聯華電子 (UMC) 2022 Q3 法說會逐字稿

Welcome everyone to UMC's 2022 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 2 hours after the conference has finished. Please visit our website www.umc.com under the Investor Relations, Investors Events section.

歡迎大家參加聯華電子 2022 年第三季財報電話會議。 （操作員說明）供您參考，本次電話會議現透過網路進行現場直播。會議結束後2小時內將提供網路直播重播。請造訪我們的網站 www.umc.com 的「投資者關係」、「投資者活動」部分。

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人關係主管Michael Lin先生。林先生，請開始。

Thank you, and welcome to UMC's conference call for the third quarter of 2022. I'm joined by Mr. Jason Wang, the President of UMC; and Mr. Chi-Tung 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 fourth quarter 2022 guidance. Once our President and CFO complete their remarks, there will be a Q&A section.

謝謝大家，歡迎參加聯電 2022 年第三季電話會議。以及聯電財務長劉志東先生。稍後，我們將聽到我們的財務長介紹第三季的財務業績，然後是我們的總裁關於解決 UMC 的重點和 2022 年第四季度指導的關鍵信息。一旦我們的總裁和財務長完成發言，就會有問答部分。

UMC's quarterly financial reports are available at our website www.umc.com under the Investor Financials section. 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 a more detailed discussion of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and the ROC security authorities. During this conference you may view our financial presentation material, which is being broadcast live through the internet.

UMC 的季度財務報告可在我們的網站 www.umc.com 的「投資者財務」部分取得。在這次會議期間，我們可能會根據管理層目前的期望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性的影響，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。有關這些風險和不確定性的更詳細討論，請參閱我們最近和隨後向 SEC 和中華民國安全當局提交的文件。在本次會議期間，您可以觀看我們透過網路現場直播的財務簡報資料。

Now I would like to introduce UMC's CFO, Mr. Chi-Tung Liu, to discuss UMC's third quarter 2022 financial results.

現在我想介紹聯電財務長劉志東先生，討論聯華電子2022年第三季的財務表現。

Thank you, Michael. I would like to go through the 3Q 2022 investor conference presentation material, which can be downloaded for view, in real time from our website.

謝謝你，麥可。我想瀏覽一下 2022 年第三季投資者會議簡報資料，該資料可以從我們的網站即時下載查看。

Starting on Page 4. The third quarter of 2022, consolidated revenue was TWD 75.35 billion, with a gross margin at 47.3%. Net income attributable to the stockholder of the parent was TWD 27 billion and the earnings per ordinary shares were TWD 2.19. Utilization rate in the third quarter remained at 100% plus. And overall wafer shipment and also ASP are pretty much in line with our previous quarter's guidance.

從第4頁開始。歸屬於母公司股東的淨利為新台幣270億元，每股普通股收益為新台幣2.19元。第三季使用率維持在100%以上。整體晶圓出貨量和平均售價與我們上一季的指引非常一致。

Next page, please. So for the third quarter, revenue grew by 4.6% sequentially to TWD 75.3 billion. Gross margin rate of 47% or in absolute dollar, NT &D dollar terms is TWD 5.66 billion. And operating income margin reached 40% compared to 39.1% in the previous quarter. And net income attributable to the shareholder of the parent was TWD 26.9 billion or equivalent of EPS 2.19%. This is a meaningful growth compared to 1.74 EPS in the previous quarter.

請下一頁。因此，第三季營收季增 4.6%，達到 753 億新台幣。毛利率為47%，以絕對美元計算，新台幣&D美元計算為新台幣56.6億元。營業利益率達 40%，而上一季為 39.1%。歸屬母公司股東淨利為新台幣269億元，相當於EPS 2.19%。與上一季 1.74 EPS 相比，這是一個有意義的成長。

For the first 3 quarters, the cumulative revenue grow by 37%, thanks to the help from shipment increase as well as ASP enhancement and also the NT dollar depreciation, all 3 factors play important roles. And for the gross margin rate for the first 3 quarters was around 45.8% or TWD 96.6 billion. Operating income surpassed TWD 80 billion for the first 3 quarters, which is a 38.3% operating income margin rate compared to 22.1% in the same period of 2021. For the net income for the shareholder of the parent is 68.131 or 32.3%, and that's a 71% year-over-year growth and EPS for the first 3 quarters reached TWD 5.5 per share.

前三季累計營收成長37%，得益於出貨量增加、平均售價提升以及新台幣貶值的幫助，這三個因素都扮演著重要角色。前三季的毛利率約為 45.8%，即 966 億新台幣。前三季營業收入超過 800 億新台幣，營業利益率為 38.3%，而 2021 年同期為 22.1%。達到每股5.5 元新台幣。

So we pay out $3 per share cash dividend back in the early part of third quarter. And after that, the post-dividend cash on hand is about TWD 180 billion. And our total equity today is about TWD 315 billion for the end of third quarter of this year. And as I mentioned earlier, ASP remained firm and in line with our previous quarter's guidance, continued to stay at the current level in the third quarter of 2022.

因此，我們在第三季初支付了每股 3 美元的現金股利。此後，股息後手頭現金約為新台幣1800億。截至今年第三季末，我們今天的總股本約為新台幣 3,150 億。正如我之前提到的，平均售價保持堅挺，與我們上一季的指導一致，在 2022 年第三季繼續保持在當前水平。

In terms of revenue breakdown, we see some decline, the percentage of revenue for our Asian market from 55% in the previous quarter to 62% in third quarter of '22. And for the other regions, we see a minor increase. IDM continued to outperform fabless in recent quarters, especially in the third quarter. And right now, IDM stands for about 17% of our total revenue.

就收入細分而言，我們看到了一些下降，亞洲市場的收入百分比從上一季的 55% 下降到 22 年第三季的 62%。對於其他地區，我們看到了小幅成長。最近幾個季度，IDM 的表現持續優於無晶圓廠，尤其是在第三季。目前，IDM 約占我們總收入的 17%。

In terms of segment breakdown, it's not much changed. Is that competitor now is in same percentage of revenue of our other revenue, which is mainly composed of auto and industrial. In terms of geometry breakdown, for 22/20 nanometer reached 25% for the first time, and that's mainly due to the newly increased capacity from our P5 facility in Tainan and 55% is about 18% and 90-nanometer is about 8%.

從細分來看，變化不大。現在那個競爭對手的收入與我們其他收入（主要由汽車和工業組成）的收入比例相同嗎？從幾何細分來看，22/20奈米首次達到25%，主要為台南P5廠新增產能，55%約18%，90奈米約為8%。

Capacity in Q4 will only slightly increase mainly coming from Hajian, the Suzhou 8-inch wafer fab. And every other fab will remain about similar. We have revised on our full year cash base CapEx from the previously USD 3.6 billion now to USD 3 billion for year 2022, and we can elaborate more details for this downward revision for our annual CapEx budget.

第四季產能僅小幅成長，主要來自蘇州8吋晶圓廠哈建。其他所有晶圓廠也將保持相似。我們已將全年現金基礎資本支出從先前的 36 億美元修改為 2022 年的 30 億美元，並且我們可以為年度資本支出預算的下調詳細說明更多細節。

And the above is a summary of UMC's results for third quarter of 2022. More details are available in the report, which has been posted on our website.

以上是聯華電子 2022 年第三季業績摘要。

I will now turn the call over to President of UMC, Mr. Jason Wang.

我現在將電話轉給聯電總裁王傑森先生。

Thank you, Chi-Tung. Good evening, everyone. Here, I would like to share UMC's third quarter highlights. In Q3, our results benefited from product mix optimization and a more favorable exchange rate, while Fab capacity remains fully utilized. Despite softening demand in consumer end markets, strength in certain wireless communication area drove further expansion in our 22/28 nanometer business, which accounted for 25% of overall third quarter revenue and live wafer average selling price.

謝謝你，志東。大家晚上好。在這裡，我想分享一下聯華電子第三季的亮點。第三季度，我們的業績受惠於產品結構優化和更有利的匯率，同時晶圓廠產能仍被充分利用。儘管消費終端市場需求疲軟，但某些無線通訊領域的實力推動了我們22/28奈米業務的進一步擴張，該業務佔第三季整體營收和晶圓平均售價的25%。

We believe our industry-leading position in OLED, OLED display driver IC will continue to drive growth for our 22/28 nanometer technologies amid growing adoption of OLED panels in smartphones and other end devices. We also saw sustained momentum in our automotive business during the quarter, and we intend to pursue more collaboration opportunities with existing and potential automotive customers.

我們相信，隨著智慧型手機和其他終端設備越來越多地採用 OLED 面板，我們在 OLED、OLED 顯示器驅動器 IC 方面的行業領先地位將繼續推動我們 22/28 奈米技術的成長。本季我們也看到汽車業務的持續成長勢頭，我們打算與現有和潛在的汽車客戶尋求更多合作機會。

Moving into the fourth quarter. We expect to face headwinds amid demand weakness impacted by factors including the inflationary environment and Ukraine war. While UMC will not be immune to the inventory correction affecting the industry, we will work closely with our customers as they adjust elevated inventories to align with current market conditions. At the same time, we will continue to deliver differentiated technology processes to enable customers' product pipeline.

進入第四季。由於通膨環境和烏克蘭戰爭等因素影響需求疲軟，我們預期將面臨阻力。雖然聯華電子無法免受影響行業的庫存調整的影響，但我們將與客戶密切合作，讓他們調整增加的庫存以適應當前的市場狀況。同時，我們將繼續提供差異化的技術流程，為客戶的產品管線賦能。

We have revised the company's 2022 capital expenditures down to USD 3 billion. Our capacity expansion in Tainan and Singapore are still progressing as planned in order to meet long-term supply commitments. Despite near-term turbulence, the structural story of increasing silicon content driven by the rise of 5G, AIoT, and ED remains intact. With our comprehensive technology offering focused on manufacturing excellence and resilient financial structure, UMC will further increase our exposure to strong growth markets and consolidate our specialty technology leadership.

我們已將公司2022年的資本支出下調至30億美元。我們在台南和新加坡的產能擴張仍在按計劃進行，以履行長期供應承諾。儘管近期出現動盪，但 5G、AIoT 和 ED 興起推動矽含量增加的結構性故事仍然完好無損。憑藉我們專注於卓越製造和彈性財務結構的全面技術產品，聯華電子將進一步增加我們在強勁成長市場的曝光度，並鞏固我們的專業技術領先地位。

Now let's move on to the fourth quarter 2022 guidance. Our wafer shipment will decrease by approximately 10%. ASP in U.S. dollar will remain flat. Gross profit margin will be in the low 40% range. Capacity utilization rate will be at 90%. Our 2022 cash-based CapEx will be revised to USD 3 billion.

現在讓我們繼續討論 2022 年第四季的指導。我們的晶圓出貨量將減少約10%。以美元計算的平均售價將維持不變。毛利率將在40%左右。產能利用率將達90%。我們 2022 年基於現金的資本支出將修改為 30 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。感謝大家的關注。現在我們準備好提問了。

(Operator Instructions) And our first question is coming from Randy Abrams, Credit Suisse.

（操作員說明）我們的第一個問題來自瑞信的蘭迪·艾布拉姆斯。

I wanted to ask the first question just about the -- you're guiding a somewhat mild or moderate correction in the outlook fourth quarter. Could you discuss if it's still largely these consumer areas like PC, Android and the digital TV? Or is that extending now if you're seeing any broadening out to auto industrial networking or also the IDMs, which looked like had a good quarter and third quarter?

我想問第一個問題——您正在對第四季度的前景進行溫和或適度的調整。您能否討論一下主要是否仍然是 PC、Android 和數位電視等消費領域？或者，如果您看到汽車工業網絡或IDM（看起來季度和第三季度表現良好）有任何擴展，那麼這種情況現在是否會擴大？

Okay. Well, for the Q4, the auto and industrial segment remains stable for now. While the inventory level is still healthy for the auto and industrial segment in Q4, we have observed that PC and smartphone are still undergoing a prolonged inventory correction compared to the previous quarter's estimate, which indicates there's a no tangible sign of a recovery in the near term. We do foresee that downward trend for the consumer segment will continue to linger into first half 2023 due to a slow inventory digestion.

好的。那麼，第四季度，汽車和工業領域目前保持穩定。儘管第四季度汽車和工業領域的庫存水準仍然健康，但我們觀察到，與上一季的估計相比，個人電腦和智慧型手機仍在經歷長期的庫存修正，這表明近期沒有明顯的復甦跡象。學期。我們預計，由於庫存消化緩慢，消費領域的下降趨勢將持續到 2023 年上半年。

And it's our belief the bottom of this down cycle will mainly determine when the end system market starts to resume its momentum. And at this point, the visibility is still low. But in the Q4, we are able to mitigate our 8-inch fab loading to remain 100% in Q3 after swapping some allocation from notebook TV, smartphone to auto and AIoT. However, the lighter 8-inch utilization will happen in Q4 and mainly because impacted by the deteriorating market condition in the smartphone and PC or because of the inventory correction.

我們相信，這個下行週期的底部將主要決定終端系統市場何時開始恢復其動能。而此時，能見度依然很低。但在第四季度，在將部分分配從筆記型電視、智慧型手機轉向汽車和 AIoT 後，我們能夠減輕 8 吋晶圓廠的負荷，從而在第三季度保持 100%。然而，第四季8吋利用率將下降，主要是受到智慧型手機和PC市場狀況惡化或庫存調整的影響。

Randy?

蘭迪？

I'm here. Sorry, they remove me from the queue. Sorry, no, I'm back in. Okay. Yes. No, I wanted to ask my second question. Actually, taking that into consideration, is there a rough way to think, given that what you were saying on consumer and you could see a little bit of broadening where you see utilization trending toward first half. And I'm curious at this stage, 2023 now. I think originally, you were thinking a growth industry and UMC would grow. If you have an initial view for '23 industry and the UMC outlook?

我在這兒。抱歉，他們把我從隊列中刪除了。抱歉，不，我回來了。是的。不，我想問第二個問題。實際上，考慮到這一點，考慮到您在消費者方面所說的話，是否有一個粗略的思考方式，您可以看到利用率趨於上半年的情況有所擴大。我現在很好奇，現在是 2023 年。我認為最初，您認為一個成長型產業和聯華電子將會成長。您對'23產業和聯華電子的前景有初步的看法嗎？

Sure. Well, I mean, we -- after the quarter from last quarter, given the rising macro uncertainties and ongoing inventory correction, like I said, in the PC and the smartphone space, and as well as the high inflationary cost pressure, and we do foresee the semi and foundry industry will decline in 2023 now. But that's off a very high base for 2022.

當然。嗯，我的意思是，我們——在上個季度之後，考慮到宏觀不確定性上升和持續的庫存調整，就像我說的，在個人電腦和智慧型手機領域，以及高通膨成本壓力，我們確實這樣做預計半成品和代工產業將在 2023 年下滑。但這距離 2022 年的基數非常高。

And for UMC, while the visibility in 2023 is low, we still expect our 12 ASP fab will come on stream by mid-2023. And with our ASP outlook is expected to remain firm as a management's goal is to grow in line or outperform with UMC's addressable market. I kind of want to emphasize that it's within our addressable area. Yes.

對於聯電來說，雖然 2023 年的能見度較低，但我們仍然預計我們的 12 座 ASP 晶圓廠將在 2023 年中期投產。我們的平均售價前景預計將保持堅挺，因為管理層的目標是與聯華電子的目標市場保持一致或超越。我想強調它在我們的可尋址範圍內。是的。

Okay. Just (inaudible), do you expect your addressable market -- I'm just trying to understand that versus the industry down. Do you think your addressable market is growing next year?

好的。只是（聽不清楚），你是否期望你的目標市場——我只是想了解這一點與產業下滑的情況。您認為明年您的目標市場會成長嗎？

I think given the current condition, it will be very challenging to see that up. I think it will probably decline in 2023.

我認為鑑於目前的情況，要實現這一點將非常具有挑戰性。我認為2023年可能會下降。

Okay. I understand.

好的。我明白。

And I think we should be able to give you much more clarity for another quarter. Yes, in January. Yes.

我認為我們應該能夠為您提供下一個季度的更多資訊。是的，一月。是的。

Okay. No, that's helpful. And if I could ask on the 2 parts on the CapEx. One is that -- if there was a timing the TWD 3.6 billion coming to TWD 3 billion, as it was tracking a bit behind through the year, where are you pushing out certain projects? And if there's a view then, would that be additive or a view on next year?

好的。不，這很有幫助。我是否可以詢問資本支出的兩個部分。其中一個問題是，如果有一個時間安排，從 36 億新台幣到 30 億新台幣，因為今年的進度有點落後，那麼您將在哪裡推出某些項目？如果有一個觀點，那會是附加的還是明年的觀點？

And the other part of the question, just on that P6. Is that still -- it had LTAs tied to it? Are those LTAs still covered? Or are you seeing customers trying to reschedule or some change where some of that capacity in this environment may not be utilized?

問題的另一部分，就在 P6 上。這仍然是——它有長期協議嗎？這些長期協議是否仍受保障？或者您看到客戶嘗試重新安排或進行某些更改，導致此環境中的某些容量可能無法利用？

Okay. So for the first 2022 CapEx cut, there are 2 reasons that led to the cut for the cash-based CapEx. First, it was primarily due to the equipment vendor delayed, all right? So and the second is given the current downturn, we are reprioritize some of the projects to respond to the current cyclicality. Meanwhile, we're still keeping our commitment to our P6 LTA customers. And the question for the -- is there any change in the LTA customer for P6. Right now, both customers and us are taking serious and commitment to this relationship, so commitments and partnerships. So we have not seen any significant changes in this space. So the LTA has some impact but is more in the near term, now with the T6.

好的。因此，對於 2022 年首次資本支出削減，有兩個原因導致現金資本支出削減。首先，這主要是由於設備供應商延遲造成的，好嗎？因此，第二個考慮到當前的經濟低迷，我們正在重新調整一些項目的優先順序，以應對當前的周期性。同時，我們仍然恪守對 P6 LTA 客戶的承諾。問題是 P6 的 LTA 客戶是否有任何變化。目前，客戶和我們都在認真對待並致力於這種關係，即承諾和夥伴關係。所以我們沒有看到這個領域有任何重大變化。因此，LTA 有一些影響，但在短期內影響更大，現在是 T6。

Okay. Just clarify that. So some impact on the near term, not PC, what's happening to the other LTAs? And then I'll get back in the queue.

好的。只是澄清一下。那麼，短期內會產生一些影響，而不是 PC，其他長期協議會發生什麼情況呢？然後我會回到隊列中。

Sure. I mean, we do see the -- while this going through this market turbulence and obviously, not all our customers in milk from it. And while this inventory correction continued to worsen and our customers are trading this LTA. While they're trading it seriously, but they are reparation of their product mix and reflect the end markets as well as minimize the -- in order to minimize some of the obligation to avoid some of the LTA penalties.

當然。我的意思是，我們確實看到了——雖然這正在經歷市場動盪，但顯然，並不是我們所有的客戶都用它來生產牛奶。儘管庫存調整持續惡化，但我們的客戶正在交易此長期協議。雖然他們正在認真地進行交易，但他們正在修復他們的產品組合併反映最終市場，並最大限度地減少 - 為了最大限度地減少避免一些長期協議處罰的義務。

And so but as a result, there are some LTA penalties already happening, but it's very insignificant. And we don't want to get into specific on the LTAs, but at this point, all subject to business are still operating compliant to the LTA terms.

所以，但結果是，一些長期協議處罰已經發生，但這是非常微不足道的。我們不想詳細討論長期協議，但目前，所有受業務約束的業務仍然遵守長期協議條款。

Next question, Gokul Hariharan, JPMorgan.

下一個問題是，Gokul Hariharan，摩根大通。

First of all, could you talk a little bit about what we are seeing? I think you did call out 8-inch one area where there is some utilization slack. Could we talk about 28-nanometer and the rest of the 12-inch portfolio looks like 20-nanometer still remains pretty solid in terms of utilization? Are we seeing slack in other parts like 40, 65, et cetera, in Q4 and as we look into Q1? And how do we expect utilization to trend in first half? Obviously, not very clear at this point, but are we looking at utilization going all the way back to like 80% or even below 80% as we have seen in the past cycles? That's my first question.

首先，您能談談我們所看到的情況嗎？我認為您確實指出了 8 英寸區域存在一些利用率鬆弛。我們能否談談 28 奈米，而 12 吋產品組合的其餘部分看起來 20 奈米在利用率方面仍然相當穩定？當我們研究第一季時，我們是否在第四季和第一季看到其他部分（例如 40、65 等）出現疲軟？我們預期上半年的使用率趨勢如何？顯然，目前還不是很清楚，但我們是否會像過去週期中看到的那樣，利用率一路回到 80% 甚至低於 80%？這是我的第一個問題。

Okay. Well, actually, this is a big question. Let me see if I can, I got older. First of all, we touched the 8-inch, and your question is about 28. If I may, I'd like to kind of go back to about the segment first and before I get to that. In Q3, we actually see the automotive revenue growth into double digits. And the consumer grew low single digits. Communication grew low single digit, while the computing has declined about high single digits.

好的。嗯，實際上，這是一個很大的問題。讓我看看是否可以，我已經長大了。首先，我們談到了 8 英寸，你的問題是關於 28 英寸的。在第三季度，我們實際上看到汽車收入成長達到兩位數。消費者成長幅度較低，個位數。通訊成長了低個位數，而計算則下降了高個位數。

And while we're swapping those, like I mentioned earlier, swapping between the auto industrial and PC and smartphone, I mentioned earlier, we'll be able to manage that full-loading. Now going into the Q4, we see all segments are declining, except automotive. So on a sequential point of view, the automotive, we do see a continuous double-digit growth and while the others start seeing a declining. And I think that, that happened to have impact to our 8-inch loading because PC and smartphone is majorly impacting the 8-inch.

當我們交換這些時，就像我之前提到的，在汽車工業、個人電腦和智慧型手機之間交換時，我之前提到過，我們將能夠管理滿載。現在進入第四季度，我們看到除汽車以外的所有細分市場都在下降。因此，從連續的角度來看，汽車產業確實出現了持續兩位數的成長，而其他產業則開始出現下降。我認為，這恰好對我們的 8 英寸負載產生了影響，因為 PC 和智慧型手機主要影響 8 英寸。

However, the lighter 8-inch utilization in Q4, I mentioned, it was impacted by the continuous noble and TV inventory correction and our 12-inch product portfolio come with a more higher differentiation with the leading specialty technology as well as some of the diversified market segment and sub-segment. And therefore, it's less vulnerable at this point compared to the 8-inch in Q4.

然而，我提到，第四季度8 吋利用率較低，這是受到貴族和電視庫存持續調整的影響，而我們的12 吋產品組合憑藉領先的專業技術以及一些多元化的產品組合，具有更高的差異化。因此，與第四季度的 8 英寸相比，它目前的脆弱性較小。

Okay. While we see this correction lingering into first half and we have to -- we probably have to report the Q1 when the time comes. Now we know the 12-inch is actually much healthier than the 8-inch in Q4. For the 28 specifically, is part of that. And with our resilience of 28 mainly come from the robust demand from our targeted segment, such as the OLED driver and automotive space. So at this point, the 28 remains healthy at least for Q4.

好的。雖然我們看到這種調整一直持續到上半年，但我們必須在時機成熟時報告第一季的情況。現在我們知道 12 英寸實際上比第四季度的 8 英寸健康得多。特別是對於 28 來說，是其中的一部分。我們 28 的韌性主要來自我們目標細分市場的強勁需求，例如 OLED 驅動器和汽車領域。因此，目前來看，28 人至少在第四季仍然保持健康。

And if we look at the 28 outlook, for the long term, we still believe 28 and 22 will be a long-lasting node, driven by the application such as ISP, OLED driver IC, where this demand will continue to grow. And we believe we're well positioned with those diversified product portfolio to capture this market opportunity. And so that's why we actually remain confident with our 28 and 22 business, mainly because they continuously strengthening our solutions and customer profile.

而如果我們看28的前景，從長遠來看，我們仍然相信28和22將是一個持久的節點，在ISP、OLED驅動IC等應用的推動下，這種需求將持續成長。我們相信，我們擁有這些多元化的產品組合，能夠很好地抓住這個市場機會。這就是為什麼我們實際上對 28 和 22 業務保持信心，主要是因為它們不斷增強我們的解決方案和客戶檔案。

And I guess I answered the 28 also the color on between the 8-inch and 28, I'm not sure if I captured all your questions.

我想我回答了 28 以及 8 英寸和 28 之間的顏色，我不確定我是否回答了您所有的問題。

Jason, that's very clear. One part is on utilization. I think you talked about 90% utilization in Q4. Should we expect utilizations to go all the way back down to 80% or below like previous downturns? Or you have some offsets in first half, which could kind of protect some of the utilization?

傑森，這很清楚。一部分是關於利用率。我想您談到了第四季度的利用率為 90%。我們是否應該預期利用率會像之前的低迷時期一樣一路回落至 80% 或更低？或者您在上半年有一些抵消，這可以保護一些利用率？

Yes. At this point, we won't be able to answer a question like this. I mean, as we mentioned earlier, still not be able to pinpoint with the trough of the cycle or where is the end of the inventory correction. So we will only be able to give you guidance on a quarter-on-quarter basis.

是的。至此，我們無法回答這樣的問題。我的意思是，正如我們之前提到的，仍然無法確定週期的低谷或庫存修正的終點在哪裡。因此，我們只能按季度為您提供指導。

My second question is on pricing. I think if I go back and look at pricing, blended pricing, especially. In every downturn, we see some degree of price compression. Magnitude is different based on each downturn. But if you look at the last 5, 6 downturns, we've already seen price compression on a blended basis.

我的第二個問題是關於定價。我想如果我回去看看定價，尤其是混合定價。在每次經濟低迷時期，我們都會看到一定程度的價格壓縮。每次經濟衰退的幅度都不同。但如果你看看過去 5、6 次經濟低迷，我們已經看到了混合基礎上的價格壓縮。

Now this time around, you have been a lot more resilient in your communication about pricing to the market as well as customers. Could you talk a little bit about what is your pricing strategy as we go into the downturn, especially as you mentioned, we still don't see the trough in terms of where this inventory cycle could drop out? So if your pricing strategy is going to be dependent on how utilization shapes up or you would basically take a pricing strategy such that even if utilization is much weaker because the downturn is longer, pricing is something you would not be very variable on?

這次，您在與市場和客戶進行定價溝通時變得更加靈活。您能否談談當我們進入低迷時期時您的定價策略是什麼，特別是正如您所提到的，我們仍然沒有看到庫存週期可能下降的低谷？因此，如果您的定價策略將取決於利用率如何形成，或者您基本上會採取這樣的定價策略：即使利用率因經濟低迷時間較長而大幅減弱，定價也不會變化很大？

Okay. Well, I mean the foundry is a cyclical industry. So there is a couple of layers answer to that. One is the ASP position. Our strategy and position on ASP is the ASP will reflect both product mix and pricing adjustments. While we continue to improve our product mix, our pricing strategy is to reflect our value proposition on technology leadership and differentiation. We do value longer-term partnership over the near-term cyclical factors. We believe the pricing reflect our market value and proposition. And so we would like to continue to strengthen our relationship with the customer on a long-term basis and mutually growing with our customers. So that's our view in terms of ASP.

好的。嗯，我的意思是鑄造廠是一個週期性產業。所以有幾個層面的答案。一是ASP職位。我們對 ASP 的策略和立場是 ASP 將反映產品組合和定價調整。在我們不斷改進產品組合的同時，我們的定價策略是反映我們在技術領先和差異化方面的價值主張。我們確實重視長期合作關係，而不是短期週期性因素。我們相信定價反映了我們的市場價值和主張。因此，我們希望繼續加強與客戶的長期關係，並與客戶一起成長。這就是我們對 ASP 的看法。

However, if for the short term, because the cyclicality reasons between the ASP business loading or utilization, we do examine that. Under the recent market conditions, we believe the trade-off between the loading and price will end up with very limited benefits in demand creation because the weakness in sell-through and demand. So unless we see a significant benefit that I don't think that will be much change on that. And this current point, for our pricing in 2023, we expect it to be firm, but we closely monitor it, if there is a benefit to it.

然而，如果從短期來看，由於 ASP 業務負載或利用率之間的周期性原因，我們確實會對此進行研究。在最近的市場狀況下，我們認為，由於銷售和需求疲軟，裝載量和價格之間的權衡最終對創造需求的好處非常有限。因此，除非我們看到顯著的好處，否則我認為這不會有太大改變。目前，對於我們 2023 年的定價，我們預計它會保持穩定，但我們會密切關注它是否有好處。

Okay. That's very clear. I'll go back in the queue.

好的。這非常清楚。我會回到隊列中。

Next question, Laura Chen of Citigroup.

下一個問題是花旗集團的 Laura Chen。

My question is about the recent intensified geopolitical risk. I'm just wondering what's the implication to UNC, do you potentially see more opportunity to further gain share at the expense of your Chinese peers? Or you are actually seeing more intensified competition in your Chinese domestic market? That's my first question.

我的問題是關於近期地緣政治風險加劇的問題。我只是想知道這對北卡羅來納大學意味著什麼，你是否有可能看到更多機會以犧牲中國同行的利益來進一步獲得份額？或者您實際上看到中國國內市場的競爭更加激烈？這是我的第一個問題。

Sure. Well, with the recent U.S. export control and regulation, the saving this month and the impact on UMC has been limited as the restriction mainly target more advanced nodes that are not part of the UMC's addressable market. We are in close communication with the suppliers and customers as they navigate the new rule of schools announced earlier this month. Our current focus is focused on compliance as we believe the combine is one of our key business principles and we will continue to monitor the development of the U.S. export control policies closely and take risk management measure as necessary or even evaluate if there's any opportunity. But at this time, I think it's still premature and we're closely monitoring the progress. Yes.

當然。嗯，隨著美國最近的出口管制和監管，本月的節省和對聯電的影響有限，因為限制主要針對不屬於聯電目標市場的更先進節點。我們正在與供應商和客戶保持密切溝通，以幫助他們了解本月早些時候宣布的新學校規則。我們目前的重點是合規性，因為我們相信合併是我們的關鍵業務原則之一，我們將繼續密切關注美國出口管制政策的發展，並在必要時採取風險管理措施，甚至評估是否有任何機會。但目前，我認為還為時過早，我們正在密切關注進展。是的。

Okay. So you haven't really seen any movement in terms of the clients' order flow because of this event?

好的。那麼您並沒有真正看到客戶訂單流因該事件而發生任何變化？

Well, I mean, they certainly are talk and but I don't think there's at a stage of a movement yet. No.

嗯，我的意思是，它們當然只是說說而已，但我認為還沒有達到運動的階段。不。

And also, my second question is about the IDM outsourcing trends. You also mentioned that the auto demand is still quite strong at least for this quarter. But we know that like a tax instrument just reported this morning, they also see some weakness happening aside from the auto application. Since those IDMs, they also build up their own capacity. So I'm just wondering what's your view on those IDM outsourcing trend. Is that sustainable in particular, we see a lot of uncertainties ahead into next year?

另外，我的第二個問題是關於 IDM 外包趨勢。您也提到，至少本季汽車需求仍然相當強勁。但我們知道，就像今天早上剛報導的稅收工具一樣，除了汽車應用之外，他們還發現了一些弱點。自從這些 IDM 以來，他們也建立了自己的產能。所以我想知道您對 IDM 外包趨勢有何看法。特別是，這種情況是否可持續，因為我們看到明年存在許多不確定性？

Well, first of all, the key word is adjust. You mentioned that the U.S. customer has just announced their view in terms of the market. And obviously, is just happening. But in our view, the auto and industrial segment remains stable for now, that reflected in our Q3 because they'd be able to offset some of the weakness in other segments.

嗯，首先，關鍵字是調整。您提到美國客戶剛剛發表了他們對市場的看法。顯然，這一切才剛發生。但我們認為，汽車和工業領域目前保持穩定，這反映在我們的第三季度，因為它們能夠抵消其他領域的一些疲軟。

And while we're going into the end of the year as well as Q1, we remain cautious, and we were definitely working closely with our customer in terms of outlook. Meanwhile, for the auto and industrial, for the longer-term perspective, it's our target segment and the focus. And we will continue expanding our auto business from both IDM customer and the fabless customer through both technology innovation and capacity expansion alignment. Because IDM customers tend to have their own capacity plan, so it's important that we put in the capacity expansion alignment as a part of our ongoing discussion with them.

雖然我們即將進入年底和第一季度，但我們仍然保持謹慎，我們肯定會在前景方面與客戶密切合作。同時，對於汽車和工業來說，從長遠來看，這是我們的目標細分市場和重點。我們將透過技術創新和產能擴張協調，繼續從 IDM 客戶和無晶圓廠客戶拓展我們的汽車業務。由於 IDM 客戶往往有自己的產能計劃，因此我們將產能擴張調整作為與他們持續討論的一部分，這一點很重要。

Next question Sunny Lin of UBS.

下一個問題是瑞銀的 Sunny Lin。

My first question is on 28-nanometer. I understand your expansions are all based on the steady long-term demand outlook. But I wonder what kind of factors could potentially trigger you to reconsider the extension timing and scale? And perhaps because of LTAs, do you still have some flexibilities in terms of the adjustments?

我的第一個問題是關於 28 奈米的。據我了解，你們的擴張都是基於穩定的長期需求前景。但我想知道什麼樣的因素可能會促使您重新考慮延期時間和規模？也許是因為長期協議的緣故，你們在調整方面還有一些彈性嗎？

Well, I mean like I said, for the longer term out, we do believe or 28 or 22 and 22 will be a long-lasting node. And so we actually feel comfortable with our perspective on this. And our -- the reason market dynamics does not change our long-term view and as well our long-term relevance in this government with the customers. And we will continue pursue this. And as we believe it is a 3 spot for many applications. And while this demand will continue to grow. And we are confident with our solution offering and our 28 business can be maintained at a healthy level in 2023 and beyond.

嗯，我的意思是就像我說的，從長遠來看，我們確實相信 28 或 22 和 22 將是一個持久的節點。所以我們實際上對我們對此的看法感到滿意。我們的原因是市場動態不會改變我們的長期觀點以及我們在本屆政府中與客戶的長期相關性。我們將繼續追求這一目標。我們相信它對於許多應用程式來說都是第三名。而且這種需求還會持續成長。我們對我們的解決方案充滿信心，我們的 28 項業務可以在 2023 年及以後保持在健康水平。

So for the LTA, I kind of touched that earlier already for the P6. But maybe I can give a bit of our view on the LTA in general. The LTA may not be able to mitigating or shortfall because of the market volatility. But with LTA, the customer will typically reprioritize their product mix, even reallocating their multiple sorting product to UMC to fulfill their obligations. And we actually still believe this LTA help. And at this current downturn cycle, we not just look at the P6 or 28 LTA. We're actually taking this opportunity to re-exam our LTA selection criteria to make sure that we align with the megatrends and other growing markets as we believe the LTA contract could help to mitigate downturn cycle and demonstrate the mutual commitment for -- from both customer and UMC. And so that's kind of -- I'd like to share that with you in instoingto so called P6 LTA situation. Yes.

所以對於 LTA，我之前已經在 P6 上觸及過這一點。但也許我可以談談我們對長期協議的整體看法。由於市場波動，長期協議可能無法緩解或短缺。但透過 LTA，客戶通常會重新調整其產品組合的優先順序，甚至將其多重分選產品重新分配給 UMC 來履行其義務。事實上，我們仍然相信 LTA 會有所幫助。在當前的低迷週期中，我們不僅僅關注 P6 或 28 LTA。實際上，我們正​​在藉此機會重新審查我們的長期協議選擇標準，以確保我們與大趨勢和其他不斷增長的市場保持一致，因為我們相信長期協議合約可以幫助緩解經濟衰退週期並展示雙方的共同承諾客戶和聯華電子。因此，我想在所謂的 P6 LTA 情況中與您分享這一點。是的。

Got it. That's very helpful. So a quick follow-up on your P6 expansion. I think in July, you expected 2023 capacity increase for the total company could be about 5%. Now with lower CapEx reduction. I wonder what's your latest guidance for next year's capacity increase?

知道了。這非常有幫助。快速跟進您的 P6 擴充。我認為在 7 月份，您預計 2023 年整個公司的產能成長可能約為 5%。現在資本支出減少幅度較低。我不知道您對明年產能成長的最新指導是什麼？

Well, at this point, the number is slightly below 5%. So it's still very close to 5. And the initial ramp was kind of still started from mid-2023, but you will reach to 12 a month by the end of 2023. So the rent profile got changing a little bit.

嗯，目前這個數字略低於 5%。所以它仍然非常接近 5。

Got it. So 12,000 per month by end of 2023, so maybe approaching full scale by late 2024?

知道了。那麼到 2023 年底每月將達到 12,000 個，那麼到 2024 年底可能會接近全面規模？

Well, I mean, for 2024, we still have to that's still in progress right now. We react to the current market downturn and start adjusting our 2022 spending and which reflects the 2023 rent. And at the same time, we will look into 2023 CapEx as well. But at this point, it's kind of too early to report the 2023 CapEx as well as the end profile, yes.

嗯，我的意思是，到 2024 年，我們仍然必須這樣做，目前仍在進行中。我們對當前的市場低迷做出反應，並開始調整 2022 年的支出，這反映了 2023 年的租金。同時，我們也將研究 2023 年的資本支出。但目前來說，報告 2023 年資本支出以及最終概況還為時過早，是的。

Got it. My second question is to follow up on LTAs. And so one part is that if a customer has LTA at both existing capacities and also your new capacities? Would there be a case that they trim the production siting capacity but remain committed to the new supply, in that case, how would you mitigate the impact on your existing capacity?

知道了。我的第二個問題是跟進長期協議。因此，一個問題是，如果客戶在現有產能和新產能上都擁有 LTA？是否會出現他們削減生產選址產能但仍致力於新供應的情況，在這種情況下，您將如何減輕對現有產能的影響？

Well, I mean our commitment to the LTA customers impact decide the ramp profile change on the new capacity, but our commitment to it is still there. So we have to manage the base capacity to support them, just to make sure that we fulfill our obligations. And at the same time, we will continue to align with all customers with their outlook to make sure that we don't cause any surprises for both LTA customers as to the non-LTA customer.

嗯，我的意思是，我們對 LTA 客戶的承諾影響決定了新產能的坡道變化，但我們對此的承諾仍然存在。因此，我們必須管理支持他們的基礎能力，以確保我們履行我們的義務。同時，我們將繼續與所有客戶的前景保持一致，以確保我們不會為 LTA 客戶和非 LTA 客戶帶來任何意外。

And also there is a pricing differences between the existing capacity and newly built capacity, even though they both LTA or that the pricing are different.

而且現有容量和新建容量之間也存在定價差異，即使它們都是長期協議或定價不同。

That's right. And so the other part of my LTA question is I think in recent weeks, (inaudible) to talk about allowing customers to extend the duration of the LTAs. Would that be a practice that you also consider?

這是正確的。因此，我的長期協議問題的另一部分是我認為最近幾週（聽不清楚）談論允許客戶延長長期協議的期限。您也會考慮這種做法嗎？

Well, I mean we always understand customers' requests. And but the in principle is we have to treat those LTA contracts seriously. And so we will provide certain flexibility, but not to the extent you mentioned about it. So at this point, as I mentioned, the customer is still supporting us with try to reprioritize their product mix, reallocating some of their multiple source products to UMC. If they are able to fulfill the 100% of their obligation and then we will comply to the LTA terms.

嗯，我的意思是我們始終了解客戶的要求。但原則上我們必須認真看待這些長期協議合約。因此，我們將提供一定的靈活性，但不會達到您所提到的程度。因此，正如我所提到的，此時客戶仍然支援我們嘗試重新調整他們的產品組合的優先級，將他們的一些多源產品重新分配給聯華電子。如果他們能夠履行 100% 的義務，那麼我們將遵守 LTA 條款。

Next question, Bruce Lu of Goldman Sachs.

下一個問題是高盛的盧小龍。

I think you just mentioned that your pricing reconfirmed and you do the exercise to exam the utilization in the ASP erosion. So which means that given the current 90% utilization rate, you have no plan to change your pricing or for the first quarter next year, most likely is going further out, and you have no plan to change your pricing assumption as well. So can you tell us what is the special or help us to go through the exam you did and make sure we have the right understanding if we are more negative or more positive for the outlook for 2023?

我認為您剛剛提到您的定價已重新確認，並且您進行了練習以檢查 ASP 侵蝕中的利用率。因此，這意味著，考慮到目前 90% 的利用率，您沒有計劃改變定價，或者明年第一季很可能會更進一步，而且您也沒有計劃改變定價假設。那麼您能否告訴我們有什麼特別之處，或幫助我們完成您所做的檢查，並確保我們對 2023 年的前景是更消極還是更積極有正確的理解？

I mean, right now, from an end market standpoint, our view of 2023 is the market will decline. So it will be a challenging year. But from an ASP standpoint, I think there's a limited trade-off between the loading and pricing. And mainly because of the weakness in the sell-through, the end market. If there is no elasticity of the ASP and with the volume, and so the benefit will be is hard to capture. So that's why we think the first criteria is we have to understand the end market momentum.

我的意思是，目前從終端市場的角度來看，我們對 2023 年的看法是市場將會下滑。因此，這將是充滿挑戰的一年。但從 ASP 的角度來看，我認為載入和定價之間的權衡是有限的。主要是因為終端市場的銷售量疲軟。如果沒有彈性的ASP和配合量，那麼帶來的好處將是難以捕捉的。因此，我們認為第一個標準是我們必須了解終端市場的動力。

And then we will talk about the market share consideration, so on and so forth. So they are different condition and criteria to exempt. And but at this point, we're kind of -- we're finding difficulty even we pass the first layers because we haven't seen any benefit on that. And we do believe our pricing reflects our relevance with the entire supply chain. And so we just have to continue look at the longer-term perspective and make sure that we position ourselves to capture the opportunity, not just looking at the short-term tactics. But if the short-term tactics doesn't help, I mean, it's an option we can take, but not at this current point.

然後我們會談論市場份額的考慮等等。因此，它們的豁免條件和標準不同。但在這一點上，即使我們通過了第一層，我們也發現了困難，因為我們還沒有看到任何好處。我們確實相信我們的定價反映了我們與整個供應鏈的相關性。因此，我們必須繼續著眼於更長期的前景，並確保我們定位自己以抓住機會，而不僅僅是著眼於短期策略。但如果短期策略沒有幫助，我的意思是，這是我們可以採取的選擇，但目前還不行。

So can we assume that even the capacity generate going down to 80% or even 75%, the pricing strategy will remain unchanged?

那麼我們是否可以假設，即使產能下降到80%甚至75%，定價策略也將維持不變？

I mean, I think it's not gauged by the utilization. It's gauged by if the pricing will trigger the higher utilization results.

我的意思是，我認為這不是透過利用率來衡量的。它是透過定價是否會觸發更高的利用率結果來衡量的。

I see. I understand. Okay. The second thing is that I think that for your 20-nanometer, the revenue is much more resilient than your other notes given your product and customers' choice or new strategy or better execution. However, your driver IC revenue exposure is still high, your consumer product exposure is still high, which creates a lot of fluctuation for your business. So what's your plan and strategy to change that? And how can we -- how or when we can see some improvement like your other node can be resilient as 28?

我懂了。我明白。好的。第二件事是，我認為，考慮到您的產品和客戶的選擇或新的策略或更好的執行，對於您的 20 奈米，收入比您的其他註釋更具彈性。然而，你的驅動IC收入敞口仍然很高，你的消費產品敞口仍然很高，這給你的業務帶來了很大的波動。那麼您改變這現狀的計畫和策略是什麼？我們如何—如何或何時可以看到一些改進，例如您的其他節點可以像 28 一樣具有彈性？

Well, I mean, it's our goal to continue with the customer and product portfolio enhancement activities. And we're still in the middle of the process that. And this one is we have to continue to deliver our technology innovation. And in order to -- with the target market, and so we can improve the portfolios, we will diversify our customer and market segments. So this effort is continues. We have been doing that for the past few years, a couple of years, and we see some through of that. But we're not there yet. I think we're still in the process to continue with the product and the portfolio enhancement. And we will continue to do that. And by doing that, we believe we will continue to help with that. I mean at the end of the day, it's hard to immune from the entire market long term, but with a better product mix and with a more compelling solution to our customer, we do think we can be resilient or even better than the industry's performance.

嗯，我的意思是，我們的目標是繼續進行客戶和產品組合增強活動。我們仍處於這個過程的中間。這就是我們必須繼續提供我們的技術創新。為了針對目標市場，我們可以改進產品組合，我們將實現客戶和細分市場的多元化。因此，這項努力仍在繼續。過去幾年，我們一直在這樣做，我們已經看到了一些成果。但我們還沒到那一步。我認為我們仍在繼續改進產品和產品組合。我們將繼續這樣做。透過這樣做，我們相信我們將繼續為此提供幫助。我的意思是，歸根結底，從長遠來看，很難免受整個市場的影響，但透過更好的產品組合和對客戶更有吸引力的解決方案，我們確實認為我們可以保持彈性，甚至比行業表現更好。

Well, can you elaborate a bit more Because for 28, it somehow has been more differentiated stuff for like -- for other stuff or OLED? But it's not easy for investors to visualize the like 8-inch. What can you do for the differentiated 8-inch business? Or what can you do for your 65 or 90 nanometer? Can you elaborate a little bit more?

好吧，你能詳細說明一下嗎？但對投資人來說，想像8吋這樣的產品並不容易。差異化的8吋業務你能做什麼？或者您可以為 65 或 90 奈米做什麼？能詳細說明一下嗎？

For 8-inch, for instance, on 8-inch, there are structural demands coming from EV power management, even for the migration of DDR5 power management and joint development program with IDM to support their growth in their respective market segment. So there are still some structural demand in some of the areas, and we're going to continue to pursue those target market space. And for the mature legacy 12-inch, for instance, 35-40 the MCU, the (inaudible) memory just come in to 40 now with the automotive market. And by expanding our capacity into the nonvolatile memory, we think that will actually help the resilient as well.

以8吋為例，在8吋上，電動車電源管理有結構性需求，甚至有DDR5電源管理的遷移以及與IDM的聯合開發計劃，以支持其各自細分市場的成長。因此，某些領域仍存在一些結構性需求，我們將繼續尋求這些目標市場空間。對於成熟的傳統 12 英寸，例如 35-40 個 MCU，（聽不清楚）內存現在在汽車市場上剛剛達到 40 個。透過將我們的容量擴展到非揮發性記憶體，我們認為這實際上也有助於復原能力。

And so there are certain market segments that we believe that has a structural demand going forward. And so we define that as so-called a targeted market. And so the goal is you have to deliver your solution compounding solution and meeting the customers demand as well as the capacity support. And hopefully, you can be less vulnerable. I don't know if we are resilient enough, but I think our goal is trying to be less vulnerable, yes.

因此，我們認為某些細分市場未來存在結構性需求。因此我們將其定義為所謂的目標市場。因此，目標是您必須交付解決方案複合解決方案並滿足客戶需求以及產能支援。希望你能不再那麼脆弱。我不知道我們是否有足夠的彈性，但我認為我們的目標是努力減少脆弱性，是的。

Next question Szeho Ng, China Renaissance.

下一個問題是吳思浩，華興資本。

I have two questions from my side. First one regarding the revenue breakdown, right? I believe for the others category at 14% in Q3, I think majority is related to automotive. Is it a fair assumption?

我有兩個問題。第一個是關於收入細分的，對吧？我相信第三季其他類別佔 14%，我認為大多數與汽車相關。這是一個公平的假設嗎？

That's correct assumption, yes.

這是正確的假設，是的。

Okay. All right. And maybe down to, let's say, 3-5 years from now, is it fair to assume that percentage would double? Is it rate assumption?

好的。好的。也許從現在起 3-5 年後，假設該百分比會翻倍是否公平？是利率假設嗎？

Well, I mean, with like the Bruce asked earlier, is our target to reaching greater than 40% by 2025 with that revenue can come from the mega trend. That includes the automotive, yes.

嗯，我的意思是，就像 Bruce 之前問的那樣，我們的目標是到 2025 年達到 40% 以上，收入可以來自大趨勢。是的，這包括汽車。

I see. All right. Okay. Second one maybe for Chi-Tung. Regarding the recent approval for us to buy back the remaining 30% of UMC Xiamen. So when would that transaction be closed? And would there be any -- how should we ambition regarding the P&L implication on the company?

我懂了。好的。好的。第二個可能是給志同的。關於最近批准我們回購廈門聯電剩餘30%的股權。那麼該交易何時結束？我們該如何看待損益表對公司的影響？

Yes. UMC or the UMC Xiamen is already making profits. And as you can tell from our financial report, there's a minority interest of positive profit actually that for the 30%-ish outside shareholder of UMC. Once we complete 100%, then we will be able to face so this minority interest. And our goal, the mandate is to allow UMC to complete the transaction, we see a window of 3 years, but we certainly intend to do so in a faster expedite manner.

是的。聯電或聯電廈門已經開始獲利。正如您從我們的財務報告中可以看出的那樣，對於聯華電子 30% 左右的外部股東來說，實際上有少數股東獲得正利潤。一旦我們完成100%，那麼我們就能夠面對這樣的少數股東權益。我們的目標，授權是讓聯華電子完成交易，我們看到3年的時間窗口，但我們當然打算以更快的速度做到這一點。

Okay. So that means between 3 years or you haven't decided to exact timing, right?

好的。所以這意味著 3 年之間或你還沒有決定確切的時間，對嗎？

Yes, 3 years the window of the timing, but we won't wait for 3 years.

是的，三年的時間窗口，但我們不會等三年。

I see. Would that happen next year realistically?

我懂了。明年這真的會發生嗎？

There's still some technical issues, and we won't be able to tell you the year, but our intention is work hard on this execution of this buyback.

目前還存在一些技術問題，我們無法告訴您具體年份，但我們的目的是努力執行本次回購。

I see. Got you. And once the transaction is completed, would there be a one-off P&L impact?

我懂了。明白你了。一旦交易完成，是否會對損益產生一次性影響？

No, there won't be any one-off impact. Just we don't need to post this minority interest for the outside shareholders.

不，不會有任何一次性影響。只是我們不需要為外部股東提供少數股東權益。

I see. Anyway a small number right now the minority interest to group.

我懂了。不管怎樣，現在有一小部分人屬於少數群體。

Next question, Charlie Chan of Morgan Stanley.

下一個問題是摩根士丹利的陳查理。

It still very good results. I mean the market challenging. So my first question is about your 14-nanometer. So Jason, maybe a kind of a long-term question about how much of the 28-nanometer demand today or will start to transfer to 40-nanometer domain coming 3 to 5 years? And I think as it before, whether UMC has any advantage for the 14-nanometer FinFET? That's my first question.

效果還是非常好的。我的意思是市場充滿挑戰。所以我的第一個問題是關於你們的 14 奈米。 Jason，也許是一個長期問題，即今天或未來 3 到 5 年內，有多少 28 奈米需求將開始轉移到 40 奈米領域？我和之前一樣想，聯華電子在14奈米FinFET上是否有優勢？這是我的第一個問題。

So the question is about 14%, right?

所以問題是大約14%，對嗎？

Yes.

是的。

Yes, 14.

是的，14。

Well, we currently -- we are investing in growing our 28/22 technologies, like you said and along with the capacity expansion because we believe we expect the increase of market potential with increase in customer adoption. The 14 things that from a technology standpoint, we have entered for a few years ago. But on the capacity expansion plan, our current approach is still aligned to the existing 28-nanometer customer with their product transition. And so we'll probably will gradually address that. But at this time, we still focus on the 28 and 22 expansion. Expansion, yes.

嗯，我們目前正在投資發展我們的 28/22 技術，正如您所說，以及產能擴張，因為我們相信，隨著客戶採用率的增加，我們預計市場潛力也會增加。從技術角度來看，我們幾年前就已經進入了 14 件事。但在產能擴張計畫上，我們目前的做法仍是與現有28奈米客戶的產品過渡保持一致。所以我們可能會逐漸解決這個問題。但此時我們的重點仍是28和22擴展。擴張，是的。

So because it's also linked to that geopolitical risk issue, right? Because now China's fabrication for 14-nanometer FinFET is restricted, right? So as a company so do you think that you should accelerate a little bit your 40-nanometer in preparation for potential demand from China customers if they need a 14-nanometer FinFET foundry service 3 to 5 years later?

因為它也與地緣政治風險問題有關，對嗎？因為現在中國14奈米FinFET的製造受到限制，對嗎？那麼，作為一家公司，如果中國客戶在 3 到 5 年後需要 14 奈米 FinFET 代工服務，您是否認為應該稍微加快 40 奈米的進程，為中國客戶的潛在需求做好準備？

Believe me, the 14 is on very top of this. We do have -- we do pay attention to the 14 and it's an important topic for us. We're not going to abandon the 14. So but we are examining a few things. One is from the priority standpoint and the timing of that. Right now, we founded by certain boundaries for instance, on these ROI-driven policies. We want to make sure the -- when we expand the opportunity for us to invest and where will we invest first. So at this point, we're putting the 28 ahead of the 14, but it doesn't mean that change -- I mean that doesn't change. So it does come out to -- because the market dynamic changes, 14 become much more attractive than 28, yes, the priority will shift. Yes.

相信我，14 是最重要的。我們確實關注了 14 號比賽，這對我們來說是一個重要的話題。我們不會放棄 14。一是從優先順序和時機的角度來看。目前，我們在這些投資報酬率驅動的政策上建立了某些界線。我們希望確定—何時擴大投資機會以及我們將首先投資哪裡。所以在這一點上，我們將 28 放在 14 之前，但這並不意味著改變 - 我的意思是這不會改變。因此，由於市場動態發生變化，14 號變得比 28 號更具吸引力，是的，優先順序將會發生變化。是的。

Okay. That makes sense. And a couple of very quick questions. Do you see a single change that (inaudible) your customers' inventory are declined this quarter? Or do you think the inventory continues to go up at your customers?

好的。這是有道理的。還有幾個非常簡短的問題。您是否發現本季客戶庫存下降（聽不清楚）的單一變化？或者您認為客戶的庫存會持續增加嗎？

Well, on the PC and the smartphone space, like we report earlier, we see the digestion actually slower than we expected from us previously estimated. So we don't see that tie up, but we see a very slow digestion. Yes, because the inventory buildup can be controlled by its new wafer starts. And but for the -- is the inventory to be depleted, that requires a sell-through. So I think the challenges that we have seen is the end market sell-through situation. And we just have to closely watch that. If the sell-to government, I think that the timing of that will probably accelerate. But that remains to be seen at this point, yes, because the overall macroeconomic environment, yes.

嗯，在個人電腦和智慧型手機領域，就像我們之前報導的那樣，我們發現消化實際上比我們之前估計的預期要慢。所以我們沒有看到這種聯繫，但我們看到消化非常緩慢。是的，因為庫存累積可以透過新晶圓開工來控制。但對於庫存即將耗盡的情況，這就需要進行銷售。所以我認為我們看到的挑戰是終端市場的銷售狀況。我們只需要密切注意這一點。如果是賣方政府，我認為這項進程可能會加快。但目前這一點還有待觀察，是的，因為整體宏觀經濟環境，是的。

Okay. And then switch gears to a financial question to Chi-Tung. The first question is your CapEx cuts. May I know which nodes you're cutting the demand and anything related to your Singapore new set projects?

好的。然後轉向向志東提出財務問題。第一個問題是你的資本支出削減。我可以知道您正在削減哪些節點的需求以及與您的新加坡新項目相關的任何資訊嗎？

No. Mainly as Jason just mentioned, there are 2 reasons. First of all, is the PC equipment delivery, the delivery lead time go long. So it's a delay for our P6 (inaudible) profile, but we are trying our commitment to our own LTA P6 customers. And for the current cycle, of course, we are getting more nimble and cautious. And we reprioritized several projects, and that's part of the contribution to TWD 3 billion, I mean TWD 3.6 billion to TWD 3 billion CapEx revision.

不會。首先，是PC設備的交貨期，交貨期走長。因此，我們的 P6（聽不清楚）設定檔有所延遲，但我們正在努力履行對我們自己的 LTA P6 客戶的承諾。當然，對於當前的周期，我們變得更加靈活和謹慎。我們重新安排了幾個項目的優先順序，這是 30 億新台幣貢獻的一部分，我的意思是 36 億新台幣調整為 30 億新台幣資本支出。

Yes. So, may I know any specific nodes that you kind of changed the CapEx spending?

是的。那麼，我可以知道您改變了資本支出支出的任何特定節點嗎？

This is primarily 28-nanometer, so the ramp profile got the long. So the impact will be mainly on 28-nanometer.

這主要是 28 奈米，因此斜坡輪廓變長。所以影響將主要集中在28奈米。

Okay. That's fine. So Szeho Ng, also asked about some key assumptions for gross margin. So for this year, I think you already provided the fourth quarter guidance, right? So I think I believe you can comment on the full year based. So on a full year based, in terms of the gross margin impact, how much of that comes from the so-called the cost inflation? And how much benefit coming from the NT dollar depreciation and also your kind of equipment depreciation trend?

好的。沒關係。 Szeho Ng 也詢問了毛利率的一些關鍵假設。因此，對於今年，我認為您已經提供了第四季度的指導，對吧？所以我想我相信你可以對全年進行評論。那麼，就全年毛利率影響而言，其中有多少是來自所謂的成本通膨？那麼新台幣貶值和你們這種設備的貶值趨勢有多少好處呢？

Every 1% of NT dollar depreciation may contribute about 0.4% of our absolute gross margin point. And for Q4, we are guiding for a low 40% gross margins. That will be mainly coming from a 10% lower gross margin. And in terms of depreciation, for 2023, we are seeing about 5%, 6% increase for overall depreciation.

新台幣每貶值1%，就可以貢獻我們絕對毛利率點的0.4%左右。對於第四季度，我們的毛利率指引值為 40%。這主要是由於毛利率下降了 10%。就折舊而言，2023 年，我們預期整體折舊將成長約 5%、6%。

You mean 2022 or 2023?

你是說2022年還是2023年？

2023, about 5% increase for absolute depreciation number. For 2022, we are talking about minus a decline of 5% to 6% of depreciation expenses.

到2023年，絕對折舊數量將增加約5%。對於 2022 年，我們談論的是折舊費用減少 5% 至 6%。

I see. Yes. So actually, that's a kind of a basis first next year assumption. So for next year, do you see any kind of impacted cost besides the comment depreciation because your industry peers seems to suggest that there are kind of impacted cost in the (inaudible) chemicals, wages? I'm wondering how that is going to impact your next year's gross margin?

我懂了。是的。所以實際上，這是明年的一個基礎假設。那麼，明年，除了評論折舊之外，您是否會看到任何類型的受影響成本，因為您的行業同行似乎表明（聽不清楚）化學品、工資方面存在某種影響成本？我想知道這將如何影響你們明年的毛利率？

If we set aside the utilities, which we pay higher summer utility price, which is about to over in October. The general inflation led cost increase. We are probably talking about low single digit, maybe 1% or 2%. But it varies, depends on which component you are talking about. And we are working with our customers constantly try to cope with this issue.

如果我們拋開水電費，我們將支付更高的夏季水電費，該價格即將在十月結束。總體通膨導致成本上升。我們談論的可能是低個位數，可能是 1% 或 2%。但它會有所不同，取決於您所討論的組件。我們正在與客戶一起不斷努力解決這個問題。

Okay. So to summarize next year in terms of cost of goods sold, I guess, still some inflation in terms of variable cost and your equipment depreciation will go up by 5% to 6%. But on the currency side, on a year-on-year based, I guess, probably at least a 6% NT dollar depreciation year-on-year. So that's going to offset those cost increase. Is that how you budget for next year cost of of good sold?

好的。因此，總結明年的銷售成本，我想，可變成本方面仍然會出現一些通貨膨脹，您的設備折舊將上升 5% 到 6%。但在貨幣方面，按年計算的話，我估計，大概新台幣年比至少貶值6%。因此，這將抵消這些成本的增加。您是這樣預算明年的銷售成本的嗎？

Yes, we don't do it that way. We do it from a part and up way. But I think that your model buildup. So I think most of the parameters I already shared with you.

是的，我們不會那樣做。我們從一部分開始做。但我認為你的模型建構。所以我想我已經與您分享了大部分參數。

Next question, Gokul Hariharan, JPMorgan.

下一個問題是，Gokul Hariharan，摩根大通。

I had a quick follow-up. So given that we still have a Singapore fab coming up, how should we think about CapEx direction next year? Now it's too early to give absolute guidance. But are we still thinking in the same range of TWD 3 billion kind of spending? Or do we see that the spending could come down next year given a bit of a downturn?

我進行了快速跟進。因此，考慮到我們還有一座新加坡晶圓廠即將建成，我們該如何考慮明年的資本支出方向？現在給出絕對指導還為時過早。但我們還在思考同樣30億新台幣的支出範圍嗎？或者我們認為，由於經濟下滑，明年的支出可能會下降？

Yes. First of all, you're right. It is too early to disclose the 2023 CapEx number. The full year 2023 CapEx, the cash-based CapEx budget we will update to you in January, the January month of January. But it's very subject to the market outlook. We're closely monitoring it, and then we'll report that next time, yeah.

是的。首先，你是對的。現在揭露 2023 年資本支出數字還為時過早。 2023 年全年資本支出，即基於現金的資本支出預算，我們將在一月（一月）向您更新。但很大程度取決於市場前景。我們正在密切監視它，然後我們下次會報告，是的。

Okay. But any directional comments? Is it going to be flat, down, up?

好的。但有什麼方向性的評論嗎？它會平坦、向下、向上嗎？

Really difficult right now, but we are keeping our commitment to our LTA customers for P6 as well as P2 in Singapore. So the the ballpark schedule won't change, but the equipment or delay is something out of control, and we are working closely with our customers in order to keep our commitment.

現在確實很困難，但我們將履行對新加坡 P6 和 P2 的 LTA 客戶的承諾。因此，大致的時間表不會改變，但設備或延誤是無法控制的，我們正在與客戶密切合作，以履行我們的承諾。

Got it. And one more follow-up on 14-nanometer FinFET. Do any of your LTA commitments for the future fabs include 14-nanometer capacity as well that you need to ramp up? Or there is nothing that covers 14-nanometer in your future LTA?

知道了。以及 14 奈米 FinFET 的另一個後續產品。您對未來晶圓廠的 LTA 承諾是否包括您需要提高的 14 奈米產能？還是你未來的LTA沒有涵蓋14奈米的內容？

The current LTA covers the no technology node migration options. And but with the current visibility, that migration is from 28 to 22 but the option is embedded with the LTA program, yes.

目前的 LTA 涵蓋無技術節點遷移選項。但從目前的情況來看，遷移是從 28 到 22，但該選項已嵌入 LTA 計劃中，是的。

Ladies and gentlemen, we are taking the last question. And the last question is from Randy Abrams, Credit Suisse.

女士們、先生們，我們正在回答最後一個問題。最後一個問題來自瑞信的蘭迪·艾布拉姆斯。

Just a couple of clarifications. One for the fourth quarter, following up on Charlie's question, the low 40s. If you net the utilization decline with the currency benefit, it seems to get to only a couple of points, like about a 2-point sequential. So are there other swing factors like the utilization falling further into first quarter? Or where is it just a bit of conservatism baked in? I'm just trying to understand the moving parts.

只是一些澄清。一個是第四季的，跟進查理的問題，低 40 多歲。如果您將利用率下降與貨幣收益相抵消，那麼似乎只會達到幾個點，例如大約 2 個點。那麼，是否還有其他波動因素，例如利用率在第一季進一步下降？或者說它只是有一點保守主義的成分在哪裡？我只是想了解移動部件。

Yes. I think low 40s still with a range, and we are 47% in third quarter, fueled by the the magnitude of NT dollar depreciation. So it also depends on how you assume the currency movement in Q4 versus U.S. dollars. You mentioned Q1 loading in certain other factors as well.

是的。我認為 40 多歲仍然有一個範圍，第三季我們是 47%，受到新台幣貶值幅度的推動。因此，這也取決於您如何假設第四季度兌美元的貨幣走勢。您還提到了某些其他因素中第一季的負載。

It's a factor. Okay. Which (inaudible) are you assuming right now for the one --

這是一個因素。好的。您現在假設哪一個（聽不清楚）—

We don't assume we are taking the numbers out of the Bloomberg.

我們並不認為我們是從彭博社取得這些數據。

Okay. I understood. Okay. And then a follow-up on this payout with the high earnings this year, but heading into slowdown, what's the way to think about? You had $3 last year, but earnings went up a lot or 3-hour paid this year. How should we think about the payout level or payout ratio into off of this year's earnings?

好的。我明白了。好的。然後是今年的高收益，但進入放緩的這一派息的後續，該如何思考？去年你有 3 美元，但今年收入增加了很多，或者說 3 小時工資。我們該如何考慮今年收益的派息水準或派息比率？

Yes, we certainly commit to pay at least 50% of our earnings in cash to our shareholders. And we also want to have a steady and hopefully, a high level of dividend. So I think that were the basic assumptions for cash dividend payout.

是的，我們當然承諾將至少 50% 的利潤以現金支付給股東。我們也希望獲得穩定且有望高水準的股息。所以我認為這是現金股利支付的基本假設。

Okay. And the final question I have is just 2 parts. I just wanted to clarify the push out was tool related. We only have about 12,000 end of year. Is that push out any bit demand related or it's completely a tool push out?

好的。我的最後一個問題只有兩個部分。我只是想澄清一下推出與工具相關。到年底我們只有大約 12,000 個。這是否與需求相關，或完全是工具推出？

And then the second part for Singapore, where you're keeping that on track. Factoring the geopolitical, are you seeing rising customer interest for the non-Taiwan side to actually move ahead with Singapore a bit more aggressively?

然後是新加坡的第二部分，在那裡你將保持在正軌上。考慮到地緣政治因素，您是否看到客戶對非台灣方面的興趣不斷增加，以更積極地推進新加坡業務？

Well, for the first question is the larger portion of that push out is because the equipment vendor delayed. And there are some social with the demand reason, but a larger portion is because they're too delayed.

好吧，對於第一個問題，很大一部分的推出是因為設備供應商延遲了。也有一些社會性的需求原因，但更大一部分是因為他們太延遲了。

The Singapore's interest, yes, they are interesting in Singapore various customers. They are a benefit to it in addition to the geographic, the regional risk because there are other factors in play. So I won't say that's 100% because of the geographical reason -- geopolitical reasons, but we definitely see some of the interest rise, yes.

新加坡的興趣，是的，他們對新加坡的各種客戶很感興趣。除了地理、區域風險之外，它們也是一個好處，因為還有其他因素在起作用。所以我不會說這是 100% 因為地理原因——地緣政治原因，但我們肯定會看到一些利息上升，是的。

And that capacity is 2025 is when we'd see that capacity?

這個容量是 2025 年，我們什麼時候才能看到這個容量？

Yes, late 2024, but mostly because of the 2 delays now, it's about early 2025.

是的，2024 年底，但主要是因為現在有 2 次延誤，大約是 2025 年初。

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

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。我會將事情轉交給 UMC IR 主管進行總結發言。

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.

謝謝大家參加今天的這個會議。我們感謝您的提問。與往常一樣，如果您有任何其他後續問題，請隨時透過 ir@umc.com 聯絡 UMC。祝你有美好的一天。

Thank you. And ladies and gentlemen, that concludes our conference for third quarter 2022. Thank you for your participation in UMC's conference. There will be a webcast replay within 2 hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Goodbye.

謝謝。女士們、先生們，2022 年第三季的會議到此結束。 2小時內將進行網路直播重播。請造訪 www.umc.com 的「投資者活動」部分。您現在可以斷開連線。再見。