UMC Reports Fourth Quarter 2016 Results

Company to ship 14nm customer wafers amid 1Q17 seasonal adjustment

Fourth Quarter 2016 Overview¹:

• Revenue: NT$38.31 billion (US$1.19 billion)
• Gross margin: 22.9%
• Foundry revenue from 28nm: 22%; Foundry operating margin: 6.3%
• Foundry capacity utilization rate: 94%
• Net income attributable to the stockholders of the parent: NT$2.55 billion (US$79.0 million)
• Earnings per share: NT$0.21; earnings per ADS: US$0.033

TAIPEI, Taiwan--(BUSINESS WIRE)--United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the fourth quarter of 2016.

Fourth quarter consolidated revenue was NT$38.31 billion, flat from NT$38.16 billion in 3Q16 and an increase of 13.2% YoY from NT$33.85 billion in 4Q15. 4Q16 consolidated gross margin was 22.9%. Net income attributable to the stockholders of the parent was NT$2.55 billion, with earnings per ordinary share of NT$0.21.

Mr. Po-Wen Yen, CEO of UMC, said, “In the fourth quarter of 2016, UMC’s revenue from foundry operations was NT$38.22 billion. Overall capacity utilization reached 94%, bringing wafer shipments to 1.66 million 8-inch equivalent wafers. Operating margin was 6.3%. During the quarter, our 28nm and 40nm utilization rate continued to exceed 90%, while strength in 8” consumer and communication demand raised 8” fab utilization to nearly 100%. We also realized a noteworthy milestone in November with the grand opening of our 300mm Fab 12X in Xiamen, China, which began shipping 40nm customer wafers just 20 months after the fab’s March 2015 groundbreaking. This site will ideally position UMC to capitalize on the vast business opportunities within China’s semiconductor market while bringing us closer to our Chinese customers, where our team can provide superior technical and manufacturing services and more efficiently bring new tape outs into production. With regard to our advanced 14nm technology, we have recently made substantial progress for this advanced node. Following intensive engineering activities with our customer, UMC’s 14nm transistor performance has delivered speed and leakage results which are comparable with the industry’s 14nm standards. Our yields have fulfilled customer requirements, and we anticipate 14nm wafer shipments to commence in 1Q17, highlighting our determined efforts to reach this important milestone.”

CEO Yen continued, “Looking into the first quarter of 2017, as we enter early year seasonality, we expect a sequential decrease in our foundry business. For full year 2017, UMC will continue to work towards a year of growth and prosperity. Our fundamental 28nm process technology know-how will enable our team to develop new manufacturing solutions on logic and specialty technology platforms. We will also expand 300mm capacity at Fab 12X to address growing customer wafer demand, increase our foundry market share and elevate the competitiveness of our foundry services. We believe these efforts will position UMC to capture the next wave of growth opportunities.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)	4Q16		3Q16		QoQ % change		4Q15		YoY % change
Net Operating Revenues	38,306		38,164		0.4		33,849		13.2
Gross Profit	8,759		8,301		5.5		6,979		25.5
Operating Expenses	(6,627	)	(6,373	)	4.0		(5,065	)	30.8
Net Other Operating Income and Expenses	144		(443	)	-		(34	)	-
Operating Income	2,276		1,485		53.3		1,880		21.1
Net Non-Operating Income and Expenses	(1,210	)	466		-		906		-
Net Income Attributable to Stockholders of the Parent	2,548		2,975		(14.4	)	3,160		(19.4	)
EPS (NT$ per share)	0.21		0.24				0.25
(US$ per ADS)	0.033		0.037				0.039

In 4Q16, net operating revenues increased 0.4% to NT$38.31 billion, including NT$38.22 billion from the foundry segment. Revenue from 28nm and 40nm contribution was 22% and 26% respectively. Gross profit was NT$8.76 billion, or 22.9% of revenue. Operating expenses increased 4.0% to NT$6.63 billion. Net other operating income was NT$144 million, leading to an operating income of NT$2.28 billion. Net non-operating expense was NT$1.21 billion. Net income attributable to stockholders of the parent was NT$2.55 billion.

Earnings per ordinary share for the quarter was NT$0.21. Earnings per ADS was US$0.033. The basic weighted average number of outstanding shares in 4Q16 was 12,208,239,978, compared with 12,208,239,978 shares in 3Q16 and 12,407,897,412 shares in 4Q15. The diluted weighted average number of outstanding shares was 13,442,173,503 in 4Q16, compared with 13,402,233,597 shares in 3Q16 and 13,601,975,910 shares in 4Q15. The fully diluted share count on December 31, 2016 was approximately 13,858,252,000. On December 31, 2016, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

Net operating revenues grew 0.4% to NT$38.31 billion. COGS slightly decreased to NT$29.55 billion, as depreciation was NT$11.31 billion, while other manufacturing costs decreased 1.9% to NT$18.23 billion. Gross profit was NT$8.76 billion, which included an insurance claim associated with the February 6, 2016 earthquake. Operating expenses grew 4.0% to NT$6.63 billion. G&A expense decreased 14% to NT$1.52 billion and Sales & Marketing grew to NT$1.28 billion. R&D expense increased 12.6% to NT$3.82 billion, or 10% of net operating revenues, which included an increase in R&D wafers. Net other operating income was NT$144 million, leading to an operating income of NT$2.28 billion.

COGS & Expenses
(Amount: NT$ million)	4Q16		3Q16		QoQ % change		4Q15		YoY % change
Net Operating Revenues	38,306		38,164		0.4		33,849		13.2
COGS	(29,547	)	(29,863	)	(1.1	)	(26,870	)	10.0
Depreciation	(11,314	)	(11,274	)	0.4		(9,700	)	16.6
Other Mfg. Costs	(18,233	)	(18,589	)	(1.9	)	(17,170	)	6.2
Gross Profit	8,759		8,301		5.5		6,979		25.5
Gross Margin (%)	22.9	%	21.8	%			20.6	%
Operating Expenses	(6,627	)	(6,373	)	4.0		(5,065	)	30.8
G&A	(1,521	)	(1,769	)	(14.0	)	(916	)	66.0
Sales & Marketing	(1,282	)	(1,207	)	6.2		(1,044	)	22.8
R&D	(3,824	)	(3,397	)	12.6		(3,105	)	23.2
Net Other Operating Income & Expenses	144		(443	)	-		(34	)	-
Operating Income	2,276		1,485		53.3		1,880		21.1

Net non-operating expense in 4Q16 was NT$1.21 billion. Net investment loss was NT$1.14 billion, which included an NT$599 million impairment loss from holdings of Shandong Huahong Energy Invest Co.

Non-Operating Income and Expenses
(Amount: NT$ million)	4Q16		3Q16		4Q15
Non-Operating Income and Expenses	(1,210	)	466		906
Net Interest Income and Expenses	(418	)	(326	)	(19	)
Net Investment Gain and Loss	(1,138	)	834		230
Gain and Loss on Disposal of Investment	1,023		304		376
Exchange Gain and Loss	(496	)	(338	)	(35	)
Other Gain and Loss	(181	)	(8	)	354

Cash inflow from operating activities reached NT$15.55 billion. Cash outflow from investing activities totaled NT$18.32 billion, including NT$21.88 billion in CAPEX spending for the foundry segment, resulting in a free cash outflow of NT$6.36 billion. Cash inflow from financing activities was NT$4.22 billion, mainly due to a cash inflow of NT$4.23 billion in bank loans. Net cash inflow for 4Q16 was NT$2.31 billion. Over the next 12 months, the company expects to repay NT$3 billion in bank loans.

Cash Flow Summary
(Amount: NT$ million)	For the 3-Month Period Ended Dec. 31, 2016		For the 3-Month Period Ended Sep. 30, 2016
Cash Flow from Operating Activities	15,546		13,888
Net income before tax	1,066		1,951
Depreciation & Amortization	13,376		12,901
Gain on disposal of investments	(1,023	)	(304	)
Impairment loss on financial assets	233		68
Impairment loss on non-financial assets	837		455
Exchange loss (gain) on financial assets and liabilities	1,114		(12	)
Changes in working capital	(164	)	559
Income tax paid	(146	)	(1,688	)
Other	253		(42	)
Cash Flow from Investing Activities	(18,321	)	(15,400	)
Capital expenditures	(21,905	)	(19,862	)
Proceeds from disposal of AFS financial assets	1,582		594
Acquisition of investments accounted for under the equity method	(840	)	-
Changes in refundable deposits	32		402
Acquisition of intangible assets	(316	)	(567	)
Other	3,126		4,033
Cash Flow from Financing Activities	4,221		8,885
Bank loans	4,230		13,446
Increase in other financial liabilities	-		2,345
Cash dividends	-		(6,907	)
Other	(9	)	1
Effect of Exchange Rate	867		(1,532	)
Net Cash Flow	2,313		5,841

Cash and cash equivalents increased to NT$57.58 billion, mainly due to bank loans of NT$4.23 billion. Days of inventory remained at 53 days.

Current Assets
(Amount: NT$ billion)	4Q16	3Q16	4Q15
Cash and Cash Equivalents	57.58	55.27	53.29
Notes & Accounts Receivable	23.05	22.37	19.33
Days Sales Outstanding	54	56	53
Inventories, net	17.00	17.17	17.64
Days of Inventory	53	53	58
Total Current Assets	110.47	106.97	94.82

Current liabilities decreased to NT$71.98 billion, primarily reflecting the decrease in short-term credit. Long-term credit/bonds increased to NT$60.73 billion, mostly reflecting the long-term credit for United Semiconductor (Xiamen). Total liabilities increased to NT$167.91 billion, leading to a debt to equity ratio of 77%.

Liabilities
(Amount: NT$ billion)	4Q16		3Q16		4Q15
Total Current Liabilities	71.98		83.44		48.25
Notes & Accounts Payable	6.85		6.74		5.95
Short-Term Credit / Bonds	31.05		47.05		12.11
Payable on Equipment	15.04		14.45		14.66
Other	19.04		15.20		15.53
Long-Term Credit / Bonds	60.73		39.68		47.52
Long-Term Investment Liabilities	20.31		20.54		6.06
Total Liabilities	167.91		155.96		108.55
Debt to Equity	77	%	71	%	47	%

Analysis of Revenue² for Foundry Segment

Revenue from North America and Asia Pacific accounted for 48% and 45% of 4Q16 sales, respectively.

Revenue Breakdown by Region
Region	4Q16		3Q16		2Q16		1Q16		4Q15
North America	48	%	52	%	49	%	48	%	47	%
Asia Pacific	45	%	42	%	45	%	45	%	37	%
Europe	4	%	4	%	4	%	3	%	6	%
Japan	3	%	2	%	2	%	4	%	10	%

28nm revenue contribution increased to 22% in 4Q16, reflecting stable wafer demand. 40nm accounted for 26% of sales as the wafer revenue from 28nm and 40nm remained at 48%.

Revenue Breakdown by Geometry
Geometry	4Q16		3Q16		2Q16		1Q16		4Q15
28nm and below	22	%	21	%	17	%	8	%	11	%
28nm<x<=40nm	26	%	27	%	26	%	29	%	24	%
40nm<x<=65nm	14	%	15	%	18	%	19	%	23	%
65nm<x<=90nm	3	%	4	%	4	%	4	%	4	%
90nm<x<=0.13um	11	%	11	%	11	%	12	%	12	%
0.13um<x<=0.18um	11	%	11	%	12	%	13	%	11	%
0.18um<x<=0.35um	10	%	8	%	9	%	12	%	12	%
0.5um and above	3	%	3	%	3	%	3	%	3	%

Revenue from fabless customers remained at 93% of revenue for 4Q16.

Revenue Breakdown by Customer Type
Customer Type	4Q16		3Q16		2Q16		1Q16		4Q15
Fabless	93	%	93	%	93	%	91	%	85	%
IDM	7	%	7	%	7	%	9	%	15	%

Revenue from the communication segment was 53% of sales, while consumer business remained at 26%. Computing segment increased to 13%, partly driven by tablet computing products.

Revenue Breakdown by Application ^(1)
Application	4Q16		3Q16		2Q16		1Q16		4Q15
Computer	13	%	12	%	11	%	15	%	11	%
Communication	53	%	55	%	55	%	48	%	52	%
Consumer	26	%	26	%	27	%	30	%	29	%
Others	8	%	7	%	7	%	7	%	8	%

⁽¹⁾ Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) slightly decreased during 4Q16.

(To view ASP trend, visit http://www.umc.com/english/investors/4Q16_ASP_trend.asp)

Shipment and Utilization Rate³ for Foundry Segment

Wafer shipments increased 5.5% to 1,656K in 4Q16. Quarterly capacity increased 1.1% QoQ to 1,794K, leading to an overall utilization rate of 94% in 4Q16.

Wafer Shipments
	4Q16		3Q16		2Q16		1Q16		4Q15
Wafer Shipments (8” K equivalents)	1,656		1,569		1,514		1,432		1,384
Quarterly Capacity Utilization Rate
	4Q16		3Q16		2Q16		1Q16		4Q15
Utilization Rate	94	%	89	%	89	%	82	%	83	%
Total Capacity (8” K equivalents)	1,794		1,774		1,723		1,692		1,690

Capacity⁴ for Foundry Segment

Overall capacity in the fourth quarter increased to 1,794K 8-inch equivalent wafers. Estimated capacity in the first quarter will slightly decrease to 1,749K 8-inch equivalent wafers, mainly due to capacity conversion to 40nm at Fab 12i and fewer working days.

Annual Capacity in thousands of wafers											Quarterly Capacity in thousands of wafers
FAB		Geometry (um)	2016		2015		2014		2013		FAB	1Q17E	4Q16	3Q16	2Q16
WTK	6"	3.5 – 0.45	423		421		448		448		WTK	104	106	106	106
Fab 8A	8"	0.5 – 0.25	827		813		813		813		Fab 8A	204	207	207	207
Fab 8C	8"	0.35 – 0.11	348		347		347		347		Fab 8C	86	87	87	87
Fab 8D	8"	0.13 – 0.09	342		341		358		382		Fab 8D	84	86	86	86
Fab 8E	8"	0.5 – 0.18	419		418		418		418		Fab 8E	103	105	105	105
Fab 8F	8"	0.18 – 0.11	401		388		388		388		Fab 8F	100	102	102	100
Fab 8S	8"	0.18 – 0.11	336		335		335		335		Fab 8S	83	84	84	84
Fab 8N	8"	0.5 – 0.11	750		667		547		469		Fab 8N	185	188	188	188
Fab 12A	12"	0.13 – 0.028	885		793		700		651		Fab 12A	229	233	233	214
Fab 12i	12”	0.13 – 0.040	584		572		573		550		Fab 12i	137	148	148	144
Fab 12X	12”	0.040	9		-		-		-		Fab 12X	10	9	-	-
Total^(1)			6,983		6,617		6,323		6,107		Total	1,749	1,794	1,774	1,723
YoY Growth Rate			6	%	5	%	4	%	11	%

⁽¹⁾One 6-inch wafer is converted into 0.5625(6²/8²) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12²/8²) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

CAPEX spending in 4Q16 totaled US$689 million, bringing the spending for the full year 2016 to US$2.8 billion. Full year 2017 CAPEX plan is budgeted for US$2.0 billion.

Capital Expenditure by Year - in US$ billion
Year		2016		2015		2014		2013		2012
CAPEX	$	2.8	$	1.9	$	1.4	$	1.1	$	1.7
2012 figures account for UMC parent company only.

2017 CAPEX Plan
8"		12"		Total
9	%	91	%	US$2.0 billion

Brief Summary of Full Year 2016 Consolidated Results

• Consolidated revenue increased 2.1% YoY to NT$147.87 billion, up from NT$144.83 billion in 2015. Foundry segment revenue in 2016 increased 4.0% YoY to NT$147.44 billion, from NT$141.71 billion in 2015.
• Gross margin was 20.5%, compared to 21.9% in 2015.
• Operating margin was 4.2%, compared to 7.5% in 2015.
• Net income attributable to stockholders of the parent was NT$8.32 billion in 2016.
• EPS was NT$0.68, or EPADS was US$0.105 for 2016.
• The contribution from 28nm technologies increased to 17% in 2016 from 10% in 2015. The revenue from 40nm in 2016 increased to 27%.

Operating Results
(Amount: NT$ million)	2016		2015		YoY % change
Net Operating Revenues	147,870		144,830		2.1
Gross Profit	30,379		31,769		(4.4	)
Operating Expenses	(23,922	)	(19,969	)	19.8
Net Other Operating Income & Expenses	(263	)	(964	)	(72.7	)
Operating Income	6,194		10,836		(42.8	)
Net Non-Operating Income & Expenses	(1,347	)	2,876		-
Income Tax Expenses	(984	)	(876	)	12.3
Net Income Attributable to Stockholders of the Parent	8,316		13,449		(38.2	)
EPS (NT$ per share)	0.68		1.08
(US$ per ADS)	0.105		0.167

Annual Sales Breakdown in Revenue for Foundry Segment

Region	2016		2015
North America	49	%	46	%
Asia Pacific	44	%	40	%
Europe	4	%	7	%
Japan	3	%	7	%
Technology	2016		2015
28nm and below	17	%	10	%
28nm<x<=40nm	27	%	24	%
40nm<x<=65nm	16	%	22	%
65nm<x<=90nm	4	%	5	%
90nm<x<=0.13um	11	%	13	%
0.13um<x<=0.18um	12	%	11	%
0.18um<x<=0.35um	10	%	12	%
0.5um and above	3	%	3	%
Customer Type	2016		2015
Fabless	92	%	88	%
IDM	8	%	12	%
Application	2016		2015
Computer	13	%	12	%
Communication	53	%	54	%
Consumer	27	%	28	%
Others	7	%	6	%

First Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To decrease by approximately 1%
• ASP in NTD: To decrease by approximately 3%
• Profitability: Gross profit margin will be in the mid-teens % range
• Foundry Segment Capacity Utilization: Approximately 90%
• 2017 CAPEX for Foundry Segment: US$2.0bn

Recent Developments / Announcements

Dec 19, 2016	Cypress Ships MCUs Based on eCT Embedded Flash Manufactured at UMC
Nov 16, 2016	UMC Holds Grand Opening Ceremony for New 12-inch Wafer Fab in China
Oct 27, 2016	UMC Statement on Recent Media Report
Oct 26, 2016	UMC 3Q 2016 Financial Results

Please visit UMC’s website for further details regarding the above announcements

Conference Call / Webcast Announcement

Monday, January 23, 2017

Time: 5:00 PM (Taipei) / 4:00 AM (New York) / 09:00 AM (London)

Dial-in numbers and Access Codes:

USA Toll Free:	1-800 871-3110, 1-888 700-7397
Taiwan Number:	02-2192-8016
Other Areas:	[phone]
Access Code:	UMC

A live webcast and replay of the 4Q16 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s robust foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include volume production 28nm gate-last High-K/Metal Gate technology, ultra-low power platform processes specifically engineered for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for production of ICs found in cars. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce over 500,000 wafers per month. The company employs nearly 19,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

- FINANCIAL TABLES TO FOLLOW -

¹ Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending Dec 31, 2016, the three-month period ending Sep 30, 2016, and the equivalent three-month period that ended Dec 31, 2015. For all 4Q16 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Dec 31, 2016 exchange rate of NT$ 32.25 per U.S. Dollar.

² Revenue in this section represents wafer sales

³ Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

⁴ Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of December 31, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	December 31, 2016
	US$		NT$		%
Assets
Current assets
Cash and cash equivalents	1,785		57,579		14.9	%
Financial assets at fair value through profit or loss, current	22		714		0.2	%
Notes & Accounts receivable, net	715		23,046		6.0	%
Inventories, net	527		16,998		4.4	%
Other current assets	376		12,133		3.1	%
Total current assets	3,425		110,470		28.6	%
Non-current assets
Funds and investments	1,078		34,766		9.0	%
Property, plant and equipment	6,976		224,983		58.2	%
Other non-current assets	510		16,436		4.2	%
Total non-current assets	8,564		276,185		71.4	%
Total assets	11,989		386,655		100.0	%
Liabilities
Current liabilities
Short-term loans	637		20,551		5.3	%
Financial liabilities at fair value through profit or loss, current	2		61		0.0	%
Payables	1,162		37,476		9.7	%
Current portion of long-term liabilities	326		10,501		2.7	%
Other current liabilities	105		3,389		0.9	%
Total current liabilities	2,232		71,978		18.6	%
Non-current liabilities
Bonds payable	1,069		34,482		8.9	%
Long-term loans	814		26,247		6.8	%
Other non-current liabilities	1,091		35,206		9.1	%
Total non-current liabilities	2,974		95,935		24.8	%
Total liabilities	5,206		167,913		43.4	%
Equity
Equity attributable to the parent company
Capital	3,915		126,243		32.7	%
Additional paid-in capital	1,271		40,997		10.6	%
Retained earnings, unrealized gain or loss on available-for-sale financial assets and exchange differences on translation of foreign operations	1,676		54,059		13.9	%
Treasury stock	(146	)	(4,719	)	(1.2	%)
Total equity attributable to the parent company	6,716		216,580		56.0	%
Non-controlling interests	67		2,162		0.6	%
Total equity	6,783		218,742		56.6	%
Total liabilities and equity	11,989		386,655		100.0	%
Note：New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
	Year over Year Comparison										Quarter over Quarter Comparison
	Three-Month Period Ended										Three-Month Period Ended
	December 31, 2016				December 31, 2015				Chg.		December 31, 2016				September 30, 2016				Chg.
	US$		NT$		US$		NT$		%		US$		NT$		US$		NT$		%
Net operating revenues	1,188		38,306		1,050		33,849		13.2	%	1,188		38,306		1,183		38,164		0.4	%
Operating costs	(916	)	(29,547	)	(834	)	(26,870	)	10.0	%	(916	)	(29,547	)	(926	)	(29,863	)	(1.1	%)
Gross profit	272		8,759		216		6,979		25.5	%	272		8,759		257		8,301		5.5	%
	22.9	%	22.9	%	20.6	%	20.6	%			22.9	%	22.9	%	21.8	%	21.8	%
Operating expenses
- Sales and marketing expenses	(40	)	(1,282	)	(32	)	(1,044	)	22.8	%	(40	)	(1,282	)	(37	)	(1,207	)	6.2	%
- General and administrative expenses	(47	)	(1,521	)	(29	)	(916	)	66.0	%	(47	)	(1,521	)	(55	)	(1,769	)	(14.0	%)
- Research and development expenses	(118	)	(3,824	)	(96	)	(3,105	)	23.2	%	(118	)	(3,824	)	(105	)	(3,397	)	12.6	%
Subtotal	(205	)	(6,627	)	(157	)	(5,065	)	30.8	%	(205	)	(6,627	)	(197	)	(6,373	)	4.0	%
Net other operating income and expenses	4		144		(1	)	(34	)	-		4		144		(14	)	(443	)	-
Operating income	71		2,276		58		1,880		21.1	%	71		2,276		46		1,485		53.3	%
	5.9	%	5.9	%	5.6	%	5.6	%			5.9	%	5.9	%	3.9	%	3.9	%
Net non-operating income and expenses	(38	)	(1,210	)	28		906		-		(38	)	(1,210	)	14		466		-
Income from continuing operations before income tax	33		1,066		86		2,786		(61.7	%)	33		1,066		60		1,951		(45.4	%)
	2.8	%	2.8	%	8.2	%	8.2	%			2.8	%	2.8	%	5.1	%	5.1	%
Income tax benefit (expense)	(19	)	(617	)	9		285		-		(19	)	(617	)	(6	)	(195	)	216.4	%
Net income	14		449		95		3,071		(85.4	%)	14		449		54		1,756		(74.4	%)
	1.2	%	1.2	%	9.1	%	9.1	%			1.2	%	1.2	%	4.6	%	4.6	%
Other comprehensive income (loss)	(18	)	(591	)	55		1,776		-		(18	)	(591	)	(68	)	(2,213	)	(73.3	%)
Total comprehensive income (loss)	(4	)	(142	)	150		4,847		-		(4	)	(142	)	(14	)	(457	)	(68.9	%)
Net income attributable to:
Stockholders of the parent	79		2,548		98		3,160		(19.4	%)	79		2,548		92		2,975		(14.4	%)
Non-controlling interests	(65	)	(2,099	)	(3	)	(89	)	2,258.4	%	(65	)	(2,099	)	(38	)	(1,219	)	72.2	%
Comprehensive income (loss) attributable to:
Stockholders of the parent	59		1,902		154		4,961		(61.7	%)	59		1,902		25		802		137.2	%
Non-controlling interests	(63	)	(2,044	)	(4	)	(114	)	1,693.0	%	(63	)	(2,044	)	(39	)	(1,259	)	62.4	%
Earnings per share-basic	0.007		0.21		0.008		0.25				0.007		0.21		0.007		0.24
Earnings per ADS ^(2)	0.033		1.05		0.039		1.25				0.033		1.05		0.037		1.20
Weighted average number of shares
outstanding (in millions)			12,208				12,408						12,208				12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
	For the Three-Month Period Ended						For the Twelve-Month Period Ended
	December 31, 2016						December 31, 2016
	US$		NT$		%		US$		NT$		%
Net operating revenues	1,188		38,306		100.0	%	4,585		147,870		100.0	%
Operating costs	(916	)	(29,547	)	(77.1	%)	(3,643	)	(117,491	)	(79.5	%)
Gross profit	272		8,759		22.9	%	942		30,379		20.5	%
Operating expenses
- Sales and marketing expenses	(40	)	(1,282	)	(3.3	%)	(142	)	(4,589	)	(3.1	%)
- General and administrative expenses	(47	)	(1,521	)	(4.0	%)	(180	)	(5,801	)	(3.9	%)
- Research and development expenses	(118	)	(3,824	)	(10.0	%)	(420	)	(13,532	)	(9.1	%)
Subtotal	(205	)	(6,627	)	(17.3	%)	(742	)	(23,922	)	(16.1	%)
Net other operating income and expenses	4		144		0.3	%	(8	)	(263	)	(0.2	%)
Operating income	71		2,276		5.9	%	192		6,194		4.2	%
Net non-operating income and expenses	(38	)	(1,210	)	(3.1	%)	(42	)	(1,347	)	(0.9	%)
Income from continuing operations before income tax	33		1,066		2.8	%	150		4,847		3.3	%
Income tax expense	(19	)	(617	)	(1.6	%)	(30	)	(984	)	(0.7	%)
Net income	14		449		1.2	%	120		3,863		2.6	%
Other comprehensive income (loss)	(18	)	(591	)	(1.6	%)	(136	)	(4,365	)	(2.9	%)
Total comprehensive income (loss)	(4	)	(142	)	(0.4	%)	(16	)	(502	)	(0.3	%)
Net income attributable to:
Stockholders of the parent	79		2,548		6.7	%	258		8,316		5.6	%
Non-controlling interests	(65	)	(2,099	)	(5.5	%)	(138	)	(4,453	)	(3.0	%)
Comprehensive income (loss) attributable to:
Stockholders of the parent	59		1,902		5.0	%	124		3,983		2.7	%
Non-controlling interests	(63	)	(2,044	)	(5.4	%)	(140	)	(4,485	)	(3.0	%)
Earnings per share-basic	0.007		0.21				0.021		0.68
Earnings per ADS ^(2)	0.033		1.05				0.105		3.40
Weighted average number of shares outstanding (in millions)			12,208						12,289
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Twelve-Month Period Ended December 31, 2016
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	US$		NT$
Cash flows from operating activities :
Net income before tax	150		4,847
Depreciation & Amortization	1,612		51,984
Gain on disposal of investments	(65	)	(2,098	)
Changes in notes & accounts receivable	(114	)	(3,690	)
Changes in prepayments	(293	)	(9,456	)
Changes in payables	40		1,304
Changes in other current liabilities	43		1,398
Changes in assets, liabilities and others	139		4,483
Income tax paid	(72	)	(2,322	)
Net cash provided by operating activities	1,440		46,450
Cash flows from investing activities :
Proceeds from disposal of available-for-sale financial assets	112		3,626
Acquisition of property, plant and equipment	(2,839	)	(91,561	)
Acquisition of intangible assets	(48	)	(1,554	)
Others	292		9,403
Net cash used in investing activities	(2,483	)	(80,086	)
Cash flows from financing activities :
Increase in short-term loans	469		15,129
Proceeds from long-term loans	764		24,629
Repayments of long-term loans	(236	)	(7,624	)
Increase in other financial liabilities	495		15,979
Cash dividends	(214	)	(6,907	)
Treasury stock acquired	(74	)	(2,396	)
Others	(1	)	(15	)
Net cash provided by financing activities	1,203		38,795
Effect of exchange rate changes on cash and cash equivalents	(27	)	(870	)
Net Increase in cash and cash equivalents	133		4,289
Cash and cash equivalents at beginning of period	1,652		53,290
Cash and cash equivalents at end of period	1,785		57,579
Note: New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2016 exchange rate of NT $32.25 per U.S. Dollar.