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UMC Q3 profits plummet 53%, wafer demand will continue to weaken

Wafer foundry UMC held a legal briefing yesterday. The consolidated revenue in the third quarter reached a record high of 39.387 billion yuan. However, due to the transfer of investment losses and exchange losses, the profit fell, and the net profit per share was 0.14 yuan. Expected by the market.
UMC estimated that the fourth quarter wafer shipment season will be reduced by 4 to 5%, and the average US dollar price will be reduced by 4 to 5%. The company estimates that revenue will fall by less than 10% from the previous quarter.
The third quarter of UMC announced a 1.4% increase in revenue and revenue of 39.387 billion yuan, a record high in the single-season revenue, up 4.5% over the same period last year. The average gross profit margin was 17.6% better than expected, due to the increase in operating expenses and the decrease in operating profit. 23.5% reached 2.435 billion yuan, but still grew 49.5% compared with the same period of last year. However, due to the transfer of investment losses and exchange losses, the attributable net profit attributable to the parent company decreased by 53.0% to 1.720 billion yuan, a decrease of 50.5% compared with the same period of last year. The net profit per share is only 0.14 yuan.
UMC’s consolidated revenue for the first three quarters of this year reached RMB 111.735 billion, up 2.7% from the same period of last year. The average gross profit margin was 15.8% lower than the same period of last year, but the operating profit representing the profitability of the industry reached 6.386 billion yuan, up 36.8 over the same period last year. %, the net profit attributable to the parent company after tax reached 8.78 billion yuan, an increase of 11.7% over the same period of last year, and the net profit per share was 0.73 yuan.
For the outlook for the fourth quarter, UMC estimates that wafer shipments will be reduced by 4 to 5% quarter-on-quarter, with an average US dollar price down 4 to 5%, an average gross profit margin of 15%, and a capacity utilization rate of 87. Between 89%, capital expenditures this year are $1.1 billion.
Wang Shi, general manager of UMC, said that the overall capacity utilization rate in the third quarter came to 94%, and the shipment volume was 1.8 million 8-inch wafers. Under the full capacity of the 8-inch and 12-inch mature processes, It also helped create a cash flow of NT$10.16 billion in the third quarter. In addition, UMC also saw an increase in demand for computer-related applications, offsetting the decline in some communications markets.
Wang Shi said that in the fourth quarter, because the sales of low-end smart phones continued to weaken, it is expected that wafer demand will slow down.
Looking forward to the fourth quarter, Wang Liang, general manager of UMC, said that sales of low-end smart phones continued to weaken, and wafer demand is expected to slow down. Capacity utilization in the fourth quarter may fall to 87-89%, wafer shipments. The volume will also be reduced by 4-5%, and the average product price is expected to fall by 4-5%.
Wang Shi expects that the capacity utilization rate in the fourth quarter will fall below 90%, possibly to 87-89%, and wafer shipments will also be reduced by 4-5%. As for the average selling price of products, it is expected to fall by 4. -5%.
Wang Shi pointed out that in the long run, demand in the industrial application market and the automotive sector will continue to grow. The US company Lange is a leading provider of high-performance power and sensor solutions and has just signed a long-term cooperation agreement with UMC to ensure that this growing wafer demand is supported by long-term capacity. In the long run, a wide range of key semiconductor components will continue to play an increasingly important role in UMC’s special process wafer specialist business.
Wang Shi said that while continuing to operate the strategy, it will aim to improve investment returns and slow down the expansion of advanced technologies. It is believed that the global expansion of geographical risks will increase the competitive advantage of customers.
In addition, UMC recently signed a long-term cooperation agreement with US-based Lange, a leading company providing high-performance power and sensor solutions, to ensure long-term capacity for the company’s growing wafer demand. stand by.

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