UMC Reports Fourth Quarter 2017 Results

Full-year foundry revenue in USD increased 7%YoY

Fourth Quarter 2017 Overview¹:

• Revenue: NT$36.63 billion (US$1.23 billion)
• Gross margin: 17.2%
• Foundry revenue from 28nm: 15%; Foundry operating margin: 5.4%
• Foundry capacity utilization rate: 90%
• Net income attributable to stockholders of the parent: NT$1.77 billion (US$59 million)
• Earnings per share: NT$0.15; earnings per ADS: US$0.025

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 2017.

Fourth quarter consolidated revenue was NT$36.63 billion, down 2.8% from NT$37.70 billion in 3Q17 and decreased 4.4% YoY from NT$38.31 billion in 4Q16. The consolidated gross margin in 4Q17 was 17.2%. Net income attributable to stockholders of the parent was NT$1.77 billion, with earnings per ordinary share of NT$0.15.

Jason Wang, co-president of UMC, said, “In the fourth quarter of 2017, UMC’s foundry revenue was NT$36.54 billion. During the quarter, our capacity utilization from legacy 8” and 12” technologies continued to reflect robust demand, despite a decrease in 28nm HKMG contribution. The utilization rate of 90% led to overall wafer shipments of 1.67 million 8-inch equivalents. For the full year of 2017, UMC posted a 7% YoY revenue increase in US dollars as wafer shipments increased nearly 11% annually. As a result, our 2017 net income of the parent company grew nearly 16% year on year, despite experiencing unfavorable movement of the NT dollar in the foreign exchange markets.”

Co-president Wang continued, “Looking into the first quarter of 2018, we anticipate our foundry business to remain relatively flat. We are continuing our efforts to capture new 28nm business by working to secure new design opportunities, which will help rebuild our 28nm momentum as these new product tape outs are expected to enter production in the following months. In addition, we will leverage our manufacturing excellence to invest in areas with better ROI potential, including 12” mature technologies as well as tool and equipment upgrades at 8” facilities. As such, our 2018 CAPEX budget will be approximately US$1.1 billion. I believe our approach to optimizing the offerings across 8” and 12” mature technologies while moderating the pace of leading edge expansion will lead to sound financial performance that will preserve the best interests of our shareholders and employees.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)	4Q17	3Q17	QoQ % change	4Q16	YoY % change
Net Operating Revenues	36,631	37,698	(2.8)	38,306	(4.4)
Gross Profit	6,298	6,592	(4.5)	8,759	(28.1)
Operating Expenses	(5,198)	(5,404)	(3.8)	(6,627)	(21.6)
Net Other Operating Income and Expenses	801	441	81.6	144	456.3
Operating Income (Loss)	1,901	1,629	16.7	2,276	(16.5)
Net Non-Operating Income and Expenses	(152)	1,236	-	(1,210)	(87.4)
Net Income Attributable to Stockholders of the Parent	1,771	3,473	(49.0)	2,548	(30.5)
EPS (NT$ per share)	0.15	0.28		0.21
(US$ per ADS)	0.025	0.047		0.035

Net operating revenues in 4Q17 declined 2.8% to NT$36.63 billion, including NT$36.54 billion from the foundry segment. Revenue contribution from 40nm and below technologies remained at 45%. Gross profit declined 4.5% to NT$6.30 billion, or 17.2% of revenue. Operating expenses decreased 3.8% to NT$5.20 billion. Net other operating income was NT$801 million, leading to operating income of NT$1.90 billion. Net non-operating expense was NT$0.15 billion. Net income attributable to stockholders of the parent was NT$1.77 billion.

Earnings per ordinary share for the quarter was NT$0.15. Earnings per ADS was US$0.025. The basic weighted average number of outstanding shares in 4Q17 was 12,208,239,978, compared with 12,208,239,978 shares in 3Q17 and 12,208,239,978 shares in 4Q16. The diluted weighted average number of outstanding shares was 13,474,873,551 in 4Q17, compared with 13,441,188,010 shares in 3Q17 and 13,442,173,503 shares in 4Q16. The fully diluted share count on December 31, 2017 was approximately 13,890,953,000. On December 31, 2017, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million)	4Q17	3Q17	QoQ % change	4Q16	YoY % change
Net Operating Revenues	36,631	37,698	(2.8)	38,306	(4.4)
COGS	(30,333)	(31,106)	(2.5)	(29,547)	2.7
Depreciation	(10,990)	(11,145)	(1.4)	(11,314)	(2.9)
Other Mfg. Costs	(19,343)	(19,961)	(3.1)	(18,233)	6.1
Gross Profit	6,298	6,592	(4.5)	8,759	(28.1)
Gross Margin (%)	17.2%	17.5%		22.9%
Operating Expenses	(5,198)	(5,404)	(3.8)	(6,627)	(21.6)
G&A	(1,164)	(991)	17.5	(1,521)	(23.5)
Sales & Marketing	(944)	(1,070)	(11.8)	(1,282)	(26.4)
R&D	(3,090)	(3,343)	(7.6)	(3,824)	(19.2)
Net Other Operating Income & Expenses	801	441	81.6	144	456.3
Operating Income	1,901	1,629	16.7	2,276	(16.5)

Net operating revenues decreased 2.8% to NT$36.63 billion. COGS decreased to NT$30.33 billion, as depreciation declined 1.4% to NT$10.99 billion. Other manufacturing costs fell 3.1% to NT$19.34 billion. Gross profit was NT$6.30 billion. Operating expenses declined 3.8% to NT$5.20 billion. General and Administrative (G&A) expenses increased 17.5% to NT$1.16 billion. Sales & Marketing fell 11.8% to NT$0.94 billion and R&D expense decreased 7.6% to NT$3.09 billion, or 8.4% of net operating revenues. Net other operating income was NT$801 million, leading to an operating income of NT$1.90 billion.

Non-Operating Income and Expenses
(Amount: NT$ million)	4Q17	3Q17	4Q16
Non-Operating Income and Expenses	(152)	1,236	(1,210)
Net Interest Income and Expenses	(542)	(538)	(418)
Net Investment Gain and Loss	(80)	478	(1,138)
Gain and Loss on Disposal of Investment	(22)	538	1,023
Exchange Gain and Loss	500	776	(496)
Other Gain and Loss	(8)	(18)	(181)

Net non-operating expense in 4Q17 was NT$152 million, which primarily resulted from the difference in the exchange gain of NT$500 million offset by an NT$542 million in net interest expense and net investment loss of NT$80 million.

Cash Flow Summary
(Amount: NT$ million)	For the 3-Month Period Ended Dec. 31, 2017	For the 3-Month Period Ended Sep. 30, 2017
Cash Flow from Operating Activities	12,899	11,447
Net income before tax	1,749	2,865
Depreciation & Amortization	13,227	13,487
Loss (gain) on disposal of investments	22	(538)
Impairment loss on financial assets	254	300
Exchange gain on financial assets and liabilities	(642)	(541)
Changes in working capital	(655)	(2,971)
Income tax paid	(152)	(933)
Other	(904)	(222)
Cash Flow from Investing Activities	(6,034)	(4,984)
Capital expenditures	(10,961)	(7,288)
Proceeds from disposal of AFS financial assets	313	563
Acquisition of intangible assets	(360)	(251)
Other	4,974	1,992
Cash Flow from Financing Activities	5,214	(4,604)
Bank loans	(41)	1,482
Bonds Issued	5,400	-
Cash dividends	9	(6,112)
Other	(154)	26
Effect of Exchange Rate	(343)	(54)
Net Cash Flow	11,736	1,805

Cash inflow from operating activities reached NT$12.90 billion. Cash outflow from investing activities totaled NT$6.03 billion, including NT$10.96 billion in CAPEX spending for the foundry segment, resulting in a free cash inflow of NT$1.94 billion. Cash inflow from financing activities was NT$5.21 billion, mainly from a NT$5.40 billion in bond issuance. Net cash inflow in 4Q17 was NT$11.74 billion. Over the next 12 months, the company expects to repay NT$2.52 billion in bank loans.

Current Assets
(Amount: NT$ billion)	4Q17	3Q17	4Q16
Cash and Cash Equivalents	81.68	69.94	57.58
Notes & Accounts Receivable	20.97	22.61	23.05
Days Sales Outstanding	54	54	54
Inventories, net	18.26	17.10	17.00
Days of Inventory	53	49	53
Total Current Assets	139.16	124.71	110.47

Cash and cash equivalents increased to NT$81.68 billion. Days of inventory increased to 53 days.

Liabilities
(Amount: NT$ billion)	4Q17	3Q17	4Q16
Total Current Liabilities	88.06	82.36	71.98
Notes & Accounts Payable	6.54	6.61	6.85
Short-Term Credit / Bonds	52.81	48.74	31.05
Payable on Equipment	4.67	5.23	15.04
Other	24.04	21.78	19.04
Long-Term Credit / Bonds	53.32	52.36	60.73
Long-Term Investment Liabilities	20.49	20.34	20.31
Total Liabilities	180.06	169.74	167.91
Debt to Equity	84%	79%	77%

Current liabilities increased to NT$88.06 billion, mainly resulting from an increase in Short-Term Credit/Bonds. Total liabilities increased to NT$180.06 billion, leading to a debt to equity ratio of 84%.

Analysis of Revenue² for Foundry Segment

Revenue Breakdown by Region
Region	4Q17	3Q17	2Q17	1Q17	4Q16
North America	43%	43%	42%	41%	48%
Asia Pacific	45%	47%	47%	50%	45%
Europe	9%	8%	7%	5%	4%
Japan	3%	2%	4%	4%	3%

Revenue from Asia Pacific declined to 45% while sales from North American customers remained flat at 43%. Revenue contribution from Japan increased to 3%.

Revenue Breakdown by Geometry
Geometry	4Q17	3Q17	2Q17	1Q17	4Q16
14nm and below	2%	1%	1%	0%	-
14nm<x<=28nm	15%	15%	17%	17%	22%
28nm<x<=40nm	28%	29%	28%	29%	26%
40nm<x<=65nm	12%	12%	12%	13%	14%
65nm<x<=90nm	5%	6%	5%	4%	3%
90nm<x<=0.13um	12%	12%	12%	11%	11%
0.13um<x<=0.18um	13%	12%	12%	13%	11%
0.18um<x<=0.35um	10%	10%	10%	10%	10%
0.5um and above	3%	3%	3%	3%	3%

14nm accounted for 2% of 4Q17 revenue, while 28nm contribution remained at 15%.

Revenue Breakdown by Customer Type
Customer Type	4Q17	3Q17	2Q17	1Q17	4Q16
Fabless	91%	90%	91%	93%	93%
IDM	9%	10%	9%	7%	7%

Fabless customers represented 91% of revenue in 4Q17.

Revenue Breakdown by Application ^(1)
Application	4Q17	3Q17	2Q17	1Q17	4Q16
Computer	13%	14%	14%	12%	13%
Communication	49%	47%	48%	51%	53%
Consumer	29%	31%	29%	28%	26%
Others	9%	8%	9%	9%	8%

Communication business increased to 49%. Revenue from the consumer segment declined to 29%.

⁽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) remained unchanged in 4Q17.

(To view ASP trend, visit http://www.umc.com/english/investors/4Q17_ASP_trend.asp)

Shipment and Utilization Rate³ for Foundry Segment

Wafer Shipments
	4Q17	3Q17	2Q17	1Q17	4Q16
Wafer Shipments (8” K equivalents)	1,670	1,748	1,741	1,678	1,656
Quarterly Capacity Utilization Rate
	4Q17	3Q17	2Q17	1Q17	4Q16
Utilization Rate	90%	96%	96%	96%	94%
Total Capacity (8” K equivalents)	1,886	1,861	1,816	1,742	1,794

During 4Q17, wafer shipments decreased 4.5% to 1,670K. Capacity increased by 1.3% QoQ to 1,886K, resulting in an overall utilization rate of 90% in 4Q17.

Capacity⁴ for Foundry Segment

Total capacity in the fourth quarter was 1,886K 8-inch equivalent wafers. We expect that first quarter capacity will decline to 1,858K 8-inch equivalent wafers, mainly due to fewer working days and tool maintenance.

Annual Capacity in thousands of wafers							Quarterly Capacity in thousands of wafers
FAB		Geometry (um)	2017	2016	2015	2014	FAB	1Q18E	4Q17	3Q17	2Q17
WTK	6"	3.5 – 0.45	422	423	421	448	WTK	104	106	106	106
Fab 8A	8"	0.5 – 0.25	825	827	813	813	Fab 8A	204	207	207	207
Fab 8C	8"	0.35 – 0.11	357	348	347	347	Fab 8C	91	92	92	87
Fab 8D	8"	0.13 – 0.09	341	342	341	358	Fab 8D	85	86	86	86
Fab 8E	8"	0.5 – 0.18	418	419	418	418	Fab 8E	103	105	105	105
Fab 8F	8"	0.18 – 0.11	417	401	388	388	Fab 8F	107	108	107	102
Fab 8S	8"	0.18 – 0.11	347	336	335	335	Fab 8S	92	93	87	84
Fab 8N	8"	0.5 – 0.11	753	750	667	547	Fab 8N	190	194	188	188
Fab 12A	12"	0.13 – 0.014	970	885	793	700	Fab 12A	246	250	247	247
Fab 12i	12"	0.13 – 0.040	537	584	572	573	Fab 12i	131	134	134	134
Fab 12X	12"	0.040 – 0.028	97	9	-	-	Fab 12X	35	35	33	19
Total^(1)			7,304	6,983	6,617	6,323	Total	1,858	1,886	1,861	1,816
YoY Growth Rate			5%	6%	5%	4%

⁽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

Capital Expenditure by Year - in US$ billion
Year	2017	2016	2015	2014	2013
CAPEX	$ 1.4	$ 2.8	$ 1.9	$ 1.4	$ 1.1

2018 CAPEX Plan
8"	12"	Total
33%	67%	US$1.1 billion

CAPEX spending in 4Q17 was US$364 million, bringing 2017’s total CAPEX to US$1.4 billion. Our 2018 CAPEX budget will be approximately US$1.1 billion.

Brief Summary of Full Year 2017 Consolidated Results

Operating Results
(Amount: NT$ million)	2017	2016	YoY % change
Net Operating Revenues	149,285	147,870	1.0
Gross Profit	27,058	30,379	(10.9)
Operating Expenses	(22,143)	(23,922)	(7.4)
Net Other Operating Income & Expenses	1,653	(263)	-
Operating Income	6,568	6,194	6.0
Net Non-Operating Income & Expenses	1,230	(1,347)	-
Income Tax Expenses	(1,167)	(984)	18.6
Net Income Attributable to Stockholders of the Parent	9,629	8,316	15.8
EPS (NT$ per share)	0.79	0.68
(US$ per ADS)	0.133	0.114

• Consolidated revenue in NTD increased 1.0% YoY to NT$149.29 billion, up from NT$147.87 billion in 2016.
• Gross margin was 18.1%, compared to 20.5% in 2016.
• Operating margin was 4.4%, compared to 4.2% in 2016.
• Net income attributable to stockholders of the parent was NT$9.63 billion in 2017.
• EPS was NT$0.79, or EPADS was US$0.133 for 2017.
• The contribution from 28nm technologies and below remained at 17% in 2017. The revenue from 40nm in 2017 increased to 28%.

Annual Sales Breakdown in Revenue for Foundry Segment

Region	2017	2016
North America	43%	49%
Asia Pacific	47%	44%
Europe	7%	4%
Japan	3%	3%
Technology	2017	2016
14nm and below	1%	-
14nm<x<=28nm	16%	17%
28nm<x<=40nm	28%	27%
40nm<x<=65nm	12%	16%
65nm<x<=90nm	5%	4%
90nm<x<=0.13um	12%	11%
0.13um<x<=0.18um	12%	12%
0.18um<x<=0.35um	10%	10%
0.5um and above	4%	3%
Customer Type	2017	2016
Fabless	91%	92%
IDM	9%	8%
Application	2017	2016
Computer	13%	13%
Communication	49%	53%
Consumer	29%	27%
Others	9%	7%

First Quarter of 2018 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To increase 2-4%
• ASP in USD: To decrease by approximately 2%
• Profitability: Gross profit margin will be in the low teens % range
• Foundry Segment Capacity Utilization: Approximately 90% range
• 2018 CAPEX for Foundry Segment: US$1.1 billion

Recent Developments / Announcements

Dec. 21, 2017 UMC Announces Availability of 40nm SST Embedded Flash Process   Nov. 30, 2017 UMC Fab 12i Wins Singapore’s National Water Efficiency Award   Nov. 15, 2017 Cypress Achieves Aerospace-Grade QML Certification for 65nm and 40nm SRAM at UMC   Oct. 30, 2017 UMC Obtains LEED Gold Certification for Fab 12X   Oct. 25, 2017 UMC 3Q 2017 Financial Results

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

Conference Call / Webcast Announcement   Wednesday, January 24, 2018   Time: 5:00 PM (Taipei) / 4:00 AM (New York) / 09:00 AM (London)
Dial-in numbers and Access Codes:
USA Toll Free:	1-866 836-0101
Taiwan Number:	02-2192-8016
Other Areas:	[phone]
Access Code:	UMC
A live webcast and replay of the 4Q17 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 comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 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.

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 December 31, 2017, the three-month period ending September 30, 2017, and the equivalent three-month period that ended December 31, 2016. For all 4Q17 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the December 31, 2017 exchange rate of NT$ 29.78 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.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of December 31, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	December 31, 2017
	US$	NT$	%
Assets
Current assets
Cash and cash equivalents	2,743	81,675	20.7%
Financial assets at fair value through profit or loss, current	24	717	0.2%
Notes & Accounts receivable, net	704	20,974	5.3%
Inventories, net	613	18,258	4.6%
Other current assets	589	17,536	4.5%
Total current assets	4,673	139,160	35.3%
Non-current assets
Funds and investments	1,143	34,040	8.6%
Property, plant and equipment	6,909	205,742	52.2%
Other non-current assets	509	15,157	3.9%
Total non-current assets	8,561	254,939	64.7%
Total assets	13,234	394,099	100.0%
Liabilities
Current liabilities
Short-term loans	854	25,446	6.5%
Payables	949	28,267	7.2%
Current portion of long-term liabilities	919	27,364	6.9%
Other current liabilities	235	6,984	1.8%
Total current liabilities	2,957	88,061	22.4%
Non-current liabilities
Bonds payable	795	23,676	6.0%
Long-term loans	995	29,643	7.5%
Other non-current liabilities	1,300	38,681	9.8%
Total non-current liabilities	3,090	92,000	23.3%
Total liabilities	6,047	180,061	45.7%
Equity
Equity attributable to the parent company
Capital	4,239	126,243	32.0%
Additional paid-in capital	1,372	40,859	10.4%
Retained earnings, unrealized gain or loss on available-for-sale financial assets and exchange differences on translation of foreign operations	1,702	50,698	12.9%
Treasury stock	(158)	(4,719)	(1.2%)
Total equity attributable to the parent company	7,155	213,081	54.1%
Non-controlling interests	32	957	0.2%
Total equity	7,187	214,038	54.3%
Total liabilities and equity	13,234	394,099	100.0%
Note：New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2017 exchange rate of NT $29.78 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, 2017		December 31, 2016		Chg.	December 31, 2017		September 30, 2017		Chg.
	US$	NT$	US$	NT$	%	US$	NT$	US$	NT$	%
Net operating revenues	1,230	36,631	1,286	38,306	(4.4%)	1,230	36,631	1,266	37,698	(2.8%)
Operating costs	(1,019)	(30,333)	(992)	(29,547)	2.7%	(1,019)	(30,333)	(1,045)	(31,106)	(2.5%)
Gross profit	211	6,298	294	8,759	(28.1%)	211	6,298	221	6,592	(4.5%)
	17.2%	17.2%	22.9%	22.9%		17.2%	17.2%	17.5%	17.5%
Operating expenses
- Sales and marketing expenses	(31)	(944)	(43)	(1,282)	(26.4%)	(31)	(944)	(36)	(1,070)	(11.8%)
- General and administrative expenses	(39)	(1,164)	(51)	(1,521)	(23.5%)	(39)	(1,164)	(33)	(991)	17.5%
- Research and development expenses	(104)	(3,090)	(129)	(3,824)	(19.2%)	(104)	(3,090)	(112)	(3,343)	(7.6%)
Subtotal	(174)	(5,198)	(223)	(6,627)	(21.6%)	(174)	(5,198)	(181)	(5,404)	(3.8%)
Net other operating income and expenses	27	801	5	144	456.3%	27	801	15	441	81.6%
Operating income	64	1,901	76	2,276	(16.5%)	64	1,901	55	1,629	16.7%
	5.2%	5.2%	5.9%	5.9%		5.2%	5.2%	4.3%	4.3%
Net non-operating income and expenses	(5)	(152)	(40)	(1,210)	(87.4%)	(5)	(152)	41	1,236	-
Income from continuing operations before income tax	59	1,749	36	1,066	64.1%	59	1,749	96	2,865	(39.0%)
	4.8%	4.8%	2.8%	2.8%		4.8%	4.8%	7.6%	7.6%
Income tax expense	(19)	(556)	(21)	(617)	(9.9%)	(19)	(556)	(13)	(401)	38.7%
Net income	40	1,193	15	449	165.7%	40	1,193	83	2,464	(51.6%)
	3.3%	3.3%	1.2%	1.2%		3.3%	3.3%	6.5%	6.5%
Other comprehensive income (loss)	(46)	(1,366)	(20)	(591)	131.1%	(46)	(1,366)	(36)	(1,068)	27.9%
Total comprehensive income (loss)	(6)	(173)	(5)	(142)	21.8%	(6)	(173)	47	1,396	-
Net income attributable to:
Stockholders of the parent	59	1,771	86	2,548	(30.5%)	59	1,771	117	3,473	(49.0%)
Non-controlling interests	(19)	(578)	(71)	(2,099)	(72.5%)	(19)	(578)	(34)	(1,009)	(42.7%)
Comprehensive income (loss) attributable to:
Stockholders of the parent	14	416	64	1,902	(78.1%)	14	416	81	2,402	(82.7%)
Non-controlling interests	(20)	(589)	(69)	(2,044)	(71.2%)	(20)	(589)	(34)	(1,006)	(41.5%)
Earnings per share-basic	0.005	0.15	0.007	0.21		0.005	0.15	0.009	0.28
Earnings per ADS ^(2)	0.025	0.75	0.035	1.05		0.025	0.75	0.047	1.40
Weighted average number of shares
outstanding (in millions)		12,208		12,208			12,208		12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2017 exchange rate of NT $29.78 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, 2017			December 31, 2017
	US$	NT$	%	US$	NT$	%
Net operating revenues	1,230	36,631	100.0%	5,013	149,285	100.0%
Operating costs	(1,019)	(30,333)	(82.8%)	(4,104)	(122,227)	(81.9%)
Gross profit	211	6,298	17.2%	909	27,058	18.1%
Operating expenses
- Sales and marketing expenses	(31)	(944)	(2.6%)	(142)	(4,234)	(2.8%)
- General and administrative expenses	(39)	(1,164)	(3.2%)	(143)	(4,240)	(2.8%)
- Research and development expenses	(104)	(3,090)	(8.4%)	(459)	(13,669)	(9.2%)
Subtotal	(174)	(5,198)	(14.2%)	(744)	(22,143)	(14.8%)
Net other operating income and expenses	27	801	2.2%	56	1,653	1.1%
Operating income	64	1,901	5.2%	221	6,568	4.4%
Net non-operating income and expenses	(5)	(152)	(0.4%)	41	1,230	0.8%
Income from continuing operations before income tax	59	1,749	4.8%	262	7,798	5.2%
Income tax expense	(19)	(556)	(1.5%)	(39)	(1,167)	(0.8%)
Net income	40	1,193	3.3%	223	6,631	4.4%
Other comprehensive income (loss)	(46)	(1,366)	(3.8%)	(136)	(4,034)	(2.7%)
Total comprehensive income (loss)	(6)	(173)	(0.5%)	87	2,597	1.7%
Net income attributable to:
Stockholders of the parent	59	1,771	4.8%	323	9,629	6.5%
Non-controlling interests	(19)	(578)	(1.5%)	(100)	(2,998)	(2.1%)
Comprehensive income (loss) attributable to:
Stockholders of the parent	14	416	1.1%	192	5,706	3.8%
Non-controlling interests	(20)	(589)	(1.6%)	(105)	(3,109)	(2.1%)
Earnings per share-basic	0.005	0.15		0.027	0.79
Earnings per ADS ^(2)	0.025	0.75		0.133	3.95
Weighted average number of shares outstanding (in millions)		12,208			12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2017 exchange rate of NT $29.78 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, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	US$	NT$
Cash flows from operating activities :
Net income before tax	262	7,798
Depreciation & Amortization	1,783	53,099
Exchange gain on financial assets and liabilities	(82)	(2,432)
Changes in prepayments	(68)	(2,014)
Changes in other current assets	(80)	(2,384)
Changes in assets, liabilities and others	6	174
Income tax paid	(59)	(1,767)
Net cash provided by operating activities	1,762	52,474
Cash flows from investing activities :
Proceeds from disposal of available-for-sale financial assets	73	2,160
Proceeds from capital reduction and liquidation of investments	71	2,102
Acquisition of property, plant and equipment	(1,485)	(44,236)
Acquisition of intangible assets	(43)	(1,284)
Others	195	5,842
Net cash used in investing activities	(1,189)	(35,416)
Cash flows from financing activities :
Increase in short-term loans	197	5,879
Proceeds from bonds issued	460	13,700
Redemption of bonds	(252)	(7,500)
Proceeds from long-term loans	403	12,001
Repayments of long-term loans	(255)	(7,603)
Cash dividends	(205)	(6,103)
Acquisition of subsidiaries	(44)	(1,309)
Others	4	97
Net cash provided by financing activities	308	9,162
Effect of exchange rate changes on cash and cash equivalents	(71)	(2,124)
Net Increase in cash and cash equivalents	810	24,096
Cash and cash equivalents at beginning of period	1,933	57,579
Cash and cash equivalents at end of period	2,743	81,675
Note: New Taiwan Dollars have been translated into U.S. Dollars at the December 31, 2017 exchange rate of NT $29.78 per U.S. Dollar.