loss.

• FY2023 gross profit was NT$77,744M and gross margin 34.9%; operating income was NT$57,891M, down 44.5% YoY. Net income was NT$61,440M and parent-attributable net income NT$60,990M.

Outlook and guidance

• Q1 2024 wafer shipments are expected to rise 2–3% QoQ; USD ASP is expected to decline 5%, gross margin to be ~30%, and utilization to be in the low-60% range.

• Q1 2024 capacity is expected to reach 1,212K 12-inch equivalent wafers, up from 1,204K in Q4, as 12A P6 ramps.

• The 2024 cash-based foundry CAPEX budget is US$3.3B, allocated 95% to 12-inch and 5% to 8-inch capacity.