聯華電子 (UMC) 2024 Q1 法說會逐字稿

Welcome, everyone to UMC's 2024 First 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 two hours after the conference is finished. Please visit our website, www.umc.com, under the Investor Relations, Investors, Events section.

歡迎大家參加聯華電子 2024 年第一季財報電話會議。 （操作員說明）僅供參考，本次電話會議現透過網路進行現場直播。會議結束後兩小時內將提供網路直播重播。請造訪我們的網站 www.umc.com，位於「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 first quarter of 2024. I am joined by Mr. Jason Wang, President of UMC; and Mr. Chi-Tung Liu, CFO of UMC. In a moment, we will hear our CFO present the first quarter financial results, followed by our President's key message to address UMC's focus and second quarter 2024 guidance. Once our President and 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.

謝謝大家，歡迎參加聯電 2024 年第一季電話會議。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一季的財務業績，然後是我們的總裁關於解決 UMC 的重點和 2024 年第二季指導的關鍵訊息。一旦我們的總裁和財務長完成發言，就會有問答環節。 UMC 的季度財務報告可在我們的網站 www.umc.com 的「投資者財務」部分取得。

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 risk that may be beyond the company's control. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filing 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.

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描述，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，您可以觀看我們正在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 first quarter 2024 financial results.

現在我想介紹聯電財務長劉志東先生，討論聯華電子2024年第一季的財務表現。

Thank you, Michael. I would like to go through the first quarter '24 investor conference presentation material, which can be downloaded or viewed in real-time from our website.

謝謝你，麥可。我想瀏覽一下 24 年第一季投資者會議簡報資料，這些資料可以從我們的網站下載或即時查看。

Starting on Page 4, the first quarter of 2024, consolidated revenue was TWD 54.63 billion with gross margin at 30.9%. The net income attributable to the stockholder of the parent was TWD 10.46 billion and the earnings per ordinary shares were TWD 0.84. Utilization rate in first quarter of '24 was 65% similar to 66% in Q4 of last year, however, the shipment has increased by about 4.5% sequentially.

從第4頁開始，2024年第一季，合併收入為新台幣546.3億元，毛利率為30.9%。歸屬於母公司股東的淨利為新台幣104.6億元，每股普通股收益為新台幣0.84。 2024 年第一季的利用率為 65%，與去年第四季的 66% 相似，但出貨量較上季成長了約 4.5%。

On Page 5, for the sequential financial comparison, revenue declined slightly to 54.6% -- sorry, TWD 54.6 billion. Gross margin was down 5.1% to 30.9 percentage points or TWD 16.899 billion. The operating expenses normally in first quarter is a seasonal low point. Therefore, we can see the operating expenses was down 13.4% to TWD 5.7 billion in Q1 '24. And our other operating income mainly is subsidies from government declined quite a bit to TWD 513 million in Q1. This is largely coming from our Xiamen operation. Their government subsidies recognition is in line with the depreciation curve, which has come down significantly in 2024. And overall, net income attributable to the shareholder of the parent was TWD 10.4 billion in Q1 versus TWD 13.1 billion in Q4 of last year. EPS was TWD 0.84 for first quarter.

在第 5 頁，對於連續財務比較，收入略有下降至 54.6%——抱歉，為 546 億新台幣。毛利率下降 5.1%，至 30.9 個百分點，即新台幣 168.99 億元。第一季的營運費用通常是季節性低點。因此，我們可以看到 24 年第一季的營運費用下降了 13.4% 至 57 億新台幣。我們的其他營業收入主要是來自政府的補貼，第一季大幅下降至新台幣 5.13 億。這主要來自我們的廈門業務。他們的政府補貼確認與折舊曲線一致，折舊曲線在 2024 年大幅下降。第一季 EPS 為新台幣 0.84。

On Page 6, the year-over-year comparison, revenue also stayed similar range, almost a slight increase of 0.8%. And gross margin, however, declined from 35.5 percentage point to 30.9 percentage point in Q1, mainly due to increase in costs such as depreciation expenses. And for the non-operating income is also a big difference mainly due to our portfolio holdings, investment holdings. This is the mark-to-market gain, it's only about TWD 10 billion -- sorry, TWD 1 billion in Q1 versus TWD 4.6 billion in the same period of last year.

在第6頁，與去年同期相比，營收也維持了類似的範圍，幾乎小幅成長了0.8%。然而，毛利率從第一季的35.5個百分點下降至30.9個百分點，主要是因為折舊費用等成本增加。而對於營業外收入來說也有很大的差異主要是由於我們的投資組合持有、投資持有。這是按市值計算的收益，大約只有 100 億新台幣——抱歉，第一季是 10 億新台幣，而去年同期是 46 億新台幣。

On Page 7, our cash is now about TWD 119 billion, and our total equity is TWD 378 billion. Most of the increases in PP&E, property, plant and equipment, which right now stand at TWD 254 billion.

在第七頁，我們的現金約為新台幣1190億，我們的總股本為新台幣3780億。大部分增量來自不動產、廠房和設備，目前為 2,540 億新台幣。

On Page 8, there's a onetime annual adjustment in our ASP in Q1 of 2024, which was also the main reason offset the 4% to 5% increase in wafer shipment in Q1. So the magnitude is quite similar to that in the first quarter ASP.

在第8頁，我們在2024年第一季對平均售價進行了年度調整，這也是抵銷第一季晶圓出貨量4%至5%成長的主要原因。因此，其幅度與第一季平均售價非常相似。

On Page 9, the original breakdown of our revenue stayed relatively similar quarter-over-quarter. Europe declined 3% from 11% in Q4 last year to 8% in the first quarter of this year.

在第 9 頁，我們最初的收入細目與上一季相比保持相對相似。歐洲下降了3%，從去年第四季的11%下降到今年第一季的8%。

On next page, Page 10, there is also a big change in the IDM composition versus fabless revenue. So this quarter is 18% versus 82%, while last quarter was 22% versus 78%. On Page 11, the application breakdown remained relatively stable.

在下一頁，即第 10 頁，IDM 組成與無晶圓廠收入相比也發生了巨大變化。所以本季是 18% 對 82%，而上季是 22% 對 78%。第11頁的申請細分保持相對穩定。

On Page 12, we see a seasonal downward adjustment in some of our customers, which lead to a small decrease in our 22/28 revenue percentage point of 33%. And the rest of the technology geometries are relatively stable.

在第 12 頁，我們看到一些客戶進行了季節性下調，這導致我們的 22/28 收入小幅下降了 33%。其餘的技術幾何形狀相對穩定。

On Page 13, our capacity breakdown in 12-inch equivalent capacity, most of the increase is coming from 12A in our Tainan fab, which is our P6 expansion, and there will be some spotty areas of efficiency improvement for some of our other fabs. Total 12-inch equivalent capacity is TWD 1.2 million in Q1 this year. Our CapEx after first quarter remain unchanged, still stay around TWD 3.3 billion cash-based CapEx for 2024. Majority of that will be attributable to 12-inch capacity expansion.

第13頁，我們的產能細分為12吋等效產能，大部分增量來自我們台南廠的12A，這是我們的P6擴建，我們其他一些廠的效率提升也會有一些不穩定的地方。今年第一季12吋等效產能總計120萬新台幣。第一季後的資本支出保持不變，2024 年現金資本支出仍維持在 33 億新台幣左右。

So the above is a summary of UMC results for Q1 2024. More details are available in the report, which has been posted on our website. I will now turn the call over to President of UMC, Mr. Jason Wang.

以上是聯華電子 2024 年第一季業績的摘要。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 first quarter results.

謝謝你，志東。各位晚上好。在這裡，我想分享一下聯華電子第一季的業績。

In the first quarter, our wafer shipments increased to 4.5% quarter-over-quarter as we saw a pickup in the computer segment. Despite a slight drop in the utilization rate to 65%, we were able to maintain relatively healthy margins due to a continuous cost control and operational efficiency efforts. Contribution from our specialty business increased to 57% of total revenue, driven by demand for power management ICs, RFSOI chips and silicon interposers for AI servers.

第一季度，隨著電腦領域的回升，我們的晶圓出貨量較上季成長至 4.5%。儘管利用率略有下降至 65%，但由於持續的成本控制和營運效率努力，我們仍能夠維持相對健康的利潤率。受人工智慧伺服器電源管理 IC、RFSOI 晶片和矽中介層需求的推動，我們的專業業務貢獻佔總營收的 57%。

During the quarter, our teams continue to make good progress on key pipeline projects, both customized solutions for customers as well as new technology platforms to serve high-growth segments within the 5G AIoT and automotive markets. This includes embedded high-voltage, embedded nonvolatile memories, RFSOI and 3D-IC solutions. In line with our policy to provide a stable and predictable dividend to our shareholders, UMC's Board of Directors recently approved the shareholder cash distribution of approximately TWD 3 per share, which will be a higher payout ratio than the previous year. This is subject to approval by shareholders at the Annual General Meeting in May.

本季度，我們的團隊在關鍵管道專案上繼續取得良好進展，包括為客戶量身定制解決方案以及服務 5G AIoT 和汽車市場高成長細分市場的新技術平台。這包括嵌入式高壓、嵌入式非揮發性記憶體、RFSOI 和 3D-IC 解決方案。為配合向股東提供穩定且可預測股利的政策，聯華電子董事會最近批准股東現金分配，每股約新台幣3元，派息比率將高於去年。這須經股東在 5 月的年度股東大會上批准。

Looking ahead to the second quarter, we expect to see an increase in wafer shipments as the inventory situation in the computing, consumer and communications segment improves to a healthier level. As for the automotive industrial segment, demand remains mute as the pace of inventory digestion has been slower than anticipated. While we still expect some lingering impact on macro uncertainties and cost headwinds in the near term, UMC will continue to invest in technology, capacity and people to ensure UMC is ready to capture the next phase of growth driven by 5G and AI innovations.

展望第二季度，隨著計算、消費和通訊領域的庫存狀況改善至更健康的水平，我們預計晶圓出貨量將會增加。至於汽車工業領域，由於庫存消化速度慢於預期，需求依然低迷。雖然我們仍預期短期內宏觀不確定性和成本逆風會產生一些揮之不去的影響，但聯華電子將繼續投資於技術、產能和人才，以確保聯華電子做好準備，抓住5G 和人工智慧創新驅動的下一階段成長。

Now let's move on to the second quarter 2024 guidance. Our wafer shipments will increase by low single-digit percentage. ASP in U.S. dollars will remain firm. Gross margins will be approximately 30%. Capacity utilization rate will be in the mid-60% range. Our 2024 cash-based CapEx will be budgeted at USD 3.3 billion.

現在讓我們繼續討論 2024 年第二季的指引。我們的晶圓出貨量將以較低的個位數百分比成長。以美元計算的平均售價將維持堅挺。毛利率約30%。產能利用率將在60%左右。我們 2024 年以現金為基礎的資本支出預算為 33 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) First question, we'll have Randy Abrams, UBS.

（操作員說明）第一個問題，我們請瑞銀集團的蘭迪‧艾布拉姆斯 (Randy Abrams)。

The first question I wanted to ask on the 28-nanometer, where you mentioned it seasonally dipped in first quarter. Could you talk about the outlook, like if you see that recovering and how do you see the P6 as you bring up the rest of that capacity? How do you see application to build that capacity or keep it loaded?

我想問的第一個問題是關於 28 奈米的，你提到它在第一季季節性下降。您能否談談前景，例如您是否看到復甦，以及當您提出其餘容量時您如何看待 P6？您如何看待應用程式來建立該容量或保持其負載？

For Q1, the 22 and 28, we saw a decline and because we're experiencing smartphone seasonality, which lead to a lighter 28 and 28 loading. We do expect to pick up the 28-nanometer wafer shipment in Q2 2024. The 28 loading will remain at a relatively healthy level based on current projections and which is supported by product in OLED drivers, largest technologies such as ISP, Wi-Fi and SOC process applications. After the Q1 2024, we will see higher wafer shipments driven by the demand from both communication and consumer segments.

對於第一季度，22 和 28，我們看到了下降，因為我們正在經歷智慧型手機的季節性，這導致 28 和 28 的負載減少。我們確實預計2024 年第二季28 奈米晶圓出貨量將有所增加。和SOC製程應用。 2024 年第一季之後，我們將看到在通訊和消費領域的需求推動下晶圓出貨量增加。

Okay. And the blended pricing is firm overall, but you do have the mix shift coming back to 28. Could you talk about the like-for-like pricing environment if you see next few quarters negotiation? Would there be any like-for-like pressure or do you expect it would be like first quarter each year would be the time the bigger negotiation happens?

好的。混合定價總體上很穩定，但混合定價確實回到了 28。是否會有任何類似的壓力，或者您是否預計每年第一季都會發生更大的談判？

Well, I mean, that's the typical practice. And as we mentioned in January call, the ASP will remain firm after the one-off pricing refresh in Q1, and we are still expecting that. The company's pricing strategy has remained consistent, which is based on our value proposition. And at this time, we still expect the pricing will remain firm in the second half of 2024.

嗯，我的意思是，這是典型的做法。正如我們在一月份的電話會議中提到的，在第一季一次性定價更新後，平均售價將保持堅挺，我們仍然對此抱有期望。公司的定價策略保持一致，這是基於我們的價值主張。目前，我們仍預期 2024 年下半年定價將維持強勁。

However, we do believe the -- in terms of the like-to-like pricing adjustments and so on, we believe the focus should be elevating our customer's product competitiveness and to help them win more market share. So while our pricing strategy has remained consistent and align with our value proposition, but it also includes to stay competitive and resilient against the market dynamics, so then we will continue monitoring the market dynamics.

然而，我們確實相信——在同類定價調整等方面，我們認為重點應該是提高客戶的產品競爭力並幫助他們贏得更多的市場份額。因此，雖然我們的定價策略保持一致並與我們的價值主張保持一致，但它也包括保持競爭力和適應市場動態的彈性，因此我們將繼續監控市場動態。

Okay. So it sounds like broadly firm, but some -- the flexibility were needed if it's -- like if it's a competitive situation.

好的。所以這聽起來像是大體上堅定的，但有些——如果是的話，靈活性是必要的——例如如果這是一個競爭的情況。

That's correct, yes.

這是正確的，是的。

Okay. And to revisit the CapEx, I think you mentioned last quarter, majority of it was either residual for P6 or infrastructure. So lot of the equipment spend is still to come, but I think you were planning it to start up sometime around Q2 of next year. So is there a way to think about how much capacity in the first phase? And have you made that decision to bring up like a first phase, like if you have the amount or how much you might need to outlay? I would think it would be mostly in 2025.

好的。回顧一下資本支出，我想您上個季度提到過，其中大部分是 P6 或基礎設施的剩餘資本支出。大量設備支出仍有待完成，但我認為您計劃在明年第二季左右啟動。那麼有沒有辦法思考一期需要多少容量呢？您是否已決定提出第一階段的要求，例如您是否有足夠的金額或可能需要支出多少？我認為主要是在 2025 年。

Are you referring to P6 or P3?

你指的是P6還是P3？

Sorry, the Singapore. Actually, I was referring to -- because you're doing the construction of Singapore, so how much you bring up in Singapore in next year?

對不起，新加坡。事實上，我指的是──因為你正在建立新加坡，所以明年你在新加坡帶來了多少收入？

Yes so well, first of all, you're right. In last quarter, we did mention among the 2024 CapEx number, around 60% of the 2024 CapEx will be spent on the 12i P3 infrastructure and as well as some minimum tools and equivalents. So they are -- we are spending on the P3, but mainly for the infrastructure. And the -- given the current market dynamics and the customer alignment, we are projecting the 12i P3 production ramp will actually start in January 2026 now. And the P3 will ramp up with high volume starting from the second half of '26.

是的，很好，首先，你是對的。在上個季度，我們確實在 2024 年資本支出數字中提到，2024 年資本支出的約 60% 將用於 12i P3 基礎設施以及一些最低限度的工具和同等產品。所以他們是——我們在 P3 上花錢，但主要是為了基礎設施。考慮到當前的市場動態和客戶定位，我們預計 12i P3 的生產實際上將在 2026 年 1 月開始。 P3 將從 26 年下半年開始大量增加。

Okay. Does that imply like the big CapEx this year? Would you still -- it sounds like most of the equipment have been pushing to maybe some next year, some actually in 2026, so we should think -- I mean, is there a rough way to think about it because it would affect -- like depreciation has been rising, but that could maybe level it out with that push out?

好的。這是否意味著今年的資本支出會很大？你是否仍然會——聽起來大多數設備可能會在明年推出，有些實際上是在2026 年，所以我們應該思考——我的意思是，是否有一個粗略的方法來考慮它，因為它會影響——就像貶值一直在上升，但這可能會隨著推出而趨於平衡嗎？

Right. I mean, we are -- we certainly are managing that. We are projecting CapEx will peak out this year and will not impact the company cash dividend policy first. I believe that people care about that. As we have stated in the past, our CapEx strategy continue to remain disciplined and ROI driven and also along with our affordability. So that means we are managing that, but the CapEx will be peak out at this year, the 2024.

正確的。我的意思是，我們確實正在管理這一點。我們預計資本支出將在今年達到頂峰，不會先影響公司的現金股利政策。我相信人們關心這一點。正如我們過去所說，我們的資本支出策略繼續保持紀律性、投資回報率驅動以及我們的負擔能力。因此，這意味著我們正在對此進行管理，但資本支出將在今年（2024 年）達到高峰。

Yes. And I did see you have the TWD 3 dividend that you confirmed. Actually, the last question, it ties to the AI. Like a lot of the attention goes to the high-end, like the . But you did put in your remarks kind of a reminder on the -- you have the silicon interposer. But could you kind of outline where you still have opportunity, like that seems like the strongest -- still the strongest momentum driver, like where UMC can participate like [silicon interposer] or other components into AI or HPC?

是的。我確實看到你確認了新台幣3的股息。實際上，最後一個問題與人工智慧有關。就像很多注意力都集中在高端產品一樣。但你確實在評論中提醒了——你有矽中介層。但是您能否概述一下您仍然有機會的地方，就像看起來最強大的- 仍然是最強的動力驅動因素，例如UMC 可以像[矽中介層]或其他組件一樣參與人工智能或高性能計算？

I mean, we certainly would like to export more, but not yet. Well, at this point, while the recent focus of AI chip has been on the most advanced computational chips to run the AI module and the chips will require handling data transmission and power management are also equally important. And so UMC's focus is on those 2 areas, data transmission as well as the power management. Specifically, the AI server will near high-speed IO chips and memory controllers to handle the data transmission and the power management IC for every computing and memory units to optimize the power consumption.

我的意思是，我們當然希望出口更多，但目前還不是。好吧，在這一點上，雖然最近AI晶片的焦點已經放在最先進的計算晶片上來運行AI模組，而這些晶片需要處理數據傳輸和電源管理也同樣重要。因此，聯華電子的重點是這兩個領域：資料傳輸和電源管理。具體來說，AI伺服器將靠近高速IO晶片和記憶體控制器來處理資料傳輸以及每個運算和記憶體單元的電源管理IC以優化功耗。

Similarly, technology offering from 55-nanometer, 12-nanometer, specialty technology, non-volatile memory, 3D-IC and they are all well suited for the Edge AI applications such as wearables, smartphone, et cetera. So in that, our solution will offer to enable those Edge AI devices to achieve the optimal balance among comp performance, (inaudible), power efficiency, and we'll continue to work closely with the customers to bring those innovative Edge AI solution to the market.

同樣，55 奈米、12 奈米、特殊技術、非揮發性記憶體、3D-IC 等技術都非常適合邊緣人工智慧應用，例如穿戴式裝置、智慧型手機等。因此，我們的解決方案將使這些邊緣人工智慧設備能夠在效能、（聽不清楚）、能源效率之間實現最佳平衡，並且我們將繼續與客戶密切合作，將這些創新的邊緣人工智慧解決方案引入市場。

Well, I mean, like I said at the beginning, while we are still in the early stage of [portfoliating] the Edge AI, we are recognizing the growth potential of the AI market, and we are ready to capture those emerging opportunities. And based on the -- even we are early, but based on the current projection, we are expecting UMC's addressable market within the overall AI semiconductor market will be around 10% to 20%.

嗯，我的意思是，就像我一開始所說的那樣，雖然我們仍處於邊緣人工智慧[組合]的早期階段，但我們正在認識到人工智慧市場的成長潛力，並且我們已準備好抓住這些新興機會。即使我們還處於早期階段，但根據目前的預測，我們預計聯華電子在整個人工智慧半導體市場的潛在市場將約為 10% 至 20%。

Okay. So you will capture 10% to 20% of the AI TAM with your portfolio, okay.

好的。所以你將透過你的投資組合獲得 10% 到 20% 的 AI TAM，好吧。

Randy, actually, that's more addressable.

蘭迪，實際上，這更容易解決。

Address, I should say not capture it yet. Solutions can target and then (inaudible) that makes sense. And to clarify, too, on the silicon interposer, do you plan to expand from the 6,000? I think that was the last guidance you gave, 6,000, if you would add further capacity to that?

地址，我應該說還沒有捕獲它。解決方案可以定位，然後（聽不清楚）有意義。也要澄清一下，在矽中介層上，您是否計劃從 6,000 個擴展到更多？我認為這是您給出的最後一個指導，6,000，您是否會增加更多容量？

Yes, that's the current 2.5D interposers. Let me maybe elaborate a little bit more on our 3D-IC space. In addition to the interposers, our 3D-IC offering includes the wafer-to-wafer hybrid bonding, active intervals with TSV and the 2.5D interposer with TTC. And so the interposer is the one of the offerings and which that's where the market is today. But we are cautious in monitoring the expansion of the current interposer capacity and continue to focus on the expanding on the rest of the solutions.

是的，這就是目前的 2.5D 中介層。讓我更詳細地介紹一下我們的 3D-IC 領域。除了中介層之外，我們的 3D-IC 產品還包括晶圓間混合鍵結、採用 TSV 的主動間隔以及採用 TTC 的 2.5D 中介層。因此，中介層就是其中的一種產品，這就是當今的市場。但我們對目前中介層產能的擴張持謹慎態度，並持續關注其餘解決方案的擴張。

Those solutions aim to provide a cost-effective performance efficiency alternative for semiconductor devices through a vertical stack of silicon wafers or dies, which deliver small form factors, enhance the bandwidth and lower power consumption for various applications, including the Edge AI and the data center and communications. So we are cautious about the current solution of interposer expansion, but we aim for the future expansion for the interposer with TTC and other interval with TSV and as well as the wafer-to-wafer hybrid bonding.

這些解決方案旨在透過矽晶圓或晶片的垂直堆疊為半導體裝置提供經濟高效的性能效率替代方案，從而提供小尺寸、增強頻寬並降低各種應用（包括邊緣人工智慧和資料中心）的功耗和通訊。因此，我們對目前中介層擴展的解決方案持謹慎態度，但我們的目標是未來擴展具有TTC和其他間隔的TSV中介層以及晶圓到晶圓混合鍵合。

Next one, Gokul Hariharan, JPMorgan.

下一位是摩根大通的 Gokul Hariharan。

My first question, Jason, I think last call, you had mentioned that your growth rate expectation for foundry is about high single digits and expect UMC to kind of grow at a similar pace or strive to grow at a similar pace. Is that still your expectation right now, or has anything changed given the slower automotive industrial recovery? Has anything changed on the numbers?

我的第一個問題，傑森，我想在上次電話會議中，您提到您對代工廠的增長率預期約為個位數，並期望聯華電子以類似的速度增長或努力以類似的速度成長。這仍然是您現在的期望嗎？數字有什麼變化嗎？

Gokul, yes, you remember well. And yes, let me give you a bit of an update. There are some changes. One, some area we did not change. For instance, we still project the semi industry will grow in the mid-single digits. That did not change. For the foundry, you will grow at the low-teens year-over-year and that is changed. However, majority of the 2024 growth in the foundry will be driven by the AI servers. We actually continue to monitor that. I think the biggest momentum is coming up on the AI servers. And therefore, the growth for the UMC addressable market now remain flattish for 2024. However, you're right, our intention is still to expect to outperform our addressable market, but I think the current addressable market projection for us is flattish for 2024.

戈庫爾，是的，你記得很清楚。是的，讓我向您提供一些最新情況。有一些變化。第一，有些區域我們沒有改變。例如，我們仍然預期半導體產業將以中個位數成長。這並沒有改變。對於鑄造廠來說，你的成長率將逐年下降到十幾歲，而這種情況已經改變了。然而，2024 年代工廠的大部分成長將由人工智慧伺服器驅動。我們實際上仍在繼續監控這一情況。我認為最大的動力來自人工智慧伺服器。因此，UMC 潛在市場的成長現在在 2024 年仍然持平。

Understood. That is quite clear. Second question is on some of the specialty projects that you have on RF-SOI that you called out and also the high-voltage driver ICs and OLED. Could you talk a little bit about your market presence, especially in RF-SOI, how big this is? Because it seems like you're starting to gain some market share from the current market leader on some of these platforms. So could you talk a little bit about the specialty platforms, especially RF-SOI and OLED driver IC?

明白了。這是很清楚的。第二個問題是關於您提到的 RF-SOI 以及高壓驅動 IC 和 OLED 方面的一些專業項目。您能否談談您的市場佔有率，特別是在 RF-SOI 領域，有多大？因為您似乎開始從其中一些平台上的當前市場領導者那裡獲得一些市場份額。那麼您能否談談專業平台，尤其是 RF-SOI 和 OLED 驅動器 IC？

Sure. I mean, first of all, we will continue to address all specialty technology, not just limited at RF-SOI. However, we see a good momentum from our RF-SOI market penetration. We are seeing a significant market share gain in that space. However, I don't have a specific number to share with you right now and the -- I may be able to update you next time. The -- well, for the non-volatile memory, and the -- we also gain some traction on that, while we have been maintaining our market position on the embedded high voltage.

當然。我的意思是，首先，我們將繼續解決所有專業技術，而不僅僅是限於 RF-SOI。然而，我們看到 RF-SOI 市場滲透的良好勢頭。我們看到該領域的市場份額顯著增加。不過，我現在沒有具體的數字可以與您分享，並且--我下次可能會向您更新。嗯，對於非揮發性記憶體，我們也在這方面獲得了一些關注，同時我們一直在嵌入式高壓方面保持市場地位。

Understood. One more question I had is on the -- as we are kind of moving towards spending primarily for the fab 12i P3, are there any CapEx offset that we will potentially get for the Singapore fab, or is it mostly the prepayment from customers and the government incentives are mostly on tax breaks and other kind of profit driven subsidies?

明白了。我還有一個問題是——由於我們正在轉向主要用於 12i P3 晶圓廠的支出，我們是否有可能為新加坡晶圓廠獲得任何資本支出抵消，或者主要是來自客戶的預付款和政府的激勵措施主要是稅收減免和其他類型的利潤驅動補貼？

. Maybe Gokul, if you can repeat that question again?

。也許是戈庫爾，你能再重複這個問題嗎？

Yes. So I'm asking for Singapore fab, do we get any capital offset, like CapEx offsets that offset our CapEx, or is it mostly going to be like tax breaks and other kind of subsidies, which kick in once you start production?

是的。所以我問新加坡晶圓廠，我們是否能獲得任何資本抵消，例如抵消我們資本支出的資本支出抵消，或者主要是稅收減免和其他類型的補貼，一旦開始生產就會生效？

Yes, we cannot go into detail, but there are government incentives issued by the Singapore government, including both tax breaks as well as the subsidies on capital expenditures. And the overall package is equal or better than the -- our previous investment, the P1, P2 because of the more advanced technology investment we have in Singapore. So we are very grateful for the strong support from the Singapore government. And the enlarged hub in our Singapore operation actually will enable us to receive even more benefit as of this greater economical scale.

是的，我們無法詳細說明，但新加坡政府頒布了政府激勵措施，包括稅收減免以及資本支出補貼。整體方案等於或優於我們先前的投資 P1、P2，因為我們在新加坡擁有更先進的技術投資。所以我們非常感謝新加坡政府的大力支持。新加坡業務的擴大樞紐實際上將使我們能夠透過更大的經濟規模獲得更多利益。

So the TWD 5 billion spend that we had projected earlier that is more like a gross CapEx number, we should assume?

那麼我們先前預測的 50 億新台幣支出更像是資本支出總額，我們應該假設嗎？

Yes, roughly for P3, roughly.

是的，大概是P3，大概是。

Okay, understood. And one more question I had is on 8-inch, given 8-inch seems to be still pretty sluggish. Are there any plans on flexibility for the 8-inch capacity? Is there any plans to potentially convert 8-inch to other areas, the compound semiconductors, silicon carbide or any of those areas?

好的，明白了。我還有一個問題是關於 8 英寸的，因為 8 英寸似乎仍然相當遲緩。 8寸產能有彈性化的計畫嗎？是否有計劃將 8 英寸轉移到其他領域，化合物半導體、碳化矽或任何這些領域？

Well, first of all, we are continuing to anticipate pressures from the -- some of the 12-inch mature node fab that has impacted 8-inch supply chain. So we definitely need to address that. While certainly the main string application will remain an 8-inch node, we also try to expanding the technology offering to silicon carbide, gallium nitride, but they're still in a very early stage. Most of the silicon carbide today is at a 6-inch, and we are more focused on an 8-inch migration, and we can update more progress once that becomes mature.

嗯，首先，我們繼續預期來自一些 12 吋成熟節點晶圓廠的壓力，這些壓力已經影響了 8 吋供應鏈。所以我們絕對需要解決這個問題。雖然主要的串應用肯定仍將是 8 英寸節點，但我們也嘗試將技術擴展到碳化矽、氮化鎵，但它們仍處於非常早期的階段。現在碳化矽大部分是在6英寸，我們更專注於8英寸的遷移，一旦成熟我們可以更新更多進展。

Next one, Brad Lin, Bank of America.

下一位是美國銀行的 Brad Lin。

I have 2 questions. One is on the silicon interposer or the advanced packaging. We have learned that the management is cautious or less active in expanding this part of the capacity. So we are on track to hit around 6k per month and no further expansion, should we assume that? And then a follow-up on that is that, we know that we are expanding the other wafer-to-wafer technology and other 3D solutions. So when should we expect this product business to well take off?

我有 2 個問題。一種是在矽中介層或先進封裝上。我們了解到，管理階層對於擴大這部分產能持謹慎或較不正面的態度。因此，我們有望達到每月 6,000 左右，並且不會進一步擴張，我們應該這樣假設嗎？接下來，我們知道我們正在擴展其他晶圓到晶圓技術和其他 3D 解決方案。那我們應該預期這個產品業務什麼時候能夠起飛呢？

So first question is the interval. So yes, we will maintain that 6k capacity and we continue seeing that we had a stable run rate with -- for 2024. And for the others, some of the RF-SOI applications already starting to use the wafer-to-wafer hybrid bonding solution. So they will be ready for production in 2024 as well. And so the -- we gradually introduced some of the advanced die-to-die and wafer-to-wafer stacking solutions and gradually increase that capacity as well.

所以第一個問題是間隔。所以，是的，我們將保持 6k 產能，並且我們將繼續看到我們在 2024 年擁有穩定的運行率。因此，它們也將在 2024 年做好投產準備。因此，我們逐漸引入了一些先進的晶片到晶片和晶圓到晶圓堆疊解決方案，並逐漸提高了產能。

Got it. Glad to hear that. And then my second question will be on the -- well, our node migration. We have learned a good business on the 22 and 28 nanometer with the OLED driver IC and some products migrating to 22 and 28 from 40. And we would like to learn the outlook of 40 and the well utilization outlook and what products can we expect to help fill the 40-nanometer capacity gap?

知道了。很高興聽你這樣說。然後我的第二個問題將是關於我們的節點遷移。我們已經了解了 22 和 28 奈米 OLED 驅動 IC 的良好業務，以及一些產品從 40 奈米遷移到 22 和 28 奈米。奈米產能缺口？

So you're talking about 40 or 14?

所以你說的是40還是14？

40, four-zero.

40、四零。

For the mature 12-inch, the utilization rate for both 40 and 65 will remain flattish for the second half of 2024. And of course, this still highly depends on the pace of the overall market recovery, and we closely monitor that. At the same time, there are applications still coming into the 40-nanometers such as the RFSOI and as well the non-volatile memory. They are some of the new application will come in adopting the 40-nanometers.

對於成熟的12吋來說，2024年下半年40吋和65吋的利用率將保持持平。同時，還有一些應用仍在進入 40 奈米，例如 RFSOI 和非揮發性記憶體。他們的一些新應用將採用40奈米。

Got it. Actually, I also wanted to ask about 14, one-four. So despite a limited capacity currently, there is still emerging business opportunities in the market. Does the firm plan to allocate more resources for the expansion on this 14?

知道了。其實我也想問14，一比四。因此，儘管目前產能有限，但市場上仍存在新興商機。公司是否計劃分配更多資源用於這14年的擴張？

Our current focus on the FinFET is on the 12-nanometer cooperation with the U.S. partners, which the program has kicked off at the beginning of this year. And the focus is try to -- making good progress on the co-development and which is on track. And the -- and we're also seeing a high level of interest, and we see numerous increase. At this moment, we are working with our customers to accelerate the ramp schedule for the 12-nanometers. So yes, I mean, the focus will be shifting to the 12-nanometer instead of 14.

我們目前FinFET的重點是與美國合作夥伴的12奈米合作，該計畫已於今年年初啟動。重點是努力在共同開發方面取得良好進展，並且進展順利。我們也看到了很高的興趣，而且我們看到了大量的成長。目前，我們正在與客戶合作，加快 12 奈米製程的量產進度。所以，是的，我的意思是，焦點將轉移到 12 奈米而不是 14 奈米。

Next one, Bruce Lu, Goldman Sachs.

下一位是陸小龍，高盛。

I want to ask about the -- Jason, your view about the high (inaudible). If you look at your guidance, you're guiding for a flat to slight up for the total revenue, which is a sequential growth for your quarter revenues like, most like, it's flattish or slightly down every quarter for the next coming quarters. And your margin is somehow flat for 30% if there is no more ASP erosion. So which is -- there is no recovery at all for the industry. So it seems to me that this inventory (inaudible) cycle is a lot longer than expected. So when do you see the inventory correction will -- the restocking will start to kick in and provide some minimal health for your business.

我想問一下──傑森，你對高感的看法（聽不清楚）。如果你看一下你的指導，你會發現總收入持平或略有上升，這是你的季度收入的連續增長，就像接下來的幾個季度每個季度持平或略有下降一樣。如果沒有更多的 ASP 侵蝕，你的利潤率在某種程度上持平於 30%。也就是說，該產業根本沒有復甦。所以在我看來，這個庫存（聽不清楚）週期比預期長很多。因此，您何時會看到庫存調整——補貨將開始啟動，並為您的業務提供一些最低限度的健康。

I mean, Bruce, the first off, let's talk about inventory. We have noticed the overall industry inventory level are continuing to improve. Specifically, we have seen inventory getting to a healthy level in the computing, consumer and communication market centers. However, we still observe our customers taking more of a conservative approach in their inventory restocking behavior. In other words, we've seen more of a rush order instead, the confident projection going forward. I think that mainly because the biggest uncertainty is still at overall macro outlook, which could impact the market dynamics.

我的意思是，布魯斯，首先我們來談談庫存。我們注意到整個產業的庫存水準正在持續改善。具體來說，我們看到計算、消費和通訊市場中心的庫存已達到健康水準。然而，我們仍然觀察到我們的客戶在庫存補貨行為中採取了更保守的做法。換句話說，我們看到更多的是緊急訂單，而是對未來的自信預測。我認為這主要是因為最大的不確定性仍然是整體宏觀前景，這可能會影響市場動態。

The other 2 market segments for the inventory digestion for the auto industrial segment is still slower, like I mentioned earlier. So I think the market is prudent. The customer are prudent about the market outlook. We do see the overall industry are recovering. And so we do think the foundry industry will grow in the low-teens percentage year-over-year. However, most of the resources is more allocated to the AI server. So I think the AI server will be the -- with more of a higher growth rate versus the rest of the market applications. So -- and since we have less exposure at the AI server, so I think our projection at this point is more conservative. However, we are optimistic about the inventory, the situation.

汽車工業領域的另外兩個細分市場的庫存消化速度仍然較慢，就像我前面提到的。所以我認為市場是謹慎的。客戶對市場前景持謹慎態度。我們確實看到整個行業正在復甦。因此，我們確實認為鑄造行業的同比增長率將達到十幾%。然而，大部分資源更多地分配給了AI伺服器。因此，我認為人工智慧伺服器將比其他市場應用程式具有更高的成長率。因此，由於我們在人工智慧伺服器上的曝光度較低，所以我認為我們目前的預測更為保守。不過，我們對庫存狀況持樂觀態度。

So if the AI continues to be strong for next year, you will continue to [renew it], is that the base assumption?

因此，如果人工智慧明年繼續強勁，您將繼續[更新它]，這是基本假設嗎？

I mean -- well, the other things, we do foresee the auto and industrial segment, inventory health -- inventory situation will become more healthier by end of the year. So I think all market segments within UMC addressable will become much healthier in terms of their inventory situation starting from '25.

我的意思是 - 嗯，其他事情，我們確實預見到汽車和工業領域的庫存健康狀況 - 到今年年底庫存狀況將變得更加健康。因此，我認為從 25 年開始，UMC 內的所有細分市場的庫存狀況都將變得更加健康。

I see. Okay, the next question is for the (inaudible) 3D-IC packaging, which Jason started to talk a bit more. I want to know the value proposition for UMC in this business because you don't have the (inaudible), you don't have 3 or 5 nanometers. So which is somehow vertical integration is important, so where do you see your value when you don't have the advanced node dies for the packaging? And what's the profitability look like for this business, it's going to be the margin accretive for you?

我懂了。好的，下一個問題是關於（聽不清楚）3D-IC 封裝，Jason 開始對此進行了更多的討論。我想知道 UMC 在這個行業的價值主張，因為你沒有（聽不清楚），你沒有 3 或 5 奈米。因此，垂直整合在某種程度上很重要，那麼當您沒有用於封裝的先進節點晶片時，您在哪裡看到自己的價值？這項業務的獲利能力如何，它會為您帶來利潤成長嗎？

Well, I mean, first of all, I mean, you're right. But if we look at this market specifically, the -- some device is looking from a form factor standpoint and some devices looking from the enhanced bandwidth standpoint and lower power consumption. So if you have a horizontal view, I think from the small form factor standpoint, some of the applications do not require most advanced technology nodes.

嗯，我的意思是，首先，我的意思是，你是對的。但如果我們具體觀察這個市場，一些設備會從外形尺寸的角度來看，而另一些設備會從增強的頻寬和更低的功耗的角度來看。因此，如果你有一個橫向視圖，我認為從小外形尺寸的角度來看，某些應用程式不需要最先進的技術節點。

And some of the applications will probably need a little better but not -- still not the most advanced, because they're seeking for the balance between the form factor and the higher bandwidth and the power consumption. But if you directly referring to the very super high bandwidth and which -- that's a space that we are not addressing. So there's still a sizable market within the stacking, the 3D-IC space for us.

某些應用程式可能需要更好一點，但仍然不是最先進的，因為它們正在尋求外形尺寸與更高頻寬和功耗之間的平衡。但如果你直接指的是超高頻寬，那就是我們沒有涉及的空間。因此，堆疊領域仍有相當大的市場，即 3D-IC 領域。

So that is what you mentioned about like 15% to 20% of the addressable market.

這就是您提到的 15% 到 20% 的目標市場。

That's among the --

這是其中——

The total.

總數。

Yes, the overall AI semiconductor market, yes. And that's part of --

是的，整個人工智慧半導體市場，是的。這是——

Understood. And the profitability? Profitability for this business?

明白了。以及獲利能力？該業務的獲利能力？

I mean we're very cautious about that, and we've been running the company, improved our structural probability for a few years already. And of course, the -- any solution we're offering and operational efficiency was always part of the consideration. So that will be a profitable operation for us, yes.

我的意思是，我們對此非常謹慎，而且我們已經運營公司幾年了，已經提高了我們的結構機率。當然，我們提供的任何解決方案和營運效率始終是考慮因素的一部分。所以這對我們來說將是一項有利可圖的業務，是的。

So we can consider as a margin accretive for this business?

那我們可以考慮增加這項業務的利潤嗎？

I mean -- right now, I can't comment margin accretive, we'll try our best to maintain our structural profitability, yes.

我的意思是——現在，我無法評論利潤增長，我們將盡力保持我們的結構性盈利能力，是的。

Next on Charlie Chan, Morgan Stanley.

接下來是摩根士丹利的陳查理。

So first of all, Jason, great calls on the cycle and the market forecast. I think your (inaudible) is converging to your kind of forecast on the (inaudible) market. And also excellent job on the pricing discipline, so well done on the margin side. So a couple of questions from my side. So first of all, the CapEx, right, does that include some spending for the U.S. partner fab? Because you kind of mentioned that there could be some debottlenecking required for the U.S. operation.

首先，傑森，對週期和市場預測的重要呼籲。我認為您的（聽不清楚）正在與您對（聽不清楚）市場的預測趨同。在定價方面也表現出色，在利潤方面也做得很好。我這邊有幾個問題。首先，資本支出，對吧，這是否包括美國合作夥伴晶圓廠的一些支出？因為你提到美國業務可能需要消除一些瓶頸。

I mean not for the 2024 number, that's not a whole lot. So that will not change the current CapEx projection. The -- when we say we peak out in 2024 in terms of CapEx and the 2025 will start declining, that's already including that assumption, yes.

我的意思不是 2024 年的數字，這並不是很多。因此，這不會改變目前的資本支出預測。當我們說我們的資本支出將在 2024 年達到頂峰並且 2025 年將開始下降時，這已經包括了這一假設，是的。

Okay. So any CapEx for that debottlenecking should be more 2025?

好的。那麼，用於消除瓶頸的資本支出應該在 2025 年以上嗎？

Well, yes, most of them will happen there, yes.

嗯，是的，大多數都會發生在那裡，是的。

Okay. Yes, and also staying on this 12-nanometer business, right, you said the -- you try to accelerate customer schedule. Do you think any kind of production can be ahead of 2027?

好的。是的，而且還要繼續從事 12 奈米業務，對吧，你說過——你試圖加快客戶進度。您認為任何類型的生產都可以提前到 2027 年嗎？

We certainly hope so. But cooperation like this scale naturally come with various kind of challenges so we have gone through a rigorous due diligence since day 1, and we have been proactively managing those potential challenges. So, so far, the collaboration has been a positive for us. And so we want to focus on to accelerate that, but I can't give you any specifics at this point, but I think we are -- I think I can tell you the project is on track, and we have a good confidence that we're making good progress right now.

我們當然希望如此。但如此規模的合作自然會帶來各種挑戰，因此我們從第一天起就進行了嚴格的盡職調查，並積極應對這些潛在的挑戰。因此，到目前為止，合作對我們來說是積極的。因此，我們希望集中精力加快這一進程，但目前我無法向您提供任何具體細節，但我認為我們 - 我想我可以告訴您該項目正在步入正軌，我們有充分的信心我們現在正在取得良好進展。

Got you. So in terms of the customer's feedback or demand compared to maybe 3 months ago or 6 months ago, do you see more commitment from your customers or partners? So I remember the Intel fab capacity is 50k to 60K, right? Are you confident that you can fill that capacity?

明白你了。那麼，就客戶的回饋或需求而言，與 3 個月前或 6 個月前相比，您是否看到客戶或合作夥伴做出了更多承諾？我記得Intel的晶圓廠產能是50k到60K，對吧？您有信心能夠填補這一空缺嗎？

I mean we never talked -- we never specifically talked about capacity size. In terms of the capacity arrangement, it's very typical we have to work with our customers and align with them based on their forecasts and then we can deploy that. So there's no specific capacity number at this point. The -- secondly, we are seeing more interest because we announced this early this year, obviously, that customers want to know more about it. And so we see a lot of interest and I think we're making some or good traction. But first thing first, we have to demonstrate that ourselves. So all hands on deck is we just focus on execution today. And given the project execution standpoint, we don't foresee any major risks now, yes.

我的意思是我們從未討論過——我們從未具體討論過容量大小。就容量安排而言，我們通常必須與客戶合作並根據他們的預測與他們保持一致，然後我們才能部署。所以目前還沒有具體的容量數字。其次，我們看到了更多的興趣，因為我們在今年早些時候宣布了這一點，顯然，客戶希望更多地了解它。因此，我們看到了很多興趣，我認為我們正在取得一些或良好的吸引力。但首先，我們必須自己證明這一點。因此，今天我們只專注於執行。考慮到專案執行的角度，我們現在預計不會有任何重大風險，是的。

Okay. Yes, so I heard that your progress also get on nerve of your industry peer. For example, at least a key customer, Novatek, right? I'm not sure whether there's some dynamic that you exceed Novatek both because of Novatek in the future, probably they won't depend on TSMC and TSMC also want to bundle with this customers tighter. So I'm not sure if there's already some counter move from your major competitor in 12-nanometer.

好的。是的，所以我聽說你的進步也讓你的同行感到不安。例如，至少有一個關鍵客戶諾瓦泰克（Novatek），對嗎？我不確定是否有一些動力超過聯詠科技，因為未來聯詠科技可能不會依賴台積電，台積電也想與這個客戶捆綁得更緊。所以我不確定你們的主要競爭對手是否已經在 12 奈米領域採取了一些反擊行動。

I mean first of all, we do not comment on any specific customer, we never do. And from the competition standpoint, we will look at this in a way of building a strong relationship with our customers. It can only forge upon a fundamental strength in technology leadership, manufacturing, capability, excellence, and on the capacity offering. And so you have to win back that. You don't win by relationship. Having a good relationship is always good, but that's not we focus on. And the -- we will continue to strengthen our competitive advantage in supporting our customers and winning their business and building that relationship.

我的意思是，首先，我們不會對任何特定客戶發表評論，我們從來不會這樣做。從競爭的角度來看，我們將從與客戶建立牢固關係的角度來看待這個問題。它只能在技術領先、製造、能力、卓越和能力提供方面建立基礎實力。所以你必須贏回這一點。你不能靠關係取勝。擁有良好的關係總是好的，但這不是我們關注的重點。我們將繼續加強我們的競爭優勢，支持我們的客戶、贏得他們的業務並建立這種關係。

Got you. So wish you success. So may I switch gears to some near-term or financial questions?

明白你了。所以祝你成功。那麼我可以轉向一些近期或財務問題嗎？

Sure, absolutely, yes.

當然，絕對，是的。

So Chi-Tung, on the gross margin side, I'm wondering how you model the kind of electricity cost impact to your gross margin? And also, is it -- depreciation still growing like 20% year-on-year for 2024?

Chi-Tung，在毛利率方面，我想知道你如何模擬電力成本對毛利率的影響？而且，到 2024 年，折舊率仍將年增 20% 左右嗎？

Yes, depreciation should grow around 20% or a little bit less, maybe given the current new schedule for Singapore P3. And the utility impact is actually after the -- all the costs together blended together, is actually rather minimal. And our goal is always try to offset that through our operating efficiencies and also the benefit from the larger economy of scale. So the third forecast is a small impact to our operating, gross -- to our gross margin.

是的，考慮到新加坡 P3 目前的新時間表，折舊率應該會增加 20% 左右或稍低。而公用事業的影響實際上是在所有成本混合在一起之後，實際上是相當小的。我們的目標始終是嘗試透過提高營運效率以及更大規模經濟的收益來抵消這種影響。因此，第三個預測對我們的營運、毛利率影響很小。

Okay. So it sounds like you don't intend to pass through this kind of minimal additional cost to your customers. Do I interpret this comment, right?

好的。因此，聽起來您並不打算將這種最小的額外成本轉嫁給您的客戶。我可以解釋這個評論嗎？

I mean, the cost and the pricing is -- to us is actually a 2 different thing. The -- from an ASP standpoint, I mean, we -- our pricing strategy is, like I said, is consistent based on our value proposition. And then we -- and we have to align with that, that includes the competitive resilience, right? But the cost, we always want to try the aggressive cost reduction efforts to compensate or offset some of the headwinds and to maintain structural probability. So we -- it's not a cost-plus business model for us.

我的意思是，成本和定價對我們來說實際上是兩件不同的事情。從 ASP 的角度來看，我的意思是，我們的定價策略，正如我所說，基於我們的價值主張是一致的。然後我們——我們必須與之保持一致，其中包括競爭彈性，對嗎？但在成本方面，我們總是希望嘗試積極降低成本，以補償或抵消一些不利因素並保持結構性機率。所以我們——這對我們來說不是一種成本加成的商業模式。

I see. So in the Q&A with Bruce, I seem to hear you kind of admit that the second half margin can be also at a similar level. Did I hear you right?

我懂了。所以在與布魯斯的問答中，我似乎聽到你承認下半場的利潤率也可以達到類似的水平。我沒聽錯吧？

I mean we're typically giving guidance quarter-over-quarter, but at this point, we more look at the market outlook and the ASP projection will stay firm. But we do withstand the headwinds, like you said, the 2D cost increased, inflationary cost increase, depreciation cost increase, and so there are some headwinds that we have to deal with. So we will continue aggressively spend effort to improve our cost structure. But -- and so the goal will be, at least, that's continue improve our structural profitability from that standpoint.

我的意思是，我們通常會按季度提供指導，但此時，我們更關注市場前景，平均售價預測將保持堅挺。但我們確實頂住了逆風，就像你說的，二維成本增加，通貨膨脹成本增加，折舊成本增加，所以我們必須應付一些逆風。因此，我們將繼續積極投入努力來改善我們的成本結構。但是，因此，從這個角度來看，目標至少是繼續提高我們的結構性獲利能力。

I mean, I have to say, currently, we have been navigating the industry dynamics, even with the utilization rate below 70%, right? I mean -- so I think we have demonstrated that for the past period. And now we're dealing with the headwinds in depreciation of all those inflationary cost pressure, and I think we'll continue to do so. And so despite those challenges, we will have a relentless effort to over those challenges, yes.

我的意思是，我必須說，目前我們一直在把握產業動態，即使利用率低於70%，對嗎？我的意思是——所以我認為我們在過去一段時間已經證明了這一點。現在我們正在應對所有這些通膨成本壓力帶來的貶值阻力，我認為我們將繼續這樣做。因此，儘管存在這些挑戰，我們仍將不懈努力克服這些挑戰，是的。

I see. The last one from me, so on the end market trends, one observation. So I fully respect and you have been right about the cycle recovery, the market forecast, right? But recently, we seem to hear that smartphone supply chain continue to see all the cuts. One of your major customers will report this Friday, I guess. So we are seeing inventory destocking, right? Some tough situation for China smartphone still. You seem to say that inventories are healthy. So can I know how you're going to reconcile those data points?

我懂了。最後一篇來自我，關於終端市場趨勢的一個觀察。所以我完全尊重你對週期復甦和市場預測的看法，對嗎？但最近，我們似乎聽說智慧型手機供應鏈持續出現大幅削減。我猜，你們的一位主要客戶將在本週五報告。所以我們看到庫存去庫存，對嗎？中國智慧型手機的處境仍然嚴峻。您似乎說庫存狀況良好。那麼我能知道您將如何協調這些數據點嗎？

In the -- I mean, I kind of touched that. So first, we are cautiously optimistic about the rest of the year. If I put it this way, at this moment, we foresee the Q1 2024 could be the button. And the biggest uncertainty is the overall macro outlook that could impact end market dynamics. So because the visibility -- insufficient visibility at this point, given the customer's practice -- rush order practice approach.

我的意思是，我有點觸及了這一點。首先，我們對今年剩餘時間持謹慎樂觀態度。如果我這樣說，那麼此時此刻，我們預計 2024 年第一季可能就是按鈕。最大的不確定性是可能影響終端市場動態的整體宏觀前景。因此，由於可見性——此時可見度不足，考慮到客戶的做法——緊急訂單實踐方法。

So we feel optimistic about it, but we need to be cautious about it. If the end market does not recover as we expected, we could have a challenging second half. But however, at this point, we have not seen that. So we really hope that if the market continues digesting the inventory, gradually improving -- the end market demand gradually improving, we actually foresee the Q1 '24 will be a [baton] for the year.

所以我們對此感到樂觀，但也需要謹慎。如果終端市場沒有像我們預期的那樣復甦，我們的下半年可能會充滿挑戰。但目前我們還沒有看到這一點。因此，我們確實希望，如果市場繼續消化庫存，逐步改善——終端市場需求逐步改善，我們實際上預計 24 年第一季將成為今年的[接力棒]。

Awesome execution on the pricing discipline and also the 12-nanometer strategy.

在定價規則和 12 奈米策略方面執行得非常出色。

Next one, Jason Tsang, CLSA.

下一位是 Jason Tsang，里昂證券。

Wonder if you can give us more details in terms of demand in second half. I mean, can you give us outlook or more details for 28-nanometers or (inaudible) nanometers or 8-inch.

不知能否介紹一下下半年的需求狀況。我的意思是，您能給我們 28 奈米或（聽不清楚）奈米或 8 英寸的前景或更多細節嗎？

Well, I mean, let's talk about the Q2 since we are in the current quarter. And the Q2 outlook and we look at the applications, we expect the wafer demand in consumer and computing segment will grow while the automotive industrial segment will remain soft as they still digesting the inventory. So they're still in the mixed bag for the Q2, but overall shipment, I think, will be -- we'll grow quarter-over-quarter sequentially. The -- if you break it down to a technology node, the 28 and 22 will gradually improve. And for the mature nodes, the 12-inch, 40-inch and 65-inch will stay flattish, while the 8-inch will stay flattish as well. And so that will be the current projection for us.

好吧，我的意思是，讓我們談談第二季度，因為我們正處於本季度。展望第二季度，我們著眼於應用，我們預期消費和運算領域的晶圓需求將會成長，而汽車工業領域將保持疲軟，因為它們仍在消化庫存。因此，第二季的情況仍然好壞參半，但我認為，整體出貨量將會逐季成長。如果將其分解為技術節點，28 和 22 將會逐漸改進。而對於成熟節點來說，12吋、40吋、65吋會保持扁平化，8吋也會保持扁平化。這就是我們目前的預測。

Okay, thank you. So can we expect that there will be a normal seasonality demand in Q3? And how can we expect -- whether your utilization rate can reach maybe around 70% in this transitional half season? Can we expect that kind of seasonality or demand in Q3?

好的謝謝。那麼我們是否可以預期第三季會有正常的季節性需求呢？那麼，在這個過渡的半季裡，你們的利用率能否達到70%左右呢？我們可以預期第三季會出現這種季節性或需求嗎？

Well, I mean the -- it's -- at this time, the market is still lack of a sufficient visibility like I said, for the second half. I try to give you an example that we have observed rush order from customers as they continue to managing their business prudently. And for auto and industrial, they have a slower inventory digestion. So we think that by end of the year, I think auto and the industrial will be at a much healthier position.

嗯，我的意思是，目前，正如我所說，下半年市場仍然缺乏足夠的能見度。我試著給你一個例子，我們觀察到客戶的緊急訂單，因為他們繼續謹慎地管理他們的業務。對於汽車和工業來說，它們的庫存消化速度較慢。因此，我們認為到今年年底，汽車和工業將處於更健康的狀態。

So given the mix of that, it's hard to tell you the -- if the Q3 will recover to 70% utilization rate. We certainly see the -- some of the market segment has a healthy inventory. So they have -- the demand will more directly linked to the end market needs and -- versus the other -- the auto and the industrial still have to digest their existing inventory on hand.

因此，考慮到這些因素，很難告訴你第三季的使用率是否會恢復到 70%。我們當然看到——一些細分市場擁有健康的庫存。因此，他們的需求將更直接地與終端市場需求連結起來，而與其他市場相比，汽車和工業仍然必須消化現有的庫存。

So if the macro situation is healthier, if the macro is a recover, which we expect the computer, consumer and the communication segment, the demand will redirect to us to improve the loading situation. So there's so many different variables right now. And given the insufficient visibility, I can't give you anything specific, but we definitely feel optimistic about that because the inventory situation is improving in many of the market segments already. We just have to continue monitoring the progress, and we will keep you updated quarter-by-quarter.

因此，如果宏觀情況更加健康，如果宏觀情況正在復蘇，我們預計電腦、消費者和通訊領域的需求將轉向我們，以改善負載狀況。所以現在有很多不同的變數。鑑於可見性不足，我無法向您提供任何具體信息，但我們對此絕對感到樂觀，因為許多細分市場的庫存狀況已經在改善。我們只需要繼續監控進度，我們將逐季向您通報最新情況。

Great. So my last question is in terms of 28-nanometers or 22 because on the demand side, actually, we found some of the clients are migrating from 22/28 to maybe FinFET process nodes, including SSD controller or Wi-Fi 7. And on the supply side, we found that your competitor in China is playing into [intentional mass auction] for 28 high-voltage process [node]. So the demand is moving into the FinFET process now. And on the supply side, we know that UMC has kept good positions in 28-nanometers. But on the supply side, we found that the new players are planning to enter the high-voltage process market. So how do you look at -- or how do you plan to keep your market shares or keep your technology leadership in high voltage or in those kind of niche markets or your products or to maintain your market shares?

偉大的。所以我的最後一個問題是關於 28 奈米還是 22 奈米，因為在需求方面，實際上，我們發現一些客戶正在從 22/28 遷移到 FinFET 製程節點，包括 SSD 控制器或 Wi-Fi 7。我們發現你們在中國的競爭對手正在對28個高壓製程[節點]進行[故意批量拍賣]。因此，現在需求正在轉向 FinFET 製程。而在供應方面，我們知道聯華電子在28奈米方面保持著良好的地位。但在供應方面，我們發現新玩家正計劃進入高壓製程市場。那麼，您如何看待——或者您計劃如何保持您的市場份額或保持您在高壓或此類利基市場或您的產品中的技術領先地位或保持您的市場份額？

Fundamentally, the answer to that is we need to stay competitive. In the past and even currently, right now, at this moment, we work closely with customer -- strategic customer to build specialty technologies, differentiation and lasting value for them to enhance their -- our product portfolio as well as our customers' product portfolio and with a diversified capacity. And so that -- we want to do that to offer our customer with a competitive solution. And so I think that's the answer to that. The competition is everywhere. And the key answer to that is we have to stay competitive, and we'll definitely strive to do that.

從根本上來說，答案是我們需要保持競爭力。在過去，甚至現在，此時此刻，我們與客戶——策略客戶密切合作，為他們打造專業技術、差異化和持久價值，以增強他們的——我們的產品組合以及我們客戶的產品組合併具有多元化的能力。因此，我們希望這樣做為我們的客戶提供有競爭力的解決方案。所以我認為這就是答案。競爭無所不在。關鍵的答案是我們必須保持競爭力，我們一定會努力做到這一點。

Next one, Laura Chen, Citi.

下一位是花旗銀行的勞拉·陳 (Laura Chen)。

I think my question is also kind of a follow-up on the CapEx outlook and also the depreciation. Since Jason, you mentioned that the CapEx will pick up in this year, I'm just wondering that looking forward, how should we look at the depreciation cost trend into next year? How would that impact our gross margin?

我認為我的問題也是對資本支出前景和折舊的後續。既然Jason，您提到今年資本支出將會增加，我只是想知道展望未來，我們該如何看待明年的折舊成本趨勢？這將如何影響我們的毛利率？

The depreciation impact will be a kind of a delay factor. So if the CapEx is big in 2024, I think the depreciation expense probably will be peak 2 or 3 years later. So the trend will still be on a minor upward trend all the way to 2026.

折舊影響將是延遲因素。因此，如果 2024 年資本支出很大，我認為折舊費用可能會在 2 到 3 年後達到高峰。因此，到 2026 年，這一趨勢仍將保持小幅上升趨勢。

Yes, so the magnitude of the depreciation cost increase for the following few years, you expect that would be more like a steady increase or that will be gradually like a scale up because still, in the past 2 years, we see the CapEx increase.

是的，因此接下來幾年折舊成本增加的幅度，您預計這將更像是穩定增加或逐漸擴大，因為在過去兩年中，我們仍然看到資本支出增加。

Keeping our ROI-driven base CapEx, and we are managing our overall depreciation expenses as a percentage of overall revenue. So I do expect the increased magnitude should be under control and also acceptable by the investor community.

維持投資報酬率驅動的基本資本支出，我們將整體折舊費用佔總收入的百分比來管理。因此，我確實預計增加的幅度應該受到控制，投資者群體也可以接受。

Okay, thank you. And also for the AI opportunities, I understand that, Jason, you mentioned that will be 10%, 20% addressable market? And where are we now? And do we expect there will be a secular growth for the following 2, 3 years?

好的謝謝。對於人工智慧機會，我知道，傑森，你提到這將是 10%、20% 的潛在市場？我們現在在哪裡？我們預計未來 2、3 年會出現長期成長嗎？

Well, I mean, Laura, like I said, we're still in the early stage of the proliferation of the AI -- Edge AI. Most of the focus today is running the computation chips for the AI modules today. So we have a very small exposure there. And -- but we do expect the Edge AI will start coming in. And the -- there are some of the projects that we have in discussion with customers. They all have a very high expectation. The market was taking out soon, but I don't have any specifics today. We do project those applications or those features will be used in the Edge AI in the next few years, and that will probably be representing at 10% to 20%, but it could be even higher. But at this point, we project about 10% to 20% of the AI silicon, yes.

嗯，我的意思是，勞拉，就像我說的，我們仍處於人工智慧（邊緣人工智慧）擴散的早期階段。今天的大部分焦點是運行人工智慧模組的計算晶片。所以我們在那裡的曝光度非常小。而且 - 但我們確實預計邊緣人工智慧將開始出現。他們都抱有很高的期望。市場很快就會出局，但今天我沒有任何具體資訊。我們確實預計這些應用程式或這些功能將在未來幾年內用於 Edge AI，這可能會達到 10% 到 20%，但可能會更高。但目前，我們預計 AI 晶片的佔比約為 10% 到 20%，是的。

Ladies and gentlemen, we are taking the last one. The last question, Timm Schulze-Melander, Redburn Atlantic.

女士們先生們，我們要拿最後一張。最後一個問題，蒂姆·舒爾茨-梅蘭德，雷德本大西洋月刊。

I just had 2, if I could sneak them in, please. The first one was on the advanced packaging and chip integration. You talked about hybrid bonding moving into greater volume in 2024. Just wondering if you could share a few more details about the end application and if that's the partnership that you had press-released with ASE, Faraday and Cadence, is that the application? And then I had a quick follow-up, please.

我只有 2 個，請幫我把它們偷偷放進去。第一個是先進封裝和晶片整合。您談到混合鍵合將在2024 年實現更大容量。應用？然後我進行了快速跟進，請。

Well, first, for the wafer-to-wafer hybrid bonding solution today, the applications for the RF front-end module, and the -- for the -- it's not completely correlated with the ecosystem press-release. But to address the -- your part of the question about the ecosystem compensation, for the ecosystem, we are not talking about one specific solution. We're talking about the UMC overall 3D-IC solution is leveraging the entire ecosystem to support that. We do not do turnkey solution, means the end-to-end solution. We're only providing wafer-to-wafer hybrid bonding or the interposer and solution while we have all the ecosystem partners to support the customer to provide the total solution. So that's not only limited with the hybrid bonding.

嗯，首先，對於當今的晶圓到晶圓混合鍵合解決方案，射頻前端模組的應用，以及 - 對於 - 它與生態系統新聞稿並不完全相關。但為了解決你所提出的關於生態系統補償的問題，對於生態系統，我們並不是談論一個具體的解決方案。我們談論的是 UMC 整體 3D-IC 解決方案正在利用整個生態系統來支援這一點。我們不做交鑰匙解決方案，而是指端到端的解決方案。我們只提供晶圓到晶圓混合鍵合或中介層和解決方案，而我們擁有所有生態系統合作夥伴來支援客戶提供整體解決方案。因此，這不僅限於混合鍵合。

Okay. But for that hybrid bonding, are you actually doing that wafer-to-wafer bond yourself in a UMC facility, or is that being outsourced or shared with some partners?

好的。但對於混合鍵合，您實際上是在 UMC 工廠中自己進行晶圓間鍵合，還是外包或與一些合作夥伴共享？

It's in-house, yes.

這是內部的，是的。

Okay. And maybe just if I can, one sort of much, much bigger picture, long-term question. The last year or so have seen significant capacity expansion in more mature nodes among China-based chip makers across a whole range of products. Just as you look out 3, 5 years, how does that sort of influence the sort of strategic land shape -- landscape and the amount of competition that you see or that you expect UMC to face?

好的。也許如果可以的話，這是一個更大、更遠大的、長期的問題。在過去一年左右的時間裡，中國晶片製造商的全系列產品在更成熟的節點上出現了顯著的產能擴張。就像您展望 3、5 年一樣，這會如何影響您看到或期望聯華電子麵臨的戰略地形——景觀和競爭程度？

Well, I mean, we kind of touched that earlier. The -- it's a couple of things that we see that driving the landscape changes. One is we do see more capacity build up expanding for geopolitical reasons and/or for the reason the semiconductor industry has become so important. So people want to build up more capacity regionally. And so there are multiple reasons that drives the overall capacity buildup. And the -- fundamentally, I mean, we believe we need to stay competitive.

嗯，我的意思是，我們之前就曾經觸及過這一點。我們看到有幾件事推動了格局的改變。一是我們確實看到由於地緣政治原因和/或半導體行業變得如此重要而擴大產能建設。因此人們希望在區域內建立更多的能力。因此，推動整體產能建設的原因有很多。我的意思是，從根本上來說，我們相信我們需要保持競爭力。

So we're working closely with our customers to build differentiation and to provide value to enhance our product portfolio. And the end goal is, we will strive to minimize the -- some of the commodities exposure in some of the selected markets, if those capacity build up and it could have affected the market -- the end market with some of the commoditized products. And so we need to continue to differentiate ourselves to minimize the exposure with that.

因此，我們正在與客戶密切合作，以建立差異化並提供價值來增強我們的產品組合。最終目標是，我們將努力最大程度地減少某些選定市場中的某些商品風險，如果這些產能增加並且可能會影響市場（某些商品化產品的終端市場）。因此，我們需要繼續使自己與眾不同，以盡量減少與之相關的風險。

If we look at the buildup situation, if they are driven by the geopolitical tension, that will, in our view, impose not only the constraint, but it also presents some of the opportunity as a customer seeking alternative to support their sourcing objective. And for UMC, we are well-positioned because of our geographically diversified manufacturing sites, which allows us to work with the customers to navigate this geopolitical concurrence. We are only the few foundry that have fabs across Singapore, Japan, Taiwan and China and back with a comprehensive technology portfolio, not single node, not limited technology offering, but very comprehensive technology portfolio.

如果我們看看累積情況，如果它們是由地緣政治緊張局勢驅動的，我們認為，這不僅會帶來限制，而且還為尋求替代方案以支持其採購目標的客戶提供了一些機會。對於聯華電子來說，我們處於有利地位，因為我們的製造基地分佈在不同的地理位置，這使我們能夠與客戶合作應對這一地緣政治衝突。我們是少數幾家在新加坡、日本、台灣和中國大陸設有晶圓廠並擁有全面技術組合的代工廠，不是單節點、不是有限的技術產品，而是非常全面的技術組合。

And that could be bridged between fab, which actually is very beneficial to some of the customers if they want to have a fab flexibility, the cross fab flexibility. And each of our sites is equaled with sizable capacity that can serve numerous market segments. And each of our regional manufacturing site also being well established with a still and complete ecosystem, and we can run very highly efficient local operations.

這可以在晶圓廠之間架起橋樑，如果某些客戶想要擁有晶圓廠的靈活性，跨晶圓廠的靈活性，這實際上對他們非常有利。我們的每個站點都具有相當大的容量，可以服務眾多細分市場。我們的每個區域製造基地也建立了良好的穩定和完整的生態系統，我們可以運作非常有效率的本地運作。

And if you look at ourselves, if you look at longer term, besides our strong manufacturing footprint in Asia, now we also extend our capacity offering into Arizona. You saw the cooperation with the U.S. partner in 12-nanometer. That's another testament that we're expanding our technology offering as well. And so this will continue to further our competitiveness and to strengthen our customer supply chain resilience. So I think we can bring value to customers, and that's how you compete. I think we are positioning ourselves to continue improve our market relevance, our market position. And hopefully, the customer will see that, and they recognize the value, then they will stay competitive and to differentiate ourselves. I hope that gives you a bit of context in terms of bigger picture.

如果你看看我們自己，如果你著眼長遠，除了我們在亞洲強大的製造足跡之外，現在我們還將我們的產能擴展到亞利桑那州。你看到了與美國合作夥伴在12奈米方面的合作。這也證明了我們正在擴展我們的技術產品。因此，這將繼續提高我們的競爭力並增強我們的客戶供應鏈彈性。所以我認為我們可以為客戶帶來價值，這就是你的競爭方式。我認為我們正在定位自己，以繼續提高我們的市場相關性和市場地位。希望客戶能夠看到這一點，並認識到其價值，然後他們將保持競爭力並讓自己脫穎而出。我希望這能為您提供一些更宏觀的背景資訊。

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

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。我現在將事情轉交給 UMC IR 主管進行總結發言。謝謝。

Thank you for attending UMC conference call 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 nice day.

感謝您今天參加 UMC 電話會議。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。祝你今天過得愉快。

Thank you. Ladies and gentlemen, that concludes our conference for first quarter 2024. 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. Thank you, and goodbye.

謝謝。女士們、先生們，2024 年第一季的會議到此結束。 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。謝謝，再見。