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Cash Flow Summary
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(Amount: NT$ million) For the 3-Month For the 3-Month
Period Ended June Period Ended Mar.
30, 2003 31, 2003
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Cash Flow from Operations 12,867 7,449
Net Income (Loss) 2,687 403
Depreciation & Amortization 9,369 9,164
Changes in working capital 1,508 (2,495)
Others (697) 377
Cash Flow from Investing 1,007 (7,622)
Capital Expenditures (2,593) (2,827)
Others 3,600 (4,795)
Cash Flow from Financing 7,783 (3,736)
Net Cash Flow 21,657 (3,909)
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Cash and equivalents increased by NT$22.37 billion to NT$74.94 billion. This is mostly due to increased revenue and our NT$15 billion bond issue as highlighted above. Notes & accounts receivable increased by NT$560 million QoQ to NT$12.94 billion, mainly due to significant revenue growth during the quarter. On a sequential basis, days sales outstanding(1) decreased to 53 days, and inventory turns decreased to 44 days.
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Current Assets
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(Amount: NT$ Bn) 2Q03 1Q03 2Q02
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Cash & Equiv. 74.94 52.57 61.39
Notes & Accounts Receivable 12.94 12.38 12.17
Days Sales Outstanding 53 55 47
Inventories 7.50 8.15 7.43
Inventory Turns 44 49 46
Total Current Assets 102.89 85.79 93.71
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(2) Days Sales Outstanding = 365/ (Operating revenues for three-month
period end *4)/ (Beginning NR&AR balance, net + Ending NR&AR
balance, net)/2) Inventory Turns = 365/(COGS for three-month
period end *4)/(Beginning Inventory balance, net + Ending
Inventory balance, net)/2)
Total debt increased by NT$ 9.41 billion to NT$86.20 billion in 2Q03. The increase was due to the net effect of the Company's NT$15 billion bond issue and the payback of NT$5.2 billion in long-term loans. The decision to issue bonds and reduce loan exposure was taken to reduce overall interest expense while enhancing operating capital. As a result, UMC's debt to equity ratio increased to 40%.
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Liabilities
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(Amount: NT$ Bn) 2Q03 1Q03 2Q02
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Total Current Liabilities 31.05 30.07 29.25
Accounts Payable 3.76 3.01 3.58
Short-term Credit / Bonds 15.27 16.03 5.85
Others 12.02 11.03 19.82
Long-term Liabilities 51.09 42.76 57.06
Total Debts 86.20 76.79 89.79
Debt to Equity 40% 36% 42%
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Blended Average Selling Price Trend
The blended average selling price (ASP) for the second quarter declined 1% compared with 1Q03, and was in line with the QoQ ASP guidance previously provided by UMC. For the quarter, wafer price per technology node was for the most part stable. Pricing for 0.15-micron technology products declined slightly due to several new large volume orders in the PC segment.
(To view ASP trend, visit umc.com
CAPEX
For fiscal year 2003, planned capital expenditure (UMC only) is US$500 million. By the end of the second quarter of 2003, UMC's YTD capex totaled US$157 million. The updated breakdown of our full year budget is 50% on Fab12A capacity expansion, 20% on R&D facilities and the remaining 30% on upgrading 8-inch wafer fabs.
Capital Expenditure by Year
CAPEX Plan - in Billions of US$
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Year 1998 1999 2000 2001 2002 2003E
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$1.70 $1.90 $2.80 $1.10 $0.8 $0.5
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UMC is committed to expanding its 300mm capacity. By the end of 2004, the Company plans to bring total capacity at Fab12A to 20,000 wafers per month, and total capacity at UMCi to 10,000 wafers per month. Between July 2003 and the end of 2004, UMC plans to invest approximately US$500 million in Fab12A and US$1.0 billion in UMCi.
12-inch Capacity Expansion Plan
300mm CAPEX Plan from July 2003 to the End of 2004
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Fab12A UMCi
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CAPEX (US$ million) 500(um) 1,000(um)
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Capacity Target at the End of 2004 (pieces of 300mm
wafers / month) 20,000 10,000
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Analysis of Revenue(3)
The percentage of revenue contributed from North America grew to 43% in 2Q03 mainly due to new product launches by customers. The percentage of revenue from Europe declined to 14% due to inventory adjustments from sizeable European customers.
REVENUE BREAKDOWN BY REGION
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Region 2Q023Q024Q021Q032Q03
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North America 35% 43% 41% 39% 43%
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Asia Pacific 50% 34% 41% 40% 39%
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Europe 11% 20% 15% 18% 14%
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Japan 4% 3% 3% 3% 4%
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The percentage of revenue from 0.18-micron and below technologies in the second quarter was 38%. The percentage of revenue from 0.15-micron sales increased to 8%, compared with 3% in 1Q03, mainly due to stronger PC demand.
REVENUE BREAKDOWN BY TECHNOLOGY
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Technology 2Q023Q024Q021Q032Q03
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0.13um 1% 2% 6% 7% 6%
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0.15um 5% 9% 8% 3% 8%
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0.15um less than x less than=0.18um 17% 26% 22% 28% 24%
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0.18um less thanx less than= 0.25um 28% 25% 23% 25% 22%
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0.25um less thanx less than= 0.35um 33% 22% 27% 25% 28%
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0.5um and above 16% 16% 14% 12% 12%
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IDM orders accounted for 22% of total net wafer sales. The percentage of revenue from IDM sales declined to 22% due to inventory adjustments from European IDM customers in 2Q03.
REVENUE BREAKDOWN BY CUSTOMER TYPE
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Customer Type 2Q023Q024Q021Q032Q03
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Fabless 82% 71% 75% 71% 78%
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IDM 17% 28% 24% 29% 22%
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System 1% 1% 1% 0% 0%
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Revenue from the computer market segment increased significantly, and accounted for 31% of total revenue in 2Q03. Most of the increase was due to order growth in chipsets and graphic cards.
REVENUE BREAKDOWN BY APPLICATION(1)
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Application 2Q023Q024Q021Q032Q03
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Computer 29% 24% 25% 27% 31%
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Communication 25% 37% 40% 40% 36%
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Consumer 37% 31% 28% 28% 28%
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Memory 7% 6% 5% 4% 3%
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Others 2% 2% 2% 1% 2%
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(3) Revenue in this section represents net wafer sales. All revenue
breakdown tables exclude JV's and subsidiaries.
Capacity(4)
Capacity for 2Q03 was 647 thousand eight-inch equivalent wafers. Capacity at Fab 8AB decreased due to changes in product mix and the retirement of a small amount of equipment. Estimated 3Q03 capacity is 632 thousand eight-inch equivalent wafers.
Annual Capacity in thousands of 8-inch wafer equivalents,
excluding JV's & subsidiaries
Geometry
FAB (um) 2000 2001 2002 2003E
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greater
Fab 5A(1) 5" than0.8 33 -- -- --
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Fab 6A 6" 3.5 - 0.45 348 345 349 336
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Fab 8AB 8" 0.5 - 0.25 926 943 853 769
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Fab 8C 8" 0.35 - 0.15 416 460 355 318
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Fab 8D 8" 0.18 - 0.09 94 290 214 246
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Fab 8E 8" 0.5 - 0.18 373 474 376 319
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Fab 8F 8" 0.25 - 0.15 139 351 312 356
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Fab 12A 12"0.18 - 0.13 -- 22 119 227
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Total (2) 2,329 2,885 2,578 2,571
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YoY Growth Rate 41% 24% -11% 0%
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(1) Fab 5A was sold in 2Q00
(2) One 6-inch wafer is converted into 0.5625 8-inch equivalent wafer;
one 12-inch wafer is converted into 2.25 8-inch equivalent wafers.
Quarterly Capacity Plan by fab in thousands of 8-inch wafer
equivalents excluding JV's & subsidiaries
FAB 4Q021Q032Q033Q03E4Q03E
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Fab 6A 89 88 88 80 80
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Fab 8AB 216 216 195 182 176
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Fab 8C 83 75 75 84 84
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Fab 8D 53 63 63 60 60
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Fab 8E 92 83 83 78 75
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Fab 8F 86 89 89 90 88
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Fab 12A 54 54 54 58 61
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Total 673 668 647 632 624
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Shipment and Utilization Rate
Wafer shipments exceeded previously released guidance and increased by 104 thousand 8-inch equivalent wafers, representing a 23.3% sequential increase.
Wafer Shipments
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2Q023Q024Q021Q032Q03
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Wafer Shipments (K 8-inch eq.) 467 435 434 446 550
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Utilization for the quarter was 85%, better than the approximately 80% we expected in previously provided guidance.
Quarterly Capacity Utilization Rate
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2Q023Q024Q021Q032Q03
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Utilization rate 72% 68% 64% 67% 85%
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Total Capacity (K 8-inch
eq.) 649 640 673 668 647
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(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 ups. Quarterly utilization rate =
Quarterly wafer out / Estimated quarterly capacity.
Long-term Investments(5)
UMC Consolidated Long-term Investments as of June 30, 2003
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