聯華電子 (UMC) 2021 Q3 法說會逐字稿

Welcome, everyone, to UMC's 2021 Third Quarter Earnings Conference Call. (Operator Instructions) For your information, this conference call is now being broadcasted live over the Internet. Webcast replay will be available within an hour after the conference is finished. Please visit our website, www.umc.com, under the Investor Relations, Investors, Events section.

歡迎大家參加聯電 2021 年第三季度收益電話會議。 （操作員說明）供您參考，此電話會議現在正在互聯網上直播。會議結束後一小時內將提供網絡直播重播。請訪問我們的網站 www.umc.com，在“投資者關係”、“投資者”、“活動”部分下。

And now I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, please begin.

現在我想介紹一下聯華電子投資者關係主管Michael Lin先生。林先生，請開始。

Thank you, and welcome to the UMC's conference call for the third quarter of 2021. I'm joined by Mr. Jason Wang, the President of UMC; and Mr. Chitung Liu, the CFO of UMC. In a moment, we will hear our CFO present the third quarter financial results, followed by our President's key message to address UMC's focus and the fourth quarter 2021 guidance.

謝謝大家，歡迎來到聯華電子 2021 年第三季度電話會議。聯華電子總裁 Jason Wang 先生也加入了我的行列；以及聯電首席財務官劉啟東先生。稍後，我們將聽到我們的首席財務官介紹第三季度的財務業績，然後是我們的總裁關於解決 UMC 重點和 2021 年第四季度指導的關鍵信息。

Once our President and the CFO complete their remarks, there will be a Q&A session. UMC's quarterly financial reports are available at our website, www.umc.com, under the Investors, Financial section.

我們的總裁和首席財務官完成發言後，將進行問答環節。 UMC 的季度財務報告可在我們的網站 www.umc.com 的“投資者”、“財務”部分下獲取。

During this conference, we may make forward-looking statements based on management's current expectations and beliefs. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including the risks that may be beyond the company's control. For these risks, please refer to UMC's filing with the SEC in the U.S. and the ROC security authorities.

在這次會議期間，我們可能會根據管理層當前的預期和信念做出前瞻性陳述。這些前瞻性陳述受到許多風險和不確定因素的影響，這些風險和不確定因素可能導致實際結果出現重大差異，包括可能超出公司控制範圍的風險。有關這些風險，請參閱聯電向美國證券交易委員會和中華民國安全當局提交的文件。

Now, I would like to introduce UMC's CFO, Mr. Chitung Liu, to discuss UMC's third quarter 2021 financial results.

現在，我想介紹聯電首席財務官劉志東先生，討論聯電2021年第三季度的財務業績。

Thank you, Michael. I would like to go through the 3Q '21 investor conference presentation material, which can be downloaded from our website. Starting on Page 3. The third quarter of 2021 consolidated revenue was TWD 55.91 billion, with gross margin at 36.8%. The net income attributable to the stockholders of the parent was TWD 17.46 billion and the earnings per ordinary shares were TWD 1.43 and utilization rate in the third quarter of 2021 was a little bit over 100%.

謝謝你，邁克爾。我想瀏覽一下 21 年第三季度投資者會議的演示材料，可以從我們的網站下載。從第3頁開始。2021年第三季度合併收入為新台幣559.1億元，毛利率為36.8%。歸屬於母公司股東的淨利潤為174.6億新台幣，每股普通股收益為1.43新台幣，2021年第三季度的利用率略高於100%。

Please turn to Page 4. So sequential comparison for the income statement. Revenue grew quarter-over-quarter by 9.8% to TWD 55.9 billion. Gross margin rate reached 36.8% or TWD 20.5 billion. And overall operating income is TWD 15.1 billion or 27.1%. Operating profit margin rate grew nearly 5 basis percentage point. For nonoperating income, because of the better performance in the equity market, the overall net nonop is around TWD 4.3 billion, significantly grow compared to the TWD 1.88 billion in the previous quarter. And overall net income attributable to the parent is TWD 17.46 billion or TWD 1.43 EPS and for U.S. ADRs, the earnings per share per ADS is USD 0.257.

請翻到第 4 頁。因此，損益表的順序比較。收入環比增長 9.8% 至新台幣 559 億元。毛利率達36.8%或新台幣205億元。整體營業收入為新台幣 151 億元或 27.1%。營業利潤率增長近 5 個基點。對於非營業收入，由於股票市場表現較好，整體淨營業收入約為新台幣 43 億元，較上一季度新台幣 18.8 億元大幅增長。歸屬於母公司的整體淨收入為 174.6 億新台幣或 1.43 新台幣每股收益，對於美國 ADR，每股 ADS 的每股收益為 0.257 美元。

For first 3 quarters of the year on Page 5, revenue grew by 17% to TWD 153.9 billion, mainly based on higher wafer shipments, better loadings as well as higher blended ASP. Gross margin rate is about 31.8% or TWD 48.9 billion. Operating income rate is 22.1% or TWD 34 billion. The net income for the first 3 months -- first 3 quarters of the year is TWD 39.8 billion, and the net income rate is 25.9%. Our accumulated EPS for the first 3 quarters has reached TWD 3.26 per share.

對於第 5 頁的今年前 3 季度，收入增長 17% 至新台幣 1,539 億元，主要是由於更高的晶圓出貨量、更好的裝載量以及更高的混合平均售價。毛利率約為 31.8% 或新台幣 489 億元。營業利潤率為 22.1% 或新台幣 340 億元。前3個月淨利潤——今年前3季度為新台幣398億元，淨利潤率為25.9%。前 3 季累計每股盈利達 3.26 新台幣。

So Page 6 is our balance sheet. Our current cash on hand is about TWD 113 billion after the cash dividend payout. Total equity is about TWD 257 billion, as we continue to rise on both price increase as well as mix improvement. And the previous quarter, the third quarter ASP increase is nearly 8%.

所以第 6 頁是我們的資產負債表。現金分紅後，我們目前的手頭現金約為新台幣1,130億元。總股本約為 2570 億新台幣，因為我們在價格上漲和組合改善方面繼續上漲。與上一季度相比，第三季度ASP增幅接近8%。

On revenue breakdown, starting from Page 8, Asia represents about 65% of our total revenue and Japan, Europe and U.S. remain relatively decent for the -- compared to the previous quarter. IDM is about 14% and Fabless about 86%. Communication is around 46% of the total revenue, and consumer is about 27%. Computer has stayed about the same at around 17%. And, actually, almost every now is running at nearly full capacity. So the change has been minimal from a quarter-over-quarter basis. 28/22-nanometer consists of 19% of the total revenue and 40-nanometer is about 18%.

在收入細分方面，從第 8 頁開始，亞洲約占我們總收入的 65%，而日本、歐洲和美國與上一季度相比仍然相對不錯。 IDM 約佔 14%，Fabless 約佔 86%。通信約佔總收入的 46%，消費者約佔 27%。計算機幾乎保持在 17% 左右。而且，實際上，幾乎每時每刻都在幾乎滿負荷運轉。因此，環比變化很小。 28/22 納米佔總收入的 19%，40 納米約佔 18%。

And we'll continue to see some mild capacity growth coming from both 12X in Xiamen as well as 12M in Japan. And for 8-inch, there's some incremental increase from various sets, especially 8N in Suzhou in China. So for the time being, the CapEx budget for 2021 remains unchanged at USD 2.3 billion. And majority, 85% is going to the capacity of 12-inch related expansion.

我們將繼續看到廈門的 12X 和日本的 12M 出現一些溫和的產能增長。而對於8英寸，各台都有一定的增量，尤其是中國蘇州的8N。因此，2021 年的資本支出預算暫時保持在 23 億美元不變。而大部分，85%是去12寸相關的產能擴充。

So the above is the summary of UMC's results for 3Q 2021. More details are available in the report, which can be -- has been posted on our website. I will now turn the call over to President of UMC, Mr. Jason Wang.

因此，以上是聯電 2021 年第三季度業績的摘要。報告中提供了更多詳細信息，可以——已發佈在我們的網站上。我現在將把電話轉給聯華電子總裁 Jason Wang 先生。

Thank you, Chitung. Good evening, everyone. Here, I would like to update the third quarter operating result of UMC. In the third quarter, we continued to experience robust chip demand across computing, consumer and communication end segments. Higher 12-inch wafer shipments in the quarter reflect ongoing product mix enhancements and partially contribute to the lift in blended ASP. Overall wafer shipments grew 2.6% quarter-over-quarter to 2.5 million 8-inch equivalents. Revenue from 28-nanometer technologies continue to rise while business engagement in 22-nanometer have led to a growing number of customer tape-outs across wireless, display and IoT markets, further diversifying our product pipeline.

謝謝你，啟東。各位晚上好。在這裡，我想更新一下聯華電子第三季度的經營業績。第三季度，我們繼續在計算、消費和通信終端領域經歷強勁的芯片需求。本季度更高的 12 英寸晶圓出貨量反映了持續的產品組合增強，並在一定程度上促進了混合平均售價的提升。整體晶圓出貨量環比增長 2.6%，達到 250 萬片 8 英寸晶圓當量。 28 納米技術的收入繼續增長，而 22 納米的業務參與導致無線、顯示和物聯網市場上越來越多的客戶流片，進一步豐富了我們的產品線。

Looking into the fourth quarter, we anticipate wafer shipments and ASP trends will remain firm. Capacity utilization across 8-inch and 12-inch facilities will continue to remain fully loaded, as gross margin continue to exhibit upward momentum, thanks to our team's effort in optimizing capacity productivity and product mix. The current business cycle provides an opportune time for UMC to strengthen customer relationships, along with our technology competitiveness and the incremental capacity growth to elevate our market position. Our focus on growing our comprehensive logic and specialty technology portfolio has been welcomed by our customers, and we continue to broaden our product range to fulfill their needs.

展望第四季度，我們預計晶圓出貨量和平均售價趨勢將保持堅挺。 8 英寸和 12 英寸設施的產能利用率將繼續保持滿負荷，毛利率繼續呈現上升勢頭，這要歸功於我們團隊在優化產能生產率和產品組合方面的努力。當前的商業周期為 UMC 提供了一個加強客戶關係的好時機，以及我們的技術競爭力和增量產能增長，以提升我們的市場地位。我們專注於發展我們全面的邏輯和專業技術組合，這受到了客戶的歡迎，我們將繼續擴大我們的產品範圍以滿足他們的需求。

With the P5 and P6 expansion projects underway at our flagship 12A facility in Tainan, given the strong demand from our customers, we are well positioned to grow and capture additional market shares in 2022. In addition, the company continued to make strides towards a greener future. Earlier this month, UMC was honored to receive the Green Chemistry Application and Innovation Award from Taiwan's Environmental Protection Agency. The award recognizes our efforts to introduce chemical substitutes that minimize impact to the environment and the health of our employees. At our Outstanding Supplier Awards this year, UMC also took the opportunity to reiterate our commitment to achieve net zero carbon emissions by 2050 and to invite suppliers to work with us to build a low-carbon supply chain.

隨著我們台南旗艦 12A 工廠的 P5 和 P6 擴建項目正在進行中，鑑於客戶的強勁需求，我們有能力在 2022 年實現增長並佔領更多市場份額。此外，公司繼續朝著更環保的方向邁進未來。本月早些時候，聯華電子有幸獲得台灣環保署頒發的綠色化學應用創新獎。該獎項表彰了我們為引入化學替代品所做的努力，這些化學替代品最大限度地減少了對環境和員工健康的影響。在今年的傑出供應商頒獎典禮上，聯電也藉此機會重申了我們到2050年實現淨零碳排放的承諾，並邀請供應商與我們一起建立低碳供應鏈。

As a key semiconductor player, UMC understands that we have a responsibility to proactively respond to climate change and to promote sustainable practice in our industry. Together with our upstream and downstream partners, we will continue to work toward our net zero carbon emission targets.

作為一家重要的半導體廠商，聯華電子明白我們有責任積極應對氣候變化，並促進我們行業的可持續發展實踐。我們將與我們的上下游合作夥伴一起，繼續努力實現我們的淨零碳排放目標。

Let's move on to the fourth quarter 2021 guidance. Our wafer shipments will increase by 1% to 2%. ASP in U.S. dollars will increase by 1% to 2%. Gross profit margin will be in the high 30% range. Capacity utilization rate will be at 100%. Our 2021 cash-based CapEx will be budgeted at USD 2.3 billion.

讓我們繼續討論 2021 年第四季度指南。我們的晶圓出貨量將增加 1% 到 2%。以美元計算的平均售價將增加 1% 至 2%。毛利率將在30%左右。產能利用率將達到100%。我們 2021 年基於現金的資本支出預算為 23 億美元。

That concludes my comments. Thank you all for your attention. Now we are ready for questions.

我的評論到此結束。謝謝大家的關注。現在我們準備好提問了。

(Operator Instructions) First question is coming from Randy Abrams, Crédit Suisse.

（操作員說明）第一個問題來自瑞士信貸銀行的 Randy Abrams。

Congratulations on the good results. I wanted to ask the first question on capacity. Just factoring you're running 100% plus. Could you go into timing for the Phase 5 10,000 capacity, which quarter that capacity would be available? And then for Phase 6, where it's a bigger amount, the 27,500, would that all come on at the same time? And would that be beginning of 2023. Just trying to think of timing when the new capacity would come on. And just one follow-up on capacity. There were some talks you may consider further fabs in Singapore or additional capacity. Do you have plans beyond 2023 for additional capacity and see that potential option?

祝賀取得好成績。我想問第一個關於容量的問題。只是考慮到您正在運行 100% 以上。您能否確定第 5 階段 10,000 容量的時間安排，該容量將在哪個季度可用？然後是第 6 階段，數量更大，即 27,500，是否會同時出現？那會是 2023 年的開始嗎？只是想想想新產能出現的時間。並且只有一項關於容量的後續行動。有一些會談你可能會考慮在新加坡建立更多的晶圓廠或增加產能。您是否有 2023 年以後的額外容量計劃並看到了該潛在選項？

Sure. So the first is for the P5 10,000 expansion, the 28-nanometer will become online on Q2 2022. And the P6 will be in year of 2023, but in the later year of 2023. And we'll provide more specific the ramp schedule in a later day, given the current -- the [true] lead time availability update. The question about the news about the Singapore, we are unable to comment on any speculations as we always as we always do that. We don't comment on speculations. But we are always open to exploring new opportunities as long as we can enhance our shareholders benefits and we said that before as well.

當然。所以首先是 P5 10,000 擴展，28 納米將在 2022 年第二季度上線。P6 將在 2023 年，但在 2023 年晚些時候。我們將提供更具體的爬坡時間表稍後一天，鑑於當前 - [真實] 提前期可用性更新。關於新加坡新聞的問題，我們無法像往常一樣對任何猜測發表評論。我們不對猜測發表評論。但只要我們能夠提高股東利益，我們總是願意探索新的機會，我們之前也說過。

Our strategy in the disciplined CapEx philosophy from our 2015 has not changed. We always try to drive our sustainable structural profitability based on the disciplined CapEx principle. So we have aligned with our customers as well as the market given our relevance in the marketplace before we're making any CapEx decision. Meanwhile, we continue -- we're consistently cooperating with our customer regarding the long-term development plan. Given our diversified production site, I think UMC has the luxury to evaluate different expansion options beyond P5 and P6. And we will discuss our expansion plan accordingly once we can deliver that.

我們在 2015 年嚴格的資本支出理念中的戰略沒有改變。我們始終努力根據嚴格的資本支出原則來推動我們可持續的結構性盈利能力。因此，在我們做出任何資本支出決定之前，鑑於我們在市場中的相關性，我們已經與我們的客戶和市場保持一致。與此同時，我們繼續——我們一直在與我們的客戶就長期發展計劃進行合作。鑑於我們多元化的生產基地，我認為 UMC 有能力評估 P5 和 P6 以外的不同擴展選項。一旦我們能夠交付，我們將相應地討論我們的擴張計劃。

And 2 follow-ups on that. One, you ran a few percent above 100%. But do you think as we go to next year, if demand is there, that would be the level you could operate? Or was there anything specific this quarter that you were able to push out more. So is that a level you could sustain?

並對此進行了 2 次跟進。第一，你跑到 100% 以上幾個百分點。但是你認為明年如果有需求，你是否認為那將是你可以操作的水平？或者本季度有什麼具體的事情你可以推出更多。那是你可以維持的水平嗎？

And then the other follow-up was since the P6 will be later 2023, besides the 10,000, is there -- how much can you get from debottlenecking or other areas I saw fourth quarter, you have a bit of that. But if you have any other meaningful capacity.

然後另一個後續行動是因為 P6 將在 2023 年晚些時候推出，除了 10,000 之外，你能從消除瓶頸或我在第四季度看到的其他領域中得到多少，你有一些。但如果你有任何其他有意義的能力。

Well, I mean in 2021, we have continued focus on the productivity improvement in addition to the incremental capacity, and we will do so for 2022 as well. And so we do expect that effort will continue. And at the current plan, and I think the -- we are targeting greater than 100%, right? But what we guided, we will guide as a fully loaded at 100%, but the effort will continue.

好吧，我的意思是在 2021 年，除了增加產能之外，我們還繼續關註生產力的提高，我們也將在 2022 年這樣做。因此，我們確實希望這種努力會繼續下去。按照目前的計劃，我認為——我們的目標是超過 100%，對嗎？但是我們所指導的，我們將以 100% 的滿負荷來指導，但努力將繼續。

Yes, in terms of capacity, growth rate for the 2022, we currently estimate about 6% capacity increase versus 3% capacity increase in 2021.

是的，就 2022 年的產能增長率而言，我們目前估計產能增長約 6%，而 2021 年產能增長 3%。

And on 8-inch, is there any increase? Or is that all pretty much 12-inch?

而在8寸上，有沒有提升？或者這幾乎都是 12 英寸？

It's pretty much all 12-inch now. The debottlenecking of the product migration will probably continue, but it's still within the same pool. Yes.

現在幾乎都是12英寸的。產品遷移的去瓶頸可能會繼續，但它仍然在同一個池中。是的。

Okay. Great. And I wanted to ask on pricing. If you could give any look at how you're seeing pricing after this year? It looks like it might be up close to mid-teens for next year. If you see how you're seeing mature node and then also if any chance to reset the 28-nanometer? And if there's a way to think about where gross margins could go?

好的。偉大的。我想問一下定價。如果你能看看今年之後你如何看待定價？看起來明年可能會接近十幾歲。如果你看到你如何看待成熟節點，然後是否有機會重置 28 納米？如果有辦法考慮毛利率的去向？

Okay. Well, first of all, we do foresee that ASP momentum will continue into 2022. However, we are not taking advantage of our customers doing the wafer shortage. So we kind of position our ASP in a more longer-term partnership over the near-term cyclical factors. So we kind of work with the customers to earn their trust and instead of exploiting the short-term opportunistic profit. And we do believe the pricing will reflect our market value and position. So we foresee the ASP momentum will continue into 2022. At this point, for the 2022, we anticipate the capacity will remain full on both 12-inch and 8-inch, and our 2022 outlook will outpace the foundry industry growth. And overall for the growth will come from a capacity increase, productivity improvement, I mentioned earlier as well as the ASP. And as far as for the 2022 full year ASP, we'll be able to provide you some guidance in the Q4 2021 conference call. Yes.

好的。好吧，首先，我們確實預見到 ASP 的勢頭將持續到 2022 年。但是，我們並沒有利用我們的客戶解決晶圓短缺問題。因此，我們將我們的 ASP 置於更長期的合作夥伴關係中，而不是近期的周期性因素。因此，我們與客戶合作以贏得他們的信任，而不是利用短期機會主義利潤。我們確實相信定價將反映我們的市場價值和地位。因此，我們預計 ASP 的勢頭將持續到 2022 年。此時，對於 2022 年，我們預計 12 英寸和 8 英寸的產能將保持滿負荷，我們的 2022 年展望將超過晶圓代工行業的增長。總體而言，增長將來自產能增加、生產力提高，我之前提到過以及 ASP。至於 2022 年全年 ASP，我們將能夠在 2021 年第四季度電話會議中為您提供一些指導。是的。

And just a last question. I'm considering like a downturn protection. If we eventually ultimately go into the next downturn, do you expect new price level? Or do you think the same kind of flexibility where we'd see a reversal? Like if it were to drop back to like 80s utilization for an extended time, like would we go back to kind of reversal? Or do you expect some firmness?

最後一個問題。我正在考慮像低迷保護。如果我們最終進入下一次低迷，您是否期望新的價格水平？或者你認為我們會看到逆轉的那種靈活性？就像如果它在很長一段時間內回落到 80 年代的利用率，我們會回到某種逆轉嗎？或者你期待一些堅定？

Well, I mean, I think the pricing is reflecting our market position, as I mentioned earlier. So as far as for the downturn, we have continued to strengthen the company's competitiveness, right? And that includes many areas. One is we continue to prepare ourselves for the downturn and because it's a cyclical industry. And we're focused on the structural demand in many megatrends, 5G, EV and IoT application. We have aligned with the key players in our first-tier customers through the technology offering that we have, and so UMC has the sole source. And in addition to that, the CapEx approach we deploy, requires some of the risk mitigation with the customer commitments.

好吧，我的意思是，正如我之前提到的，我認為定價反映了我們的市場地位。那麼對於低迷時期，我們是在不斷加強公司的競爭力，對吧？這包括許多領域。一是我們繼續為經濟低迷做好準備，因為這是一個週期性行業。我們專注於許多大趨勢、5G、電動汽車和物聯網應用的結構性需求。我們通過我們擁有的技術產品與一線客戶中的主要參與者保持一致，因此 UMC 擁有唯一來源。除此之外，我們部署的資本支出方法需要通過客戶承諾來降低一些風險。

In addition, with validated customers' confidence (inaudible) increase in long-term agreements for future capacity expansion arrangement. And giving all those efforts that we have spent in the past years, in addition to what we just mentioned also on financial-wise, we believe the company has become more resilient in the event of the micros uncertainty. Therefore, I think the ASP will probably play a less role under such conditions and environments.

此外，隨著客戶對未來產能擴張安排的長期協議的信心（聽不清）增加。考慮到我們在過去幾年中付出的所有努力，除了我們剛才提到的財務方面的努力之外，我們相信公司在微觀不確定性的情況下變得更有彈性。因此，我認為在這樣的條件和環境下，ASP的作用可能會小一些。

The next question is from Gokul Hariharan of JPMorgan.

下一個問題來自摩根大通的 Gokul Hariharan。

Congratulations on the good results. My first question is about gross margins, just leading on from what Randy asked. We have seen a pretty strong gross margin expansion for UMC. Looks like we're still going to see further gross margin expansion. Could you talk a little bit about how you think gross margins settle down long term now that you have some visibility into some of the contracts that you have signed for the new capacity? Historically, I think one player has had very high gross margins, and everybody else has been at a much lower gross margin level. How would you characterize this, this year given that you also feel a little bit more comfortable about managing any potential downturn risk as well? So could you talk a little bit about how UMC thinks about gross margins over the next, let's say, 1 or 2 years, not just on a quarter-to-quarter basis? That's my first question.

祝賀取得好成績。我的第一個問題是關於毛利率，從蘭迪的問題開始。我們已經看到 UMC 的毛利率增長非常強勁。看起來我們仍將看到毛利率進一步擴大。既然您對為新產能簽署的一些合同有了一定的了解，您能否談談您認為毛利率如何長期穩定下來？從歷史上看，我認為一個玩家的毛利率非常高，而其他人的毛利率水平要低得多。鑑於今年您對管理任何潛在的經濟衰退風險也感到更加自在，您如何描述這一點？那麼，您能否談談 UMC 如何看待未來 1 年或 2 年的毛利率，而不僅僅是按季度計算？這是我的第一個問題。

Wow. That's a really -- well, first of all, we -- like you said, from a short-term wise, we do expect the momentum in our business growth and profitability will continue beyond Q2 -- Q4 2021, mainly due to the validation from our customers on the key markets and capture the structural demand. And given the value proposition that UMC provides to our customers, including our solutions, sufficient capacity and the growth path. And I said our goal at this point is we will strike a balance between the profit and long-term growth and -- along with our CapEx, the disciplined CapEx. We believe our approach will reflect our profitability results in the long run.

哇。這真的 - 嗯，首先，我們 - 就像你說的那樣，從短期來看，我們確實預計我們的業務增長和盈利能力的勢頭將持續到 2021 年第二季度 - 第四季度之後，主要是由於驗證從我們的主要市場客戶那裡獲取結構性需求。並且考慮到聯華電子提供給我們客戶的價值主張，包括我們的解決方案、充足的產能和成長路徑。我說我們目前的目標是我們將在利潤和長期增長之間取得平衡——連同我們的資本支出，嚴格的資本支出。我們相信，從長遠來看，我們的方法將反映我們的盈利結果。

So when you talk about long run, I think that, that requires some of the balance at here, okay? So if we look out in the next couple of years, and while we're announcing the P6 expansion, and so obviously, some of the CapEx will happen in the next couple of years along with the long-term agreement that we have find out with the customer. And we believe we'll be able to manage that balance at a healthy level. But as far as the actual number, we probably won't be able to provide it at this time. But I think we feel fairly comfortable about our business model going forward.

所以當你談到長期時，我認為這需要一些平衡，好嗎？因此，如果我們展望未來幾年，在我們宣布 P6 擴張的同時，很明顯，一些資本支出將在未來幾年隨著我們發現的長期協議發生與客戶。我們相信我們將能夠在健康的水平上管理這種平衡。但就實際數字而言，我們目前可能無法提供。但我認為我們對未來的商業模式感到相當滿意。

Yes. Just to add on that, we will provide margin guidance on a quarterly basis. And so for the next quarter conference call, certainly, we will give overall outlook for the 2022.

是的。除此之外，我們將按季度提供保證金指導。因此，對於下一個季度的電話會議，我們當然會給出 2022 年的總體展望。

So another question I had is, could you talk a little bit about -- I think over the last few years, you have increased your mix of specialty processes, automotive and other areas for 28, 40 and 55. Could you talk a little bit about what percentage of these process nodes are already specialty where there is a lot more sticky demand compared to what percentage is still like pure digital where there could be potentially more fluctuation in terms of demand?

所以我的另一個問題是，你能談談——我認為在過去幾年裡，你已經增加了 28、40 和 55 的專業工藝、汽車和其他領域的組合。你能談談嗎？這些流程節點中有多少已經是專業的，有更多的粘性需求，而有多少百分比仍然像純數字化的，在需求方面可能會有更大的波動？

I mean, right now for the specialty technology is occupied a little bit over 50% right now, and they are unique and customized to the customer. So it does give you a bit of more stickiness in terms of the customer relationship. In addition to that, there is also a sole-source product that we have engaged in. Combining with the specialty, I think the number will reach up to somewhere at the 70% -- above 70% range and along with the LTA protection. So in terms of overall business model at this point, we have certain confidence that they definitely have increased significantly on the stickiness side.

我的意思是，現在專業技術佔據了 50% 以上，它們是獨一無二的，是為客戶定制的。因此，就客戶關係而言，它確實會給您帶來更多的粘性。除此之外，還有我們從事的單一來源產品。結合專業，我認為這個數字將達到 70%——超過 70% 的範圍以及 LTA 保護。所以就目前的整體商業模式而言，我們有一定的信心，他們在粘性方面肯定有顯著增加。

Okay. Just to clarify. So the 50% plus and 70% plus is on the overall capacity, right, for UMC?

好的。只是為了澄清。所以 50% 以上和 70% 以上是在整體容量上，對吧，對於 UMC？

Yes. Yes. Yes.

是的。是的。是的。

And next, we'll have Nick Gaudois of UBS for questions.

接下來，我們將請 UBS 的 Nick Gaudois 提問。

Yes. The first one is on your LTA mechanism. If I recall, you mentioned last time that you may start to receive a prepayment from customers in the third quarter for -- in the framework of those LTAs for the capacity coming later. Is that the case? Or should we expect this to come at a later stage? And secondly, am I right to confirm that your ramp-up for the Phase 6 expansion is effectively pushed out by 1 to 2 quarters versus what you said last time? And if so, what is the reason? Is that related to equipment lead times already at this stage? Or is there any other -- are there any other factors influencing you saying what do you not expect to ramp up more in the latter part of '23 versus Q2?

是的。第一個是關於您的 LTA 機制。如果我還記得的話，你上次提到你可能會在第三季度開始收到客戶的預付款——在這些 LTA 的框架內，用於稍後的容量。是這樣嗎？還是我們應該期待這會在稍後階段出現？其次，我確認與你上次所說的相比，你對第 6 階段擴張的加速實際上被推遲了 1 到 2 個季度，我是否正確？如果是這樣，原因是什麼？這是否與現階段的設備交貨時間有關？或者是否有任何其他 - 是否有任何其他因素影響你說你不希望在 23 年的後半部分與第二季度相比增加更多？

Overall, for P6 currently on schedule, even though the equipment, some of the bottleneck equipment, the lead time may be stretched a bit, but we're still working closely with the equipment vendors. And it fall into the ballpark schedule we have agreed with our P6 partners. And majority, or if not 100%, of the P6 capacity is covered by this so-called long-term agreement. So this is nearly 100% all with LTAs.

總的來說，對於目前如期進行的P6，儘管設備，一些瓶頸設備，交貨期可能會拉長一點，但我們仍在與設備供應商密切合作。它屬於我們與 P6 合作夥伴商定的大致時間表。大多數（如果不是 100%）P6 容量都包含在這個所謂的長期協議中。所以這幾乎是 100% 的 LTA。

Great. And in that context, how about the prepayments then? Is that too early to see them? Or -- and if so when should we start to see prepayments coming through?

偉大的。在這種情況下，預付款又如何呢？現在見他們還為時過早嗎？或者——如果是這樣的話，我們應該什麼時候開始看到預付款？

Part of that is -- a little bit of that is in this year's CapEx already for down payment, but it's a very small percentage. Majority of the payment will come along with the delivery of the tool, which will happen later 2022 and also first half of 2023. So the CapEx for 2022 and 2023, we will see the majority -- the bulk of the P6-related CapEx.

其中一部分是——今年的資本支出中有一部分已經用於首付，但比例很小。大部分付款將與工具的交付一起進行，這將在 2022 年晚些時候和 2023 年上半年發生。因此，2022 年和 2023 年的資本支出，我們將看到大部分 - 大部分與 P6 相關的資本支出。

Great. And just lastly, a bit of a technicality, but when we actually see that coming through, will it appear in basically payables? Or would you do a netting of CapEx basically?

偉大的。最後一點，有點技術性，但當我們真正看到它通過時，它會出現在基本應付賬款中嗎？或者你會基本上對資本支出進行淨額計算嗎？

Sorry, can you say that again, please?

對不起，請你再說一遍好嗎？

Yes. Just a bit of a technicality, but you'll see that coming through in payables in your balance sheet? Or would you actually just net out CapEx effectively? So when you're going to give us a CapEx guidance that would be -- would that be gross or net of those prepayments?

是的。只是有點技術性，但您會在資產負債表的應付賬款中看到這一點嗎？或者你真的會有效地扣除資本支出嗎？所以當你要給我們一個資本支出指導時，那是預付款的毛額還是淨額？

Our CapEx number is on a cash basis. So it's already -- if we pay it, then it will be included in their CapEx. And there are some payable as well, but it's not -- if it's falling in other years, the following year, it will not be included in this year's CapEx.

我們的資本支出數字以現金為基礎。所以它已經 - 如果我們支付它，那麼它將包含在他們的資本支出中。還有一些應付賬款，但不是——如果它在其他年份下降，下一年，它不會被包括在今年的資本支出中。

And next, we'll have Charlie Chan of Morgan Stanley for questions.

接下來，我們將請摩根士丹利的 Charlie Chan 提問。

So my first question is about what's your observation about the end demand trend because for some specific subsectors like TV, you see panel price drop a lot. And some consumer MCU market seems to see weakness, right? If you look at those spot prices, et cetera. So I know your fab is still full, but you -- can you kind of give us some comments about the demand or customers' inventory?

所以我的第一個問題是關於您對終端需求趨勢的觀察，因為對於電視等某些特定的子行業，您會看到面板價格下降了很多。而一些消費級MCU市場似乎也看到了疲軟，對吧？如果您查看這些現貨價格，等等。所以我知道你們的工廠仍然滿員，但是你能給我們一些關於需求或客戶庫存的評論嗎？

Sure. We did also observe some mild correction from selected market segments caused by some of the demand softness and -- nevertheless, it did not affect UMC overall undersupply situation, just like you said, and which we expect this will continue through 2022. I think we haven't seen a significant concern on the inventory buildup side. And despite that, there are some inventory increase. The -- at this point, we continue to experience strong demand, while some mild correction were immediately placed by some unfulfilled demand during the long queue of the customers.

當然。我們確實也觀察到一些需求疲軟導致某些細分市場出現了一些溫和的調整——儘管如此，這並沒有影響聯電整體供應不足的情況，就像你說的那樣，我們預計這種情況將持續到 2022 年。我認為我們還沒有看到庫存增加方面的重大擔憂。儘管如此，仍有一些庫存增加。 - 在這一點上，我們繼續經歷強勁的需求，而在客戶排長隊期間，一些未滿足的需求立即進行了一些溫和的修正。

Okay. And I think Gokul just raised as a great question, right, about your customers' stickiness, right? So is it right that you said that 70% sticky business, meaning some customization, specialty with LTA, what was that the right number, 70%?

好的。我認為 Gokul 剛剛提出了一個很好的問題，對吧，關於你的客戶的粘性，對吧？那麼你說 70% 的粘性業務是否正確，這意味著一些定制，LTA 的專業，正確的數字是多少，70%？

Yes. I think it's above 70%. Yes, above 70%.

是的。我認為它超過70％。是的，超過 70%。

Okay. Great. Yes. So my question is that how about the rest 30%. What would be your pricing strategy? By the way, I mean, the company gets a greater credit to identify these -- the price high potential earlier than your industry peers. So I'm curious about your pricing strategy for that rest of 30% business presumably is more commodity and customer has kind of a dual source.

好的。偉大的。是的。所以我的問題是剩下的 30% 怎麼樣？你的定價策略是什麼？順便說一句，我的意思是，該公司在識別這些方面獲得了更大的信譽——比同行更早的價格高潛力。所以我很好奇你對其餘 30% 的業務的定價策略可能是更多的商品，客戶有一種雙重來源。

We sort of touched that a little earlier. Our current focus is focused on some of the structural demand in the 5G, EV and IoT applications. We believe those demands will continue, and they are here to stay. So some of the vulnerable ones, and we have some protection and some of the mega trends associated with demand. And we believe they are here to stay. So given some of the market focus as well as the -- what we touched on the CapEx recent mitigation approach and along with the LTA, I think we clearly -- we are less vulnerable to this cyclical issue. And so we think the ASP will actually play a less role here. So that's why we actually feel fairly comfortable at this point. And if the market dynamic does change, we'll provide you the update.

我們稍早一點談到了這一點。我們目前的重點是 5G、電動汽車和物聯網應用中的一些結構性需求。我們相信這些需求將繼續存在，而且它們將繼續存在。所以一些弱勢群體，我們有一些保護和一些與需求相關的大趨勢。我們相信他們會留在這裡。因此，考慮到一些市場焦點以及 - 我們談到了資本支出最近的緩解方法以及 LTA，我認為我們很清楚 - 我們不太容易受到這個週期性問題的影響。因此我們認為 ASP 實際上將在這裡發揮較小的作用。所以這就是為什麼我們在這一點上實際上感到相當舒服。如果市場動態確實發生變化，我們將為您提供最新信息。

Okay. That's fair enough. So I guess for some commodity, just to make some example, right? Like driver IC, MCU, meaning you see some potential risks in a downturn. So when you kind of take those orders, you already have some protection mechanism? Is that the right way to interpret your comments?

好的。這很公平。所以我想對於一些商品，只是舉個例子，對吧？像驅動IC、MCU，這意味著你在低迷時期看到了一些潛在的風險。所以當你接受這些命令時，你已經有了一些保護機制？這是解釋您的評論的正確方法嗎？

Yes, that's one way to put it. On the other hand, within the driver IC segment, there is also OLED driver, which is driving our momentum. So it's a combination of those and some of that requires sound risk mitigation mechanism. Some of that actually is more aligned to the growth of the segment. So it's a combination of that, yes.

是的，這是一種表達方式。另一方面，在驅動IC部分，也有OLED驅動，帶動了我們的勢頭。所以它是這些的組合，其中一些需要健全的風險緩解機制。其中一些實際上更符合該細分市場的增長。所以這是兩者的結合，是的。

Okay. Yes. And one topic that it seems like people care is about the Micron, those issue, right? I mean the -- sorry, I mean the -- you already settled with the U.S. Justice Department, right? But I mean 6 days ago, there was a news report about some ongoing civil lawsuits. Maybe Chitung can give us some updates, whether there's going to be some provision or kind of a legal expense on this case.

好的。是的。人們關心的一個話題似乎是關於美光的，那些問題，對吧？我的意思是 - 抱歉，我的意思是 - 你已經與美國司法部達成和解，對吧？但我是說 6 天前，有一則新聞報導說一些正在進行的民事訴訟。或許 Chitung 可以為我們提供一些最新情況，是否會有一些條款或法律費用。

Yes. First of all, we don't comment on the news speculation. It's not a complete story, and it's not the full picture. So we don't comment on that. And also by law, we cannot comment on the ongoing litigation. And we didn't have any provision based upon our legal effort. We are still working on this case. So it's still ongoing. So that's always a comment for the time being.

是的。首先，對於新聞的猜測，我們不予置評。這不是一個完整的故事，也不是全貌。所以我們不對此發表評論。而且根據法律，我們不能對正在進行的訴訟發表評論。根據我們的法律努力，我們沒有任何規定。我們仍在處理此案例。所以它仍在進行中。因此，這始終是暫時的意見。

In other words, is there is no update on any new development. No new development on this case. And if there is any new development, I think we'll certainly disclose that information accordingly.

換句話說，是否沒有任何新進展的更新。此案無新進展。如果有任何新的進展，我想我們肯定會相應地披露這些信息。

So Jason, so I just think about another question that you're supposed to be very confident that your 2022 will outpace the foundry industry. So is that because you are expanding capacity more aggressively? Or you are going to high the ASP higher than your peers. Why you have such high confidence that you can outpace your foundry peers?

所以傑森，所以我只是想另一個問題，你應該非常有信心你的 2022 年將超過代工行業。那是因為你們正在更積極地擴大產能嗎？或者您要將 ASP 提高到高於同行的水平。為什麼您有如此高的信心可以超越您的代工同行？

Well, given the current outlook of the 2022, we foresee those structural catalysts will continue to drive, including the 5G transformation, the EV and IoT devices. And those megatrends are still representing significant growth on a year-over-year basis. And we do anticipate those structural drivers will continue to fuel our growth including the OLED driver, the ISP, the WiFi-6, RF switch, MCU, PMIC, and so -- and which also lead to a higher silicon content.

那麼，鑑於 2022 年的當前前景，我們預計這些結構性催化劑將繼續推動，包括 5G 轉型、電動汽車和物聯網設備。這些大趨勢仍然代表著同比顯著增長。我們確實預計這些結構性驅動因素將繼續推動我們的增長，包括 OLED 驅動器、ISP、WiFi-6、RF 開關、MCU、PMIC 等——這也會導致更高的矽含量。

So we are convinced that most of those demand surge are here to stay largely driven by those structural needs. So given those catalysts, and we have certain confidence. And -- I mean, in addition to that, based on our efforts and market position, that gives us that confidence that the 2022 will be another strong year for UMC to gain market share.

因此，我們相信，這些需求激增中的大部分將主要由這些結構性需求驅動。因此，鑑於這些催化劑，我們有一定的信心。而且——我的意思是，除此之外，基於我們的努力和市場地位，這讓我們相信 2022 年將是聯電獲得市場份額的又一個強勁年份。

Yes. But the consensus for TSMC is like next year to grow 15% to 20%. So do you think you can perform similar or even better than this key foundry peer?

是的。但台積電的共識是明年增長 15% 至 20%。那麼您認為您的表現是否可以與這個主要的代工同行相似甚至更好？

Our estimate on the foundry industry growth in 2022 at this point is about 12%.

我們目前對 2022 年鑄造行業增長的估計約為 12%。

12%. I'm sorry. Okay.

12%。對不起。好的。

12%. Yes. And for our business outlook, I think we'll be higher than this current foundry industry projection.

12%。是的。對於我們的業務前景，我認為我們會高於目前的鑄造行業預測。

Okay. And lastly, variable cost. I mean that is a key reason why foundry peers want to hike the price, right? So variable cost no matter percentage or per wafer number. So can Chitung give us some kind of comment about the trend? For example, this year-over-year, what was the growth for the variable cost? And what would be the variable cost growth for the coming 2 years?

好的。最後，可變成本。我的意思是這是代工同行想要提高價格的一個關鍵原因，對吧？因此，可變成本與百分比或每個晶圓數量無關。那麼 Chitung 可以給我們一些關於趨勢的評論嗎？例如，今年可變成本同比增長了多少？未來 2 年的可變成本增長是多少？

Yes. For the operating expenses, it will be growing along with our enlarged revenue. However, as a percentage of revenue, we hope it will be flat to down, under control. So the revenue growth will outpace the operating expenses. As for raw material like raw wafer and also labors that were also on the rise. But altogether, I think we are commenting that because of our production efficiency improvement, our improved economy of scale, and also with a good outlook for both demand as well as pricing for 2022. I think there's still further upside for our margins -- profit margins.

是的。對於運營費用，它將隨著我們擴大的收入而增長。然而，作為收入的百分比，我們希望它能持平或下降，並受到控制。因此，收入增長將超過運營支出。至於原材料，如生晶圓和勞動力，也在增加。但總的來說，我認為我們評論說，由於我們的生產效率提高，我們的規模經濟得到改善，並且對 2022 年的需求和定價都有良好的前景。我認為我們的利潤率還有進一步的上升空間——利潤邊距。

The next question is coming from Roland Shu of Citigroup.

下一個問題來自花旗集團的Roland Shu。

So your Xiamen fab began production from 4Q '15. It was still loss-making last year, and I think it is still loss-making now. So with the better pricing, when do you expect Xiamen fab is going to be turned around? And also how many margin upside or earning upside to UMC once Xiamen fab is breakeven?

所以你們的廈門工廠從 15 年第四季度開始生產。去年還是虧本的，我覺得現在還是虧本的。那麼在定價更好的情況下，您預計廈門晶圓廠何時會扭虧為盈？一旦廈門晶圓廠達到盈虧平衡，聯電還有多少利潤率或盈利上升空間？

Xiamen should be able to be profitable in 2022. As a matter of fact, they are profitable in single quarters of 2021. So we are very close to breakeven in 2021. And it is expected to be profitable in 2022. However, it will still below corporate average in terms of profit margin in 2022. And there's still room for Xiamen to catch up to the level of UMC's corporate average.

廈門2022年應該是可以盈利的，其實他們2021年單季度就盈利了，所以我們2021年已經很接近盈虧平衡了，預計2022年可以盈利，但是還是會2022年利潤率低於企業平均水平。廈門仍有追趕聯電企業平均水平的空間。

Understood. Yes. Do you have the time frame of when this Xiamen fab gross margin is going to approach corporate average?

明白了。是的。廈門晶圓廠的毛利率何時接近企業平均水平，您有時間嗎？

No, we don't have a time frame. We -- all we can say is I can give you a rough comparison. Currently, our Singapore fab has higher gross margin than corporate average. And the Japan fab is catching up to almost identical to the UMC corporate average. And the Xiamen is, as I mentioned, coming out of loss-making to nearly breakeven this year. And it will be profitable next year, but still away from the corporate average.

不，我們沒有時間框架。我們——我們只能說我可以給你一個粗略的比較。目前，我們新加坡工廠的毛利率高於企業平均水平。而日本晶圓廠正趕上幾乎與聯電公司平均水平相同的水平。正如我所提到的，廈門今年正從虧損中走出來，接近收支平衡。明年將實現盈利，但仍遠離企業平均水平。

Okay. Then how about -- housekeeping point of view, how much can we model these subsidy from your partner in Xiamen once in next year it is going to be profitable?

好的。那麼，從管理的角度來看，我們可以從您在廈門的合作夥伴那裡獲得多少補貼來模擬明年盈利？

Okay. Say that again?

好的。再說一次？

I think we still have this subsidy from our partner in Xiamen because Xiamen fab now is still loss-making. Now about next year, how much is subsidy we can model in our model?

我認為我們在廈門的合作夥伴仍然有這筆補貼，因為廈門晶圓廠現在仍在虧損。現在大約明年，我們可以在模型中模擬多少補貼？

It will be similar to this year, except for the interest expense subsidy, which is already expired. And everything else will be about the same for 2022 compared to 2021.

除了已經到期的利息支出補貼外，這將與今年類似。與 2021 年相比，2022 年的其他一切都將大致相同。

So we'll be still around 1 billion per quarter.

所以我們每季度仍將保持在 10 億左右。

Yes.

是的。

Okay. Okay. And my second question is now including yourself, a lot of the foundry peers announced new capacity expansion plans. So in your view, how soon will the industry are to close the supply and demand gap of 8-inch and match in 12-inch foundry capacity. What are the key bottleneck of this supply-demand imbalance now?

好的。好的。我的第二個問題現在包括你自己在內，許多代工同行宣布了新的產能擴張計劃。那麼在您看來，該行業需要多長時間才能縮小8英寸的供需缺口並匹配12英寸的晶圓代工產能。現在造成這種供需失衡的關鍵瓶頸是什麼？

Well, I mean, we can't really comment about our peers, and we don't know what their plans are. We do monitor the market landscape and adjust ourselves. The focus here is about our capacity growth and are those new capacity vulnerable or the existing capacity vulnerable or not. So given our newly deployed capacity will be 28 nanometers, the majority of our 28-nanometer capacity has been reserved by the LTA or single-source customer. Therefore, we believe that capacity will be maintained at high utilization rates for a very long time.

好吧，我的意思是，我們不能真正評論我們的同行，我們也不知道他們的計劃是什麼。我們確實會監控市場格局並進行自我調整。這裡的重點是我們的產能增長，以及那些新產能是否脆弱或現有產能是否脆弱。因此，鑑於我們新部署的容量將是 28 納米，我們的大部分 28 納米容量已由 LTA 或單一來源客戶保留。因此，我們認為產能將在很長一段時間內保持在高利用率。

In addition, our mission to differentiate ourselves with our technology as well as the manufacturing excellence will enhance that stickiness. We kind of touched that earlier as well. So I think we will minimize the 28-nanometer vulnerability given our (inaudible) by the customer portfolio, along with our continuous reduction in the breakeven utilization rate. I think as far as for the UMC relevance, I think we feel comfortable about that. And so as far as the landscape, the market capacity -- worldwide foundry capacity landscape goes, we will continue monitoring that.

此外，我們以技術和卓越製造脫穎而出的使命將增強這種粘性。我們之前也有點觸及這一點。因此，我認為我們將根據客戶組合（聽不清）以及我們不斷降低盈虧平衡利用率來最大限度地減少 28 納米的漏洞。我認為就 UMC 的相關性而言，我認為我們對此感到滿意。就市場容量——全球代工產能格局而言，我們將繼續監測。

Understood. Okay. My last question is for your growth next year. You said you expect the overall foundry growth to be about 12%. And then you are going to outpace the foundry growth. However, for your overall capacity increase let's say is about 6%. So I think assuming next year you are going to fully load all this capacity. So still, the growth above 12%, I don't know you still need to rely on this ASP increase. So where will you see the ASP increase coming from? Is it mainly coming from this price hike or you still will have some product mix improvement next year?

明白了。好的。我的最後一個問題是關於你明年的成長。你說你預計整體代工增長約為 12%。然後你將超過代工廠的增長。但是，對於您的整體產能增長，我們假設約為 6%。所以我認為假設明年你將完全加載所有這些容量。所以仍然，12% 以上的增長，我不知道你還需要依靠這個 ASP 的增長。那麼您會從哪裡看到 ASP 的增長？是主要來自這次漲價，還是明年你們的產品結構還會有一些改善？

It will be both. And the -- both the ASP momentum will be a combination of the product mix improvement as well as the pricing momentum, yes, the price increase. Yes.

兩者都會。而且 - ASP 勢頭將是產品組合改進和定價勢頭的結合，是的，價格上漲。是的。

Yes. But since like your 3Q, most of the capacity has been fully loaded. So you really did not have too many product mix improvement according to your technology node, so I think this probably will be still the same next year because you guided on your 8-inch and 12-inch capacity will be fully loaded. Yes. So I expect this product mix improvement probably will be also very limited. So that means that for next year, you probably are still going to see more than 6% ASP improvement purely from this price hike. Is that right?

是的。但是既然像你的3Q，大部分產能已經滿載。所以你真的沒有根據你的技術節點有太多的產品組合改進，所以我認為明年這可能仍然是一樣的，因為你指導你的 8 英寸和 12 英寸容量將滿載。是的。所以我預計這種產品組合的改進可能也將非常有限。因此，這意味著明年，您可能仍會看到純粹由於這次價格上漲而導致 6% 以上的平均售價提高。那正確嗎？

No. I mean, first of all, the 6% is capacity increase for the year. And that's mainly for the 10,000 booked on P5. And that will kick in the second quarter of '22. So -- and since the P5 is all contribute as 28-nanometers. So from a product mix standpoint, it has a lift to the ASP as well. So the 6% is really coming out from the new capacity. And in addition to the productivity improvement that we have demonstrated in this year, we expect there will be some coming from the factory side for the productivity improvement, along with the blended ASP improvement. And we expect we will outpace the foundry projected growth.

不，我的意思是，首先，6% 是今年的產能增長。這主要是針對 P5 上預訂的 10,000 個。這將在 22 年第二季度開始。所以——因為 P5 都是 28 納米的。因此，從產品組合的角度來看，它也提升了 ASP。所以這 6% 真的來自新產能。除了我們在今年展示的生產率提高之外，我們預計工廠方面還會有一些提高生產率的措施，以及混合 ASP 的提高。我們預計我們將超過鑄造廠的預期增長。

Next question is from Szeho Ng of China Renaissance.

下一個問題來自華興資本的Szeho Ng。

My first question is regarding capacity expansion. Based on the current clean room space available in Singapore and Japan, how much more capacity in theory began at in those 2 areas?

我的第一個問題是關於產能擴張。根據新加坡和日本目前可用的潔淨室空間，理論上這兩個區域的容量要多多少？

Well, we have some footprint available. One is in our Japan fab. And we have some incremental footprint available in our 12A, the P6. And in addition to those 2 locations for our Xiamen facility, we also have a second phase footprint available to us. And meanwhile, we continue to be open to the other new opportunity as well and -- given the current market dynamics. So the future expansion footprint is always on our road map that we'll continue monitoring that.

好吧，我們有一些可用的足跡。一個在我們的日本工廠。我們的 12A P6 中有一些可用的增量足跡。除了我們廈門工廠的這兩個地點之外，我們還有第二階段的足跡可供我們使用。同時，鑑於當前的市場動態，我們也繼續對其他新機會持開放態度。因此，未來的擴張足跡始終在我們的路線圖上，我們將繼續對其進行監控。

I see. But outside Taiwan, outside China, let's say, in Singapore, how much more capacity we can add, just based on the current clean room space we have?

我懂了。但在台灣以外，在中國以外，比方說在新加坡，僅根據我們目前擁有的無塵室空間，我們還能增加多少產能？

At this point, Singapore is at 100% full.

此時，新加坡已經 100% 滿了。

I see. Got you. Yes. And second question maybe for Chitung. Regarding the investment income, actually, the company has benefited quite a lot from the investment income for the last couple of quarters. So for modeling purposes, how should we model that line?

我懂了。明白了是的。第二個問題可能是針對 Chitung 的。關於投資收益，實際上，公司從過去幾個季度的投資收益中受益匪淺。那麼出於建模的目的，我們應該如何為那條線建模呢？

It's highly correlated to the stock market performance given our funds and investment portfolio. And so I guess it's going to be related to the future performance of the equity market. In the meantime, for the third quarter, we actually received about TWD 770 million of dividends from our investees. So third quarter is always the big season in terms of dividend collection. So that's adding to the numbers for the third quarter.

鑑於我們的基金和投資組合，它與股市表現高度相關。所以我想這將與股票市場的未來表現有關。與此同時，第三季度，我們實際從投資對像那裡獲得了約7.7億新台幣的股息。因此，就股息收取而言，第三季度始終是一個大季節。所以這增加了第三季度的數字。

Okay. Got you. When I try to look at the breakdown, there's a lack or gains on financial assets at fair value through profit or loss. Is it also dependent on the equity market performance, right?

好的。明白了當我嘗試查看細分時，通過損益按公允價值計量的金融資產存在虧損或收益。它也取決於股票市場的表現，對嗎？

That's correct. Yes.

這是正確的。是的。

Congratulation on great results. Yes.

祝賀取得優異成績。是的。

Next question is from Brett Simpson of Arete Research.

下一個問題來自 Arete Research 的 Brett Simpson。

Yes. I had a question on display drivers. UMC has a high market share here. So can you maybe just help us understand what portion of current sales is coming from display drivers at the moment.

是的。我對顯示驅動程序有疑問。聯電在這裡佔有很高的市場份額。那麼，您能否幫助我們了解目前的銷售額中有多少來自顯示驅動程序。

I mean, we actually don't do a breakdown by the applications. So -- but for the high-voltage process, if we break down by high-voltage process, which representing majority of the display segment, the high-voltage representing 30% of our specialty portion. Yes.

我的意思是，我們實際上並沒有按應用程序進行細分。所以 - 但對於高壓工藝，如果我們按代表大部分顯示部分的高壓工藝進行分解，則高壓占我們專業部分的 30%。是的。

Okay. Okay. Great. And I know you include some of the customers in display drivers with long-term agreements. But is this the sort of business that can commit to long-term agreements? And we've seen, obviously, some huge price hikes for some of the customers and display drivers and some would say these are unsustainably high. So I'm just keen to get your perspective on how you see driver IC customers delivering on some of your contractual terms, and to what extent you're insulated from volatile swings in display driver fundamentals?

好的。好的。偉大的。而且我知道您在顯示驅動程序中包含了一些客戶，並簽訂了長期協議。但這是一種可以承諾長期協議的業務嗎？顯然，我們已經看到一些客戶和顯示驅動器的價格大幅上漲，有些人會說這些價格高得不可持續。因此，我很想了解您對驅動 IC 客戶如何按照您的某些合同條款交付的看法，以及您在多大程度上不受顯示驅動器基本面波動的影響？

Well, I mean that's very good question. And since we have a larger exposure on the high-voltage side, and the -- so we kind of become more selective. So within the high-voltage space, there are also different subcategory. And for those that they have alternative solutions and or more vulnerable to the physical factors, we actually try to minimize those volumes. So we actually more concentrate in the area of the higher growth segment and -- as well as has -- more of an automotive segment has a longer life, higher qualification requirements. So they tend to have a higher stickiness. So we tend to be more selective within our high-voltage space. So that sort of give us the confidence that they'd be able to keep their contractual obligations.

嗯，我的意思是這是一個很好的問題。而且由於我們在高壓側有更大的風險敞口，而且 - 所以我們變得更具選擇性。所以在高壓空間內，也有不同的子類別。對於那些有替代解決方案和/或更容易受到物理因素影響的人，我們實際上會盡量減少這些數量。因此，我們實際上更專注於增長較高的領域，並且——以及——更多的汽車領域具有更長的壽命、更高的資格要求。所以他們往往有更高的粘性。因此，我們傾向於在我們的高壓空間內更具選擇性。因此，這讓我們有信心他們能夠履行合同義務。

Right. That's very helpful. And just on LTAs, can you maybe just help us what specific portion of sales is covered by LTAs at the moment? And how might this change next year? And I guess, can you share with us -- does the LTAs include -- is it wafer capacity guarantees? Or is it more pricing guarantees or both? Under what conditions are you setting LTAs today? And could these be renegotiated by customers at some point in the future?

正確的。這很有幫助。就 LTA 而言，您能否幫助我們目前 LTA 涵蓋了哪些具體的銷售部分？明年這會如何改變？我想，您能否與我們分享——LTA 是否包括——它是晶圓產能保證嗎？還是更多的定價保證或兩者兼而有之？您今天在什麼條件下制定 LTA？客戶是否可以在未來某個時候重新協商這些內容？

It's actually pretty complicated and I will [whether] not to elaborate in detail. But in general sense, it's really more CapEx related, and then we have a longer-term LTA coverage. And that's nonCapEx related, and we have more of the LTA under such capacity reservation approach. And most of the LTA does have both the pricing and capacity included. And so it's a combination of many. And given the condition of the supply and reservation situation, then we align with our customers for those LTA conditions. Yes.

它實際上非常複雜，我將 [是否] 不詳細說明。但從一般意義上講，它實際上與資本支出更相關，然後我們有更長期的 LTA 覆蓋範圍。這與資本支出無關，在這種容量預留方法下，我們有更多的長期協議。大多數 LTA 都包含定價和容量。所以它是許多的組合。考慮到供應和預訂情況，我們會與客戶就這些 LTA 條件保持一致。是的。

Yes. As for the percentage, like I mentioned earlier, nearly 100% of the P6-related capacity are covered by LTA. And the remaining capacity, also we are seeing the increasing trend. The new orders are covered by LTA as well. Unfortunately, we don't disclose the percentage. But Jason did mention that LTAs plus single source consists more than 2/3 of our overall capacity. And it looks like the LTA trend is continuing.

是的。至於百分比，就像我之前提到的，LTA 涵蓋了近 100% 的 P6 相關容量。而剩餘產能，我們也看到了增加的趨勢。 LTA 也涵蓋了新訂單。遺憾的是，我們不透露百分比。但 Jason 確實提到 LTA 加上單一來源占我們總容量的 2/3 以上。看起來 LTA 的趨勢還在繼續。

Next one is Bruce Lu, Goldman Sachs.

下一位是高盛的 Bruce Lu。

Okay. So I think I remember, Jason, 2 quarters ago, talked about like 8-inch pricing is pretty much fully reflect your value, but you need to work on the 12-inch. So my current assumption is that for 2022, your pricing will fully reflected your value. However, my question is that even with that -- again, that was my assumption that the gross margin is still have some gap with the industry leader, even for the fully depreciated 8-inch. So my question is that either the value is not fully reflected or the productivity gap with the industry leader is still -- there is still some gap. So which one will be? If that has to do with the productivity, when can you narrow the gap and see another level up of the profitability?

好的。所以我想我記得，傑森，兩個季度前，談到 8 英寸定價幾乎完全反映了你的價值，但你需要在 12 英寸上工作。所以我目前的假設是，到 2022 年，你的定價將充分反映你的價值。然而，我的問題是，即使如此 - 同樣，我的假設是毛利率與行業領導者仍有一定差距，即使是完全折舊的 8 英寸。所以我的問題是，要么價值沒有得到充分體現，要么與行業領導者的生產力差距仍然存在——仍然存在一些差距。那麼會是哪一個呢？如果這與生產力有關，您什麼時候可以縮小差距並看到另一個水平的盈利能力？

Well, first of all, I don't think we ever gave a breakdown of the 12-inch and 8-inch in terms of 8-inch profitability. We did comment about the 8-inch ASP. But usually, we typically, we don't give a breakdown on profitability of 8-inch. So in our internal data, we actually feel a little bit different. We have a different perspective than what you just commented. So the -- we actually feel fairly comfortable about our 8-inch market position. I think the gap between us as a blended result compared to the peers, I can't comment on our peers, but we believe there is a also a matter of the scale and also the mix of the product.

好吧，首先，我認為我們從來沒有就 8 英寸的盈利能力對 12 英寸和 8 英寸進行細分。我們確實評論了 8 英寸 ASP。但通常，我們通常不會對 8 英寸的盈利能力進行細分。所以在我們的內部數據中，我們其實感覺有點不一樣。我們的觀點與您剛才評論的觀點不同。所以 - 我們實際上對我們的 8 英寸市場地位感到相當滿意。我認為我們之間的差距是與同行相比的混合結果，我不能對我們的同行發表評論，但我們相信這也與規模和產品組合有關。

So it does definitely have a difference between different companies. And so we're going to continue improve our solution competitiveness. And along with our manufacturing side, plus the incremental capacity support that we have aligned with our customers, we believe we can continue to enhance our market position by bridging the gap. And I think we are making good progress, and I think there's still some room. And -- but I think we're fairly close, yes.

因此，不同公司之間確實存在差異。因此，我們將繼續提高我們的解決方案競爭力。連同我們的製造方面，加上我們與客戶保持一致的增量產能支持，我們相信我們可以通過縮小差距來繼續提升我們的市場地位。我認為我們正在取得很好的進展，我認為還有一些空間。而且 - 但我認為我們非常接近，是的。

I'm sorry, let me clarify it because in the past, when (inaudible) was trying to list in China, the gross margin for the 8-inch fab was disclosed a demo at least for the (inaudible). That was somewhere around like below the industry peer or even below the industry leader. But what Jason just mentioned is that the latest internal data suggested that your 8-inch profitability is actually very competitive. Is that the right understanding?

對不起，讓我澄清一下，因為在過去，當（聽不清）試圖在中國上市時，8 英寸晶圓廠的毛利率至少在（聽不清）的演示中被披露。這大約低於行業同行甚至低於行業領導者。但Jason剛才提到的是，最新的內部數據表明，你們8寸的盈利能力其實是非常有競爭力的。這樣理解對嗎？

Yes. Yes, if you look at our overall 8-inch operation, yes.

是的。是的，如果您看一下我們的整體 8 英寸操作，是的。

Understood. Okay. So the next question is regarding to the compound semi. I think UMC has a subsidiary for the compound semi. So recently, we do see some stronger than expected demand for that. So can you comment on your strategy for the compound semi? Are you going to expand it? Or what's the key application? What's the target for your compound semi business?

明白了。好的。所以下一個問題是關於復合半。我認為 UMC 有一個複合半導體的子公司。所以最近，我們確實看到了一些比預期更強勁的需求。那麼您能評論一下您的複合半成品策略嗎？你要擴大它嗎？或者關鍵的應用是什麼？您的複合半導體業務的目標是什麼？

Well, I mean, this is definitely an area -- important area for us, and we have devoted to this market. And we have put in our resource and the technology development team on the project. I think the market has significant potential. And at this point, we're still relatively small at the beginning -- at the early stage of the business development, but we remain pretty confident about that. Within the compound space, there are different market segments. And we are -- at this point, we are in the process decided on some of the selected area that we believe we can be relevant. And so -- and once we have concluded that, we actually will be able to share that with you. We're not going to go all out to address the overall compound, but there will be selected areas that we're going to be focused on. And focus on those areas and continue executing our plan to make sure that we will be relevant within those space.

嗯，我的意思是，這絕對是一個領域——對我們來說很重要的領域，我們已經致力於這個市場。我們已經將我們的資源和技術開發團隊投入到該項目中。我認為市場潛力巨大。在這一點上，我們一開始還相對較小——處於業務發展的早期階段，但我們對此仍然非常有信心。在復合空間內，有不同的細分市場。我們 - 在這一點上，我們正在決定一些我們認為我們可能相關的選定領域。所以 - 一旦我們得出結論，我們實際上就可以與您分享。我們不會全力以赴解決整個大院，但我們將重點關注選定的領域。並專注於這些領域並繼續執行我們的計劃，以確保我們在這些領域內發揮作用。

But will you turn aggressive in terms of expanding your capacity for the compound semi?

但是，在擴大復合半成品的產能方面，您會變得積極進取嗎？

I mean given the compound's market outlook, I don't think the capacity is a critical -- at a critical juncture yet. We have a sufficient capacity to support our current activities. And once the demand requires additional capacity, we will definitely aggressively pursue that.

我的意思是，鑑於化合物的市場前景，我認為產能還不是關鍵——在關鍵時刻。我們有足夠的能力支持我們目前的活動。一旦需求需要增加產能，我們一定會積極追求。

Next one, Frank Lee, HSBC.

下一位是匯豐銀行的 Frank Lee。

So I just wanted to ask maybe a longer-term question in terms of -- we've seen, I guess, in the industry, some of your peers are now talking about expanding and even expanding in other countries. And we see a lot of discussions about other -- geopolitically about countries wanting to reestablish the semiconductor supply chain. Is this something that UMC would consider as well in terms of expanding in other regions outside of Asia?

所以我只是想問一個可能更長期的問題——我們已經看到，我猜，在這個行業，你們的一些同行現在正在談論在其他國家擴張甚至擴張。我們看到很多關於其他地緣政治方面關於希望重建半導體供應鏈的國家的討論。聯電在亞洲以外的其他地區擴張時，是否也會考慮這一點？

Well, we have been very diversified. We have a facility Japan, we have a facility in Singapore and China as well. So we have been very diversified in the past, and we will continue to do that and we'll continue exploring that. Given the recent hype of a semiconductor market, in many countries or many regions talking some of the incentive plan for building a facility in those locations, we're certainly evaluating those. And the key of the building of new -- the greenfield facility is not only the ROI, it is also the customer engagement. So we are open to customer feedbacks. And along with our ROI considerations and we'll definitely make sure that we follow our disciplined CapEx philosophy. So -- and if there is a decision on certain locations, we'll disclose that accordingly.

好吧，我們已經非常多樣化了。我們在日本有工廠，在新加坡和中國也有工廠。所以我們過去一直非常多元化，我們將繼續這樣做，我們將繼續探索。鑑於最近半導體市場的炒作，許多國家或地區都在談論在這些地方建設設施的一些激勵計劃，我們當然正在評估這些。建設新設施的關鍵——新建設施不僅是投資回報率，也是客戶參與度。所以我們對客戶的反饋持開放態度。連同我們對投資回報率的考慮，我們一定會確保遵循我們嚴格的資本支出理念。所以 - 如果對某些地點有決定，我們會相應地披露。

Okay. And then I have just a follow-up question on, I guess, the CapEx and capital intensity. Based on your CapEx for 2021 of $2.3 billion, it seems to suggest your CapEx to sales is going to rise to about 30% versus 15% last year. As we go forward in the next couple of years, should -- how should we think about this capital intensity business? I know you have an LTA for your P6, but just in general, should we see thinking at 30% as kind of a new norm? Or can you give us any kind of clues or indication on how we should think about this?

好的。然後我有一個關於資本支出和資本密集度的後續問題。根據您 2021 年 23 億美元的資本支出，這似乎表明您的資本支出與銷售額之比將上升至約 30%，而去年為 15%。隨著我們在未來幾年的發展，我們應該如何看待這種資本密集型業務？我知道您的 P6 有 LTA，但總的來說，我們是否應該將 30% 的想法視為一種新規範？或者你能給我們任何線索或指示，說明我們應該如何考慮這個問題嗎？

Yes. We don't really do capital intensity. But in a way, we do monitor our profitability structures and our affordability. But more importantly, as Jason mentioned, it is also related to customer engagement and our technology differentiation, et cetera. So we want to be a relevant player and customer can stick with UMC for longer term. So all the CapEx is not really pure capital intensity point of view. It is a combination of various reasons.

是的。我們並沒有真正做到資本密集度。但在某種程度上，我們確實在監控我們的盈利結構和我們的負擔能力。但更重要的是，正如 Jason 提到的，它還與客戶參與度和我們的技術差異化等有關。所以我們想成為一個相關的參與者，客戶可以長期堅持使用 UMC。所以所有的資本支出並不是真正純粹的資本密集度觀點。這是多種原因的結合。

Okay. So -- but I guess -- so there's no real target that we should look at in terms of what that capital intensity would look like? Because I think it's quite a big change in the past year. But going forward, there isn't any explicit target we should think about?

好的。所以——但我想——所以我們應該沒有真正的目標來考慮資本密集度是什麼樣的？因為我認為在過去的一年裡這是一個很大的變化。但展望未來，有沒有什麼明確的目標是我們應該考慮的？

It is a boundary -- internal boundary. I mean, we don't want to overspend for sure. We don't want to be overly aggressive in terms of affordability. But we don't also -- just for the sake of spending, if we have money and we just spend it, it's not the case. We really have to protect it by the customers' risk mitigation methodology as well as the future longer-term corporate development plan. So even if we can afford it, we may not do it. Depends on the customers' needs and customer engagement.

這是一個邊界——內部邊界。我的意思是，我們肯定不想超支。我們不想在負擔能力方面過於激進。但我們也不會——只是為了花錢，如果我們有錢就花錢，情況就不是這樣了。我們確實必須通過客戶的風險緩解方法以及未來更長期的企業發展計劃來保護它。所以即使我們負擔得起，也不一定會去做。取決於客戶的需求和客戶參與度。

Yes. So may I add? The capital intensity is more of the active fab measurements, right? I mean, the condition that we measure on really if we invested at the right time at the right place with right know and with the right customers. So if we believe it's within the UMC affordability level and meeting all the conditions that we set out to do and follow our CapEx discipline philosophy, and then we'll release the CapEx. And we'll present and approve that CapEx and release it. So after that, definitely we'll be able to come back and measure that intensity issue, but the intensity wasn't the first level of consideration.

是的。那我可以補充嗎？資本密集度更多的是活躍晶圓廠的衡量標準，對吧？我的意思是，如果我們在正確的時間在正確的地方以正確的知識和正確的客戶進行投資，那麼我們真正衡量的條件。因此，如果我們認為它在 UMC 的承受能力範圍內並且滿足我們設定的所有條件並遵循我們的資本支出紀律理念，那麼我們將發布資本支出。我們將提交並批准資本支出並發布。所以在那之後，我們肯定能夠回來衡量強度問題，但強度不是首要考慮因素。

And we are taking the last question, the last one, Gokul Hariharan of JPMorgan.

我們正在回答最後一個問題，最後一個問題，摩根大通的 Gokul Hariharan。

I just wanted to delve into some of the demand-related dynamics given there is a lot of concerns about cycle ending among investors. How does the -- how does UMC management look at and -- look and assess demand book? And how do you get comfort about continued growth into next year, especially, I think you're modeling foundry industry to grow double digit and UMC to grow even faster than that? Could you share with us some of those, like how you kind of develop comfort around that fact? And is there some kind of book-to-bill or a nonsupported demand kind of expectation that you monitor, which you can share to give some comfort to the market also?

鑑於投資者對周期結束有很多擔憂，我只想深入研究一些與需求相關的動態。 UMC 管理層如何看待和評估需求書？您如何對明年的持續增長感到欣慰，尤其是，我認為您正在為晶圓代工行業建模以實現兩位數增長，而 UMC 的增長速度甚至更快？你能和我們分享其中的一些嗎，比如你是如何圍繞這個事實建立舒適感的？是否有某種您監控的訂單到賬單或不受支持的需求類型的期望，您可以分享這些期望來給市場帶來一些安慰？

Well, we did observe some of the softness, as we mentioned earlier. The -- but in 2022, despite a lower contribution in wafer demand associated with the work from home and home learning, we still expect some of the demand will continue, and we call it structural demand, 5G, EV, IoT. And those demand remains strong. And we still have a significant unfulfilled demand within those segments. And while we're estimating the growth of the market is at 12%, along with our current alignment with the customer, we think we'd be able to outgrow that.

好吧，正如我們之前提到的，我們確實觀察到了一些柔軟度。 - 但到 2022 年，儘管與在家工作和在家學習相關的晶圓需求貢獻較低，但我們仍然預計一些需求將繼續存在，我們稱之為結構性需求、5G、電動汽車、物聯網。這些需求依然強勁。我們在這些細分市場中仍有大量未滿足的需求。雖然我們估計市場增長率為 12%，但我們目前與客戶保持一致，我們認為我們能夠超越這一增長。

And so -- and also, we have tracking the overall inventory situation. We see some rise of inventory, but we also see some of the shortage components. There is some of the longer life, shorter life, and we have some triangulate that, along with the end customer and the direct dialogues that give us the confidence that we're still on the shorter side of the supply side. And so while we are still under the catch-up mode. And it has further validated that some of the softness being fulfilled with unfulfilled demand immediately. And so we still -- at this point, we still feel confident about the 2022 outlook.

因此——而且，我們還跟踪了整體庫存情況。我們看到庫存有所增加，但我們也看到了一些短缺組件。有一些更長的壽命，更短的壽命，我們有一些三角測量，以及最終客戶和直接對話，讓我們相信我們仍然處於供應方的較短一側。因此，當我們仍處於追趕模式時。並且它進一步驗證了一些軟性正在立即滿足未滿足的需求。所以我們仍然 - 在這一點上，我們仍然對 2022 年的前景充滿信心。

Thank you. And ladies and gentlemen, we thank you for all your questions. That concludes today's Q&A session. I will turn it over to UMC Head of IR for closing remarks.

謝謝你。女士們，先生們，我們感謝你們提出的所有問題。今天的問答環節到此結束。我將把它交給 UMC 的 IR 負責人作結束語。

Thank you, everyone, for attending this conference today. We appreciate your questions. As always, if you have any additional follow-up questions, please feel free to contact UMC at ir@umc.com. Have a good day.

謝謝大家今天參加這個會議。感謝您提出問題。與往常一樣，如果您有任何其他後續問題，請隨時通過 ir@umc.com 聯繫 UMC。祝你有美好的一天。

Thank you. And ladies and gentlemen, that concludes our conference for third quarter 2021. We thank you for your participation in UMC's conference. There will be a webcast replay within an hour. Please visit www.umc.com, under the Investors, Events section. You may now disconnect. Goodbye.

謝謝你。女士們，先生們，我們 2021 年第三季度的會議到此結束。我們感謝您參加 UMC 的會議。一個小時內將進行網絡廣播重播。請訪問 www.umc.com，在“投資者”、“活動”部分下。您現在可以斷開連接。再見。