Wafer output volume grew 2.6% and UMC's Q2 profit exceeded expectations.

UMC (UMC.US) announced its 2024 second quarter earnings before the US market opened on July 31. The earnings report showed that UMC's Q2 revenue was $1.75 billion, above the market expectation; net income was $425 million, with diluted earnings per share (EPS) of $0.17, above the market expectation of $0.14, and $0.196 a year ago.

On a local currency basis, UMC's Q2 revenue was NT$56.8 billion, up 0.9% YoY; its consolidated gross margin was 35.2%, down from 37.4% in Q1; its net profit attributable to shareholders of the parent company was NT$13.79 billion, or NT$1.11 per share.

UMC said, "In Q2, due to strong demand in the consumer market, wafer shipments increased by 2.6% MoM, and the utilization rate of wafer fabs increased to 68%. Due to the strong demand of WiFi and digital TV applications, the business contribution of 22/28nm increased MoM. In addition, due to the favorable exchange rate and improved product mix, the gross margin in Q2 was higher than the previous expectation."

The inventory turnover days increased by 3 days to 88 days.

As of the end of June, UMC's cash and cash equivalents increased to NT$121.23 billion.

Guidance

UMC expects its wafer shipments to grow by a mid-single-digit percentage in the third quarter; it expects its gross margin to be around 30%, with a utilization rate of about 70%.