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 2 hours after the conference is finished. Please visit our website, www.umc.com, under the Investor Relations, Investors, Events section. Now I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, please begin.

歡迎大家參加聯華電子 2024 年第一季財報電話會議。 （操作員指示）供您參考，本次電話會議現已透過網路現場直播。網路直播重播將於會議結束後2小時內提供。請造訪我們的網站 www.umc.com，請造訪「投資者關係」、「投資者」、「活動」部分。現在我想介紹聯華電子投資者關係主管林邁克爾先生。請林先生開始。

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，歡迎參加 UMC 2024 年第一季電話會議。以及聯華電子財務長劉啟東先生。稍後，我們將聽取財務長介紹第一季的財務業績，然後聽取總裁關於 UMC 重點關注事項和 2024 年第二季指引的關鍵資訊。我們的總裁和財務長結束演講後，將進行問答環節。聯華電子的季度財務報告可在我們的網站 www.umc.com 的「投資者財務」部分找到。

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多種風險和不確定因素的影響，可能導致實際結果大不相同，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美國證券交易委員會和中華民國證券當局提交的文件。在這次會議期間，您可以觀看我們的財務演示材料，該材料正在透過網路進行現場直播。

Now I would like to introduce UMC's CFO, Mr. Chi-Tung Liu, to discuss UMC's first quarter 2024 financial results.

現在我想介紹聯華電子的財務長劉啟東先生，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 年第一季的投資者會議簡報資料，您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，合併營收為546.3億新台幣，毛利率為30.9%。歸屬於母公司股東的當期淨利為104.6億元，每股收益為0.84元。 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，與上一季的財務數據相比，營收略有下降，為 54.6%——抱歉，是 546 億新台幣。毛利率下跌5.1%至30.9個百分點或168.99億新台幣。通常第一季的營業費用是季節性的低點。因此，我們可以看到24年第一季的營業費用下降了13.4%至57億新台幣。我們的其他營業收入主要是政府補貼，第一季下降幅度較大，為5.13億新台幣。這主要來自於我們廈門的業務。他們的政府補貼確認與折舊曲線一致，該曲線在 2024 年已大幅下降。第一季度每股收益為0.84新台幣。

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.

第 6 頁，與去年同期相比，營收也維持在相似的範圍內，幾乎小幅成長了 0.8%。但毛利率卻從第一季的35.5個百分點下降至30.9個百分點，主要由於折舊費用等成本增加。而對於非營業收入來說，也有一個很大的差異，這主要是因為我們的投資組合、投資持有。這是以市價計算的收益，只有大約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7頁，我們的現金現在約為1190億新台幣，我們的總股本為3780億新台幣。大部分增幅來自​​PP&E、物業、廠房及設備，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.

第 8 頁，我們對 2024 年第一季的 ASP 進行了一次性年度調整，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，其幅度與第一季的 ASP 幅度非常相似。

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 頁上，我們原來的收入明細與上一季相比保持相對相似。歐洲從去年第四季的 11% 下降至今年第一季的 8%，降幅為 3%。

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很大變化。因此本季的比例為 18% 對比 82%，而上一季的比例為 22% 對比 78%。在第11頁，應用程式細分保持相對穩定。

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，我們看到一些客戶出現了季節性的下調，這導致我們的22/28收入個百分點小幅下降了33%。其餘技術幾何相對穩定。

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.

在第 13 頁，我們以 12 吋等效產能劃分，大部分成長來自台南廠區的 12A，這是我們的 P6 擴建，而我們的其他一些廠區的效率改進也會存在一些零星的領域。今年第一季12吋總產能約120萬新台幣。我們第一季後的資本支出維持不變，2024年的現金資本支出仍約為33億新台幣。

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 UMC 2024 年第一季業績的摘要。現在我將電話轉給聯華電子總裁 Jason Wang 先生。

Thank you, Chi-Tung. Good evening, everyone. Here, I would like to share UMC's first quarter results.

謝謝你，Chi-Tung。大家晚上好。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，由於電腦領域的回暖，我們的晶圓出貨量較上季成長了 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，我們仍能維持相對健康的利潤率。受電源管理 IC、RFSOI 晶片和 AI 伺服器矽中介層的需求推動，我們的特色業務貢獻率上升至總收入的 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.

在本季度，我們的團隊繼續在關鍵項目上取得良好進展，包括為客戶提供客製化的解決方案以及服務於5G AIoT和汽車市場中高成長領域的新技術平台。其中包括嵌入式高壓、嵌入式非揮發性記憶體、RFSOI 和 3D-IC 解決方案。為貫徹向股東提供穩定、可預測的股息政策，聯華電子董事會近期批准向股東派發每股約 3 新台幣的現金股息，此派息率將高於去年。此舉需獲得五月年度股東大會的批准。

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。儘管我們仍預期短期內宏觀不確定性和成本阻力將產生一些持續影響，但聯華電子將繼續對技術、產能和人才進行投資，以確保聯華電子準備好迎接由 5G 和 AI 創新推動的下一階段成長。

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.

現在讓我們來看看 2024 年第二季的指引。我們的晶圓出貨量將以低個位數百分比成長。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 年的現金資本支出預算為 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。現在我們可以回答問題了。

(Operator Instructions) First question, we'll have Randy Abrams, UBS.

(操作員指示) 第一個問題，我們有瑞銀的蘭迪艾布拉姆斯 (Randy Abrams) 來回答。

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?

我想問的第一季度是關於 28 奈米的，您提到它在第一季出現了季節性下降。您能否談談前景，例如，您認為該市場是否會復甦，以及在提升其餘產能的同時，您如何看待 P6 的前景？您如何看待應用程式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，即 22 日和 28 日，我們看到了下降，因為我們正經歷智慧型手機的季節性，這導致 28 日和 28 日的負載較輕。我們確實預計 2024 年第二季 28 奈米晶圓的出貨量將有所回升。 2024 年第一季之後，我們將看到受通訊和消費領域需求推動的晶圓出貨量增加。

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。總體而言，混合定價堅挺，但混合定價確實回到了 28。是否會有類似的壓力，或者您是否預計每年第一季將是進行更大規模談判的時候？

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。正如我們在一月份電話會議上提到的那樣，在第一季一次性定價更新之後，平均售價將保持穩定，我們仍然期待這一點。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 年下半年價格將保持穩定。

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——就同類價格調整等方面而言，我們認為重點應該放在提升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符合我們的價值主張，但它還包括保持競爭力和對市場動態的適應力，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。因此，這聽起來大體上是堅定的，但如果是競爭形勢，則需要一些靈活性。

That's correct, yes.

是的，沒錯。

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。重新審視資本支出，我想您上個季度提到過，其中大部分是 P6 或基礎設施的剩餘部分。因此，許多設備支出仍有待落實，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第一階段的容量有多大呢？您是否已決定提出第一階段的計劃，例如您是否有足夠的金額或可能需要支出多少？我認為最有可能是在 2025 年。

Are you referring to P6 or P3?

您指的是 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?

抱歉，新加坡。其實我指的是──因為你在進行新加坡的建設，所以明年你在新加坡的投資金額會有多少呢？

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，首先，你是對的。上個季度，我們確實提到了 2024 年的資本支出數字，其中約 60% 將用於 12i P3 基礎設施以及一些最低限度的工具和等效物。所以——我們在 P3 上投入了資金，但主要用於基礎設施。並且—考慮到當前的市場動態和客戶狀況，我們預計 12i P3 的生產將於 2026 年 1 月開始。 P3 的產量將從 26 年下半年開始大幅增加。

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將會很大？您是否仍會 — — 聽起來大多數設備可能要推遲到明年，實際上要到 2026 年，所以我們應該想想 — — 我的意思是，有沒有一個粗略的方法來考慮這個問題，因為它會影響 — — 比如折舊一直在上升，但也許可以通過推遲來平衡它？

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——我們當然正在做到這一點。我們預計資本支出將在今年達到峰值，並且不會首先影響公司的現金股利政策。我相信人們關心這一點。 正如我們過去所說的那樣，我們的資本支出策略繼續保持嚴謹、以投資回報率為導向，同時保持我們的承受能力。所以這意味著我們正在管理這一點，但資本支出將在今年，也就是 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 GPU, the ASICs. 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。我確實看到您已確認了 3 新台幣的股息。實際上，最後一個問題與人工智慧有關。很多注意力都集中在高階產品上，像是 GPU、ASIC。但你確實在你的評論中提到了一點提醒——你有矽中介層。但是您能否概述一下您仍有機會的地方，例如這似乎是最強大的 - 仍然是最強大的動力驅動力，例如 UMC 可以參與哪些領域，例如 [矽中介層] 或其他組件進入 AI 或 HPC？

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，我們當然希望增加出口，但現在還不行。好吧，在這一點上，雖然最近的AI晶片的重點一直放在最先進的計算晶片上，但運行AI模組的晶片將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，即資料傳輸以及電源管理。具體來說，AI伺服器將配備高速IO晶片和記憶體控制器來處理資料傳輸，並為每個運算和記憶體單元配備電源管理IC來優化功耗。

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 等技術都非常適合穿戴式裝置、智慧型手機等邊緣 AI 應用。因此，我們的解決方案將使這些 Edge AI 設備在電腦效能、（聽不清楚）和電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 Edge AI 解決方案推向市場。

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，就像我在一開始說的那樣，雖然我們仍處於邊緣人工智慧的早期階段，但我們已經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。儘管我們還處於早期階段，但根據目前的預測，我們預計 UMC 在整個 AI 半導體市場中的潛在市場份額將達到 10% 至 20% 左右。

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

好的。所以你將用你的投資組合捕捉 10% 到 20% 的 AI TAM，好的。

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。解決方案可以有針對性，然後（聽不清楚）就有意義了。另外，需要澄清的是，在矽中介層方面，您是否計劃從 6,000 擴展？我認為這是您給出的最後一個指導數字，6,000，您是否願意在此基礎上進一步增加容量？

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。讓我更詳細地闡述我們的 3D-IC 空間。除了中介層之外，我們的 3D-IC 產品還包括晶圓到晶圓混合鍵合、帶有 TSV 的主動間隔以及帶有 TTC 的 2.5D 中介層。因此，中介層是產品之一，也是當今市場的現狀。但我們謹慎監控目前中介層容量的擴展，並持續專注於其餘解決方案的擴展。

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垂直堆疊矽片或晶片為半導體裝置提供經濟高效的性能效率替代方案，從而提供小尺寸的尺寸、增強頻寬並降低各種應用（包括邊緣 AI、資料中心和通訊）的功耗。因此，我們對目前的中介層擴展解決方案持謹慎態度，但我們的目標是未來使用 TTC 擴展中介層，使用 TSV 擴展其他間隔，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，Jason，我想上次你提到你對代工的增長率預期大約是高個位數，並預計 UMC 會以類似的速度增長或努力以類似的速度增長。這仍然是您現在的預期嗎？數字上有變化嗎？

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.

Gokul，是的，你記得很清楚。是的，讓我向你提供一些最新情況。有一些變化。一、有些領域我們沒有改變。例如，我們仍然預測半導體產業將以中等個位數成長。這並沒有改變。對於代工廠來說，年復一年的成長率將保持在百分之十幾，而且這種情況已經改變了。然而，2024 年代工廠的大部分成長將由 AI 伺服器推動。我們實際上正在繼續監控這一點。我認為最大的勢頭正在人工智慧伺服器上出現。因此，UMC 目標市場的成長在 2024 年仍然保持持平。

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所提到的RF-SOI以及高壓驅動IC和OLED的一些專業專案。您能否談談你們的市場佔有率，特別是在RF-SOI領域，規模有多大？因為看起來你開始從某些平台上的當前市場領導者手中奪取一些市場份額。那麼能否談談專業平台，特別是RF-SOI和OLED驅動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長。不過，我現在還沒有具體的數字可以跟你們分享，也許下次我才能向你們更新。嗯，對於非揮發性記憶體，我們在這方面也取得了一些進展，同時我們一直保持在嵌入式高壓的市場地位。

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。我還有一個問題是關於——由於我們正準備將資金主要用於晶圓廠 12i P3，那麼我們是否有可能從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，而政府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 Gokul，你能再重複一次這個問題嗎？

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。所以我想問一下，對於新加坡工廠，我們是否會獲得任何資本抵消，例如抵消我們資本支出的資本支出抵消，或者主要是像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，但新加坡政府確實發布了政府激勵措施，包括稅收減免以及資本支出補貼。而且由於我們在新加坡擁有更先進的技術投資，整體方案等於或優於我們先前的投資 P1、P2。因此我們非常感謝新加坡政府的大力支持。而新加坡業務樞紐的擴大實際上將使我們因更大的經濟規模而獲得更多的利益。

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

那麼，我們之前預測的 50 億新台幣支出更像是一個總資本支出數字，我們應該假設嗎？

Yes, roughly for P3, roughly.

是的，大致對於 P3 來說，大致是如此。

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。有沒有針對8吋容量彈性的計畫？是否有計劃將 8 英寸轉換為其他領域、複合半導體、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.

首先，我們繼續預期一些 12 吋成熟節點晶圓廠將面臨壓力，進而影響 8 吋供應鏈。所以我們絕對需要解決這個問題。雖然主要的串連應用肯定仍將是8吋節點，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。目前大部分碳化矽都是6英寸，我們更關注8英寸的遷移，一旦成熟，我們就可以更新更多進展。

Next one, Brad Lin, Bank of America.

下一位是美國銀行的布拉德林 (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?

我有兩個問題。一個是矽中介層或先進封裝。我們了解到管理階層對於擴大這部分產能持謹慎態度或說不太積極。因此，我們有望達到每月 6k 左右的目標，並且不會進一步擴張，我們應該這樣假設嗎？然後後續的事情是，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。那我們什麼時候可以期待這個產品業務順利起飛呢？

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 的產能，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 年投入生產。因此，我們逐步引入了一些先進的晶片到晶片和晶圓到晶圓的堆疊解決方案，並逐步提高了產能。

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。很高興聽到這個消息。我的第二個問題是關於—我們的節點遷移。我們了解到 22 和 28 奈米的 OLED 驅動 IC 業務表現良好，並且一些產品從 40 奈米遷移到 22 和 28 奈米。

So you're talking about 40 or 14?

所以您說的是 40 還是 14？

40, 4-0.

40，4-0。

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 英寸，40 和 65 的利用率在 2024 年下半年將保持平穩。同時，仍有一些應用進入 40 奈米技術，例如 RFSOI 以及非揮發性記憶體。它們是一些將採用40奈米技術的新應用。

Got it. Actually, I also wanted to ask about 14, 1-4. 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14，1-4。所以儘管目前產能有限，但市場仍存在新興的商機。公司是否計劃為這款14的擴張投入更多資源？

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.

我們目前在FinFET方面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。重點是努力在共同發展上取得良好進展並按計劃進行。而且，我們也看到了人們的高度興趣，並且看到了大量的成長。目前，我們正在與客戶合作，加快 12 奈米的生產進度。所以是的，我的意思是重點將轉移到 12 奈米而不是 14 奈米。

Next one, Bruce Lu, Goldman Sachs.

下一位是高盛的 Bruce Lu。

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（聽不清楚）的看法。如果你看一下你的指導，你指導的總收入將持平或略有上升，這是你的季度收入的連續增長，就像接下來的幾個季度一樣，大多數情況下，每個季度的收入都會持平或略有下降。如果 ASP 不再受到侵蝕，您的利潤率將會穩定在 30%。所以說——該行業根本沒有復甦。因此在我看來，這個庫存（聽不清楚）週期比預期的要長得多。那麼，您何時會看到庫存調整——補貨將開始發揮作用，並為您的業務帶來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。我們注意到行業整體庫存水準正在持續改善。具體來說，我們看到計算、消費者和通訊市場中心的庫存已經達到健康水準。然而，我們仍觀察到顧客在庫存補貨行為中採取較保守的態度。換句話說，我們看到的更多的是緊急訂單，而不是對未來的信心預測。我認為主要是因為最大的不確定性仍然在於整體宏觀前景，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.

正如我之前提到的，其他兩個市場領域的汽車工業領域的庫存消化速度仍然較慢。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，我們確實認為代工產業的成長率將達到百分之十幾。不過，大部分資源還是分配給了AI伺服器。因此我認為，與其他市場應用相比，人工智慧伺服器的成長率將會更高。所以 — — 由於我們在 AI 伺服器上的曝光較少，所以我認為我們目前的預測更加保守。不過，我們對庫存、情況感到樂觀。

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保持強勁，你們將繼續[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，其他的事情，我們確實預見到汽車和工業領域的庫存健康狀況 - 到年底庫存狀況將變得更加健康。因此，我認為從 25 年開始，UMC 可尋址的所有細分市場的庫存狀況都會變得更加健康。

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 開始詳細講解了。我想知道 UMC 在這個業務中的價值主張，因為你們沒有（聽不清楚），你們沒有 3 奈米或 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高級節點晶片時，您在哪裡看到您的價值？這個業務的獲利能力怎麼樣？

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，首先，你是對的。但如果我們具體來看這個市場，有些設備是從外形尺寸的角度來考慮，而有些設備則從增強頻寬和降低功耗的角度來考慮。因此，如果您有一個橫向視角，我認為從小尺寸的角度來看，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.

有些應用程式可能需要更好一點，但仍然不是最先進的，因為他們正在尋求外形尺寸和更高頻寬與功耗之間的平衡。但如果你直接提到超高頻寬，那是我們沒有涉及的領域。因此，對我們來說，堆疊、3D-IC 領域仍有相當大的市場。

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

這就是您提到的大約 15% 到 20% 的潛在市場。

That's among the…

這是其中之一…

The total.

總計。

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

是的，整體的AI半導體市場，是的。這是其中的一部分…

Understood. And the profitability? Profitability for this business?

明白了。獲利能力如何？這項業務的獲利能力如何？

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，而且我們已經經營公司幾年了，並且已經改善了我們的結構性機率。當然，我們提供的任何解決方案和營運效率始終是我們考慮的一部分。是的，這對我們來說將是一項有利可圖的業務。

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

那麼我們可以將其視為這項業務的利潤成長嗎？

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，我無法評論利潤率的增長，是的，我們會盡力保持我們的結構性盈利能力。

Next on Charlie Chan, Morgan Stanley.

接下來是摩根士丹利的陳查理 (Charlie Chan)。

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，對週期和市場預測做出了很好的判斷。我認為您的（聽不清楚）正在與您對（聽不清楚）市場的預測相吻合。並且在定價紀律方面也做得非常出色，因此利潤方面做得很好。我有幾個問題。那麼首先，資本支出是否包括美國合作夥伴工廠的一些支出？因為您提到過，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.

我的意思不是到 2024 年這個數字，那還不是很多。所以這不會改變目前的資本支出預測。當我們說資本支出在 2024 年達到峰值，而 2025 年將開始下降時，這已經包含了這一假設，是的。

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

好的。那麼，用於消除瓶頸的任何資本支出都應該在 2025 年之後嗎？

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

嗯，是的，大多數事情都會在那裡發生，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，繼續這個 12 奈米業務，對吧，您說過—您試圖加快客戶的進度。您認為有任何一種生產能夠超越 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。但這種規模的合作自然會面臨各種挑戰，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挑戰。所以，到目前為止，這次合作對我們來說是有益的。因此，我們希望集中精力加速這一進程，但目前我無法給出任何具體細節，但我認為——我可以告訴你，該項目正在按計劃進行，我們有信心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更多的承諾？所以我記得英特爾晶圓廠的產能是 50K 到 60K，對嗎？您有信心可以填補這一空缺嗎？

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.

我的意思是我們從來沒有談論過——我們從來沒有具體談論過容量大小。在產能安排方面，通常我們必須與客戶合作，根據他們的預測與他們保持一致，然後我們才能部署。因此目前還沒有具體的容量數字。其次，我們看到了更多的興趣，因為我們今年早些時候宣布了這一點，顯然，客戶想了解更多。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進展。但首先，我們必須自己證明這一點。因此，今天我們全體人員只專注於執行。從專案執行的角度來看，我們現在預計不會有任何重大風險。

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業內同行感到緊張。例如至少有一個關鍵客戶，Novatek，對吧？我不確定你們是否有超越聯詠的動力，因為聯詠未來可能不會再依賴台積電，而台積電也希望與這些客戶建立更緊密的聯繫。因此，我不確定你們的主要競爭對手在 12 奈米領域是否已經採取了一些反擊措施。

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，我們從不這樣做。從競爭的角度來看這個問題，以便與客戶建立牢固的關係。 它只能在技術領先、製造、能力、卓越和產能供應方面建立根本優勢。所以你必須贏回它。你無法透過關係而獲勝。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?

明白了。祝你成功。那我可以換個話題討論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?

那麼，Chi-Tung，從毛利率方面來說，我想知道您如何模擬電力成本對毛利率的影響？而且，到 2024 年，折舊率是否仍會以每年 20% 的速度成長？

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，折舊率應該會增加 20% 左右或略低一點，也許考慮到新加坡 P3 目前的新時間表。而效用影響其實是所有成本混合在一起之後，其實相當小。我們的目標始終是嘗試透過提高營運效率以及擴大規模經濟的好處來抵消這一影響。因此，第三個預測對我們的營業收入、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。所以聽起來你不打算將這種最低限度的額外成本轉嫁給你的客戶。我對這個評論的理解對嗎？

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碼事。從 ASP 的角度來看，我們的定價策略就像我說的，是基於我們的價值主張而一致的。然後我們 - 我們必須與之保持一致，這包括競爭韌性，對嗎？但是成本，我們總是想嘗試積極的降低成本的努力來補償或抵消一些不利因素並保持結構性機率。所以，對我們來說，這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，我似乎聽到您承認下半場的差距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，我們更專注於市場前景，並且 ASP 預測將保持堅定。但我們確實承受了阻力，就像你說的，2D成本增加，通貨膨脹成本增加，折舊成本增加，所以我們必須處理一些阻力。因此，我們將繼續積極努力改善我們的成本結構。但是 — 因此，目標至少是從這個角度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，即使利用率低於 70%，我們也一直在探索行業動態，對嗎？我的意思是——我認為我們在過去一段時間已經證明了這一點。現在，我們正在應對所有通膨成本壓力帶來的貶值阻力，我認為我們將繼續面臨這種情況。因此，儘管面臨這些挑戰，我們仍將不懈地克服這些挑戰。

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。我的最後一個問題是，關於終端市場趨勢，我有一點觀察。所以我完全尊重你關於週期復甦和市場預測的看法，對嗎？但最近，我們似乎聽到智慧型手機供應鏈持續全面削減的消息。 我想，你的一個主要客戶將會在本週五報告。所以我們看到庫存正在減少，對嗎？中國智慧型手機市場面臨的情況依然嚴峻。您似乎說庫存是健康的。那麼我可以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.

在——我的意思是，我有點觸及了這一點。因此首先，我們對今年剩餘時間的表現持謹慎樂觀的態度。如果我這樣說的話，目前，我們預計 2024 年第一季可能是關鍵時刻。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——此時的可見性不足，考慮到客戶的做法——緊急訂單的做法。

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.

因此，我們對此感到樂觀，但我們需要對此保持謹慎。如果終端市場無法像我們預期的那樣復甦，我們可能會面臨充滿挑戰的下半年。但然而到目前為止，我們還沒有看到這一點。因此，我們真的希望，如果市場繼續消化庫存，逐步改善——終端市場需求逐步改善，我們實際上預見 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.

定價原則和 12 奈米策略的執行非常出色。

Next one, Jason Tsang, CLSA.

下一位是里昂證券的 Jason Tsang。

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.

想知道您是否可以提供更多關於下半年需求的細節。我的意思是，您能否為我們提供有關 28 奈米或（聽不清楚）奈米或 8 英寸的展望或更多細節。

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，既然我們處於當前季度，那麼我們就來談談第二季度吧。對於第二季的展望和應用，我們預計消費和運算領域的晶圓需求將會成長，而汽車工業領域的晶圓需求將保持疲軟，因為它們仍在消化庫存。因此，第二季的表現仍然好壞參半，但我認為整體出貨量將會較上季成長。如果將其分解為技術節點，28 和 22 將逐步改進。而成熟節點方面，12吋、40吋、65吋將保持持平，8吋也將保持持平。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出現正常的季節性需求？我們如何預期——在這個過渡的半個賽季裡，您的利用率是否能達到 70% 左右？我們能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，就像我說的，市場對下半年仍然缺乏足夠的可見性。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。而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，汽車和工業將會處於更健康的狀態。

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，很難告訴您第三季的使用率是否會恢復到 70%。我們確實看到——部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掛鉤，而與其他市場相比，汽車和工業市場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，以改善負載情況。因此，現在存在著很多不同的變數。由於可見度不足，我無法給出具體信息，但我們對此感到樂觀，因為許多細分市場的庫存情況已經在改善。我們只需繼續監控進度，並將按季度向您通報最新進展。

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 奈米或 22 奈米的，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。因此現在需求正在轉向 FinFET 製程。在供應方面，我們知道聯華電子在28奈米領域保持著良好的地位。但在供應方面，我們發現新的參與者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，或者保持您在高壓或那些利基市場或您的產品的技術領先地位，或者維持您的市場份額？

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。過去甚至現在，此時此刻，我們都與客戶——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，並具有多樣化的能力。所以，我們希望做到這一點，為我們的客戶提供有競爭力的解決方案。所以我認為這就是問題的答案。競爭無所不在。而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 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關注。既然 Jason 您提到今年的資本支出將會增加，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？這會對我們的毛利率產生什麼影響？

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.

折舊的影響將是一種延遲因素。因此，如果 2024 年的資本支出很大，我認為折舊費用可能會在 2 或 3 年後達到高峰。因此到 2026 年，趨勢仍將呈現小幅上升趨勢。

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，您預計未來幾年折舊成本增加的幅度將更像是穩定成長，或者是逐漸增加，因為在過去的兩年裡，我們仍然看到資本支出在增加。

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.

保持我們的投資回報率驅動的基本資本支出，並將我們的總折舊費用按總收入的百分比進行管理。因此我確實預期成長的幅度應該是可控的並且也能為投資人所接受。

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。關於人工智慧的機會，我理解，Jason，您提到那將是 10% 到 20% 的潛在市場？我們現在在哪裡？我們是否預期未來 2 至 3 年將出現長期成長？

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，勞拉，就像我說的，我們仍然處於人工智慧——邊緣人工智慧擴散的早期階段。今天的大部分重點是運行 AI 模組的計算晶片。因此我們在那裡的曝光率非常小。但我們確實預期 Edge AI 將開始出現。他們都抱有很高的期望。市場很快就會開始走出低迷，但我今天還沒有任何具體消息。我們確實預測這些應用程式或這些功能將在未來幾年用於 Edge AI，這可能將佔 10% 到 20%，但甚至可能更高。但目前，我們預計 AI 矽片的比例約為 10% 到 20%。

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

女士們、先生們，我們正在進行最後一場演講。最後一個問題，Redburn Atlantic 的 Timm Schulze-Melander。

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.

我剛好有 2 個，請問我可以偷偷把它們放進去嗎？第一個是關於先進封裝和晶片整合。您談到混合鍵合將在 2024 年實現更大批量生產。然後我再快速跟進。

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.

首先，對於今天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——它與生態系統新聞稿並不完全相關。但為了解決您關於生態系統補償的問題，對於生態系統，我們並沒有討論一個具體的解決方案。我們正在討論 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。我們不提供交鑰匙解決方案，而是提供端到端解決方案。我們僅提供晶圓到晶圓混合鍵合或中介層和解決方案，同時我們擁有所有生態系統合作夥伴來支援客戶提供完整的解決方案。所以這不僅限於混合鍵結。

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。但是對於混合鍵合，您實際上是在 UMC 工廠自己進行晶圓到晶圓的鍵合，還是將其外包或與一些合作夥伴共享？

It's in-house, yes.

是的，它是內部的。

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。如果可以的話，也許我可以提出一個更宏觀、更長期的問題。在過去一年左右的時間裡，中國晶片製造商在全系列產品的較成熟節點上實現了顯著的產能擴張。展望未來 3 至 5 年，這會對戰略地形、景觀和您所看到的或預期 UMC 會面臨的競爭程度產生怎樣的影響？

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已經討論過這個問題。我們發現有幾件事推動了格局的改變。一是，由於地緣政治原因和/或半導體產業變得如此重要的原因，我們確實看到更多的產能在擴大。因此人們希望在區域內建造更多的產能。推動整體產能建設的原因是多種多樣的。而且—從根本上來說，我的意思是，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，我們與客戶密切合作，建立差異化並提供價值，以增強我們的產品組合。最終目標是，我們將努力將某些選定市場中的某些商品風險降至最低，如果這些產能增加，可能會影響到某些商品化產品的終端市場。因此，我們需要繼續保持差異化，以盡量減少風險。

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.

如果我們看一下集結情況，如果它們是由地緣政治緊張局勢推動的，那麼在我們看來，這不僅會施加限制，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。對於聯華電子而言，由於我們擁有遍布各地的製造基地，因此我們佔據了有利地位，這使我們能夠與客戶合作，以應對這種地緣政治局勢。我們是極少數在新加坡、日本、台灣和中國設有晶圓廠的代工廠，並擁有全面的技術組合，不是單一節點，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，對於一些想要擁有晶圓廠靈活性、跨晶圓廠靈活性的客戶來說，這實際上非常有利。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。我們每個區域的製造基地都已建立了完善的生態系統，因此我們可以有效率地進行本地營運。

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，如果從長遠來看，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。您看到了與美國合作夥伴在12奈米領域的合作。這也進一步證明我們正在擴大我們的技術產品範圍。因此，這將繼續增強我們的競爭力並增強我們客戶供應鏈的彈性。因此我認為我們可以為客戶帶來價值，這就是競爭的方式。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。我希望客戶能夠看到這一點，並認識到其價值，這樣他們就能保持競爭力並脫穎而出。我希望這能給你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，謝謝你們提出的所有問題。今天的問答環節到此結束。現在，我將發言權交給 UMC IR 主管，請他作最後發言。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.

感謝您參加今天的 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小時內將會有網路直播重播。請造訪 www.umc.com 的「投資者活動」部分。您現在可以斷開連線。謝謝你，再見。