UNITED MICROELECTRONICS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
FOR THE NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2020 AND 2019
Address: No. 3 Li-Hsin Road II, Hsinchu Science Park, Hsinchu City, Taiwan, R.O.C.
Telephone: 886-3-578-2258
The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.
1 |
Review Report of Independent Auditors
To United Microelectronics Corporation
Introduction
We have reviewed the accompanying consolidated balance sheets of United Microelectronics Corporation and its subsidiaries (collectively, the “Company”) as of September 30, 2020 and 2019, the related consolidated statements of comprehensive income for the three-month and nine-month periods ended September 30, 2020 and 2019 and consolidated statements of changes in equity and cash flows for the nine-month periods ended September 30, 2020 and 2019, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”). Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.
Scope of Review
We conducted our reviews in accordance with Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our reviews and the review reports of other independent auditors (please refer to the Other Matter paragraph of our report), nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2020 and 2019, and its consolidated financial performance for the three-month and nine-month periods ended September 30, 2020 and 2019, and its consolidated cash flows for the nine-month periods ended September 30, 2020 and 2019, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed and became effective by Financial Supervisory Commission of the Republic of China.
2 |
Other Matter – Making Reference to the Reviews of Other Independent Auditors
We did not review the financial statement of certain associates and joint ventures accounted for under the equity method. Our review, insofar as it related to the investments accounted for under the equity method balances of NT$23,465 million and NT$9,789 million, which represented 6.37% and 2.62% of the total consolidated assets as of September 30, 2020 and 2019, respectively, the related shares of profit or loss from the associates and joint ventures in the amount of NT$2,788 million, NT$77 million, NT$2,851 million and NT$560 million, which represented 30.29%, 3.91%, 17.08%, and 20.22% of the consolidated income from continuing operations before income tax for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively, and the related shares of other comprehensive income from the associates and joint ventures in the amount of NT$850 million, NT$326 million, NT$809 million and NT$869 million, which represented 8.17%, 12.90%, 4.72% and 10.97% of the consolidated total comprehensive income for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively, are based solely on the reports of other independent auditors.
/s/ Chiu, Wan-Ju
/s/ Hsu, Hsin-Min
Ernst & Young, Taiwan
October 29, 2020
Notice to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.
Accordingly, the accompanying consolidated financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.
3 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | ||||||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, 2020, December 31, 2019 and September 30, 2019 (September 30, 2020 and 2019 are unaudited) | ||||||||
(Expressed in Thousands of New Taiwan Dollars) | ||||||||
As of | ||||||||
Assets | Notes | September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Current assets | ||||||||
Cash and cash equivalents | 6(1) | $98,839,079 | $95,492,477 | $86,754,723 | ||||
Financial assets at fair value through profit or loss, current | 6(2), 12(7) | 916,078 | 722,794 | 633,940 | ||||
Contract assets, current | 6(19) | 332,425 | 214,243 | 113,658 | ||||
Notes receivable | - | 98 | 232 | |||||
Accounts receivable, net | 6(3) | 26,584,696 | 25,438,703 | 23,194,466 | ||||
Accounts receivable-related parties, net | 7 | 373,962 | 289,945 | 217,242 | ||||
Other receivables | 751,060 | 654,466 | 744,625 | |||||
Current tax assets | 37,569 | 26,220 | 34,534 | |||||
Inventories, net | 6(4) | 22,863,410 | 21,714,802 | 19,989,749 | ||||
Prepayments | 1,975,078 | 6,290,518 | 13,307,671 | |||||
Non-current assets held for sale | 6(8) | - | - | 65,237 | ||||
Other current assets | 6(7), 6(19) | 10,803,531 | 2,912,875 | 18,434,452 | ||||
Total current assets | 163,476,888 | 153,757,141 | 163,490,529 | |||||
Non-current assets | ||||||||
Financial assets at fair value through profit or loss, noncurrent | 6(2), 7, 12(7) | 13,531,436 | 13,298,679 | 12,385,232 | ||||
Financial assets at fair value through other comprehensive income, noncurrent | 6(5), 12(7) | 7,957,265 | 14,723,232 | 16,227,393 | ||||
Investments accounted for under the equity method | 6(6) | 25,445,556 | 13,322,143 | 11,725,364 | ||||
Property, plant and equipment | 6(8), 8 | 132,662,133 | 150,374,096 | 148,946,333 | ||||
Right-of-use assets | 6(9), 8 | 7,901,188 | 8,291,517 | 8,074,037 | ||||
Intangible assets | 6(10), 7 | 4,952,036 | 5,198,247 | 3,642,903 | ||||
Deferred tax assets | 7,175,114 | 7,807,583 | 6,165,947 | |||||
Prepayment for equipment | 814,971 | 217,906 | 303,691 | |||||
Refundable deposits | 8 | 2,492,246 | 2,600,733 | 2,749,204 | ||||
Other noncurrent assets-others | 1,835,096 | 596,088 | 333,834 | |||||
Total non-current assets | 204,767,041 | 216,430,224 | 210,553,938 | |||||
Total assets | $ 368,243,929 | $ 370,187,365 | $ 374,044,467 | |||||
(continued) |
4 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | |||||||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
September 30, 2020, December 31, 2019 and September 30, 2019 (September 30, 2020 and 2019 are unaudited) | |||||||||
(Expressed in Thousands of New Taiwan Dollars) | |||||||||
As of | |||||||||
Liabilities and Equity | Notes | September 30, 2020 | December 31, 2019 | September 30, 2019 | |||||
Current liabilities | |||||||||
Short-term loans | 6(11), 6(26) | $7,571,645 | $ 12,015,206 | $ 16,482,956 | |||||
Contract liabilities, current | 6(19) | 1,930,785 | 988,115 | 1,122,187 | |||||
Notes and accounts payable | 7,699,086 | 8,877,065 | 6,627,522 | ||||||
Other payables | 7 | 16,758,004 | 15,235,384 | 12,030,681 | |||||
Payables on equipment | 7,381,834 | 3,031,184 | 3,002,264 | ||||||
Current tax liabilities | 1,217,739 | 939,207 | 1,102,270 | ||||||
Provisions, current | 9(6) | 1,749,003 | - | - | |||||
Liabilities directly associated with non-current assets held for sale | 6(8) | - | - | 2,455 | |||||
Lease liabilities, current | 6(9), 6(26) | 552,145 | 569,957 | 467,610 | |||||
Current portion of long-term liabilities | 6(12), 6(13), 6(26), 12(7) | 8,825,516 | 24,795,600 | 23,599,452 | |||||
Other current liabilities | 6(15), 6(16), 6(26), 7 | 5,464,867 | 6,262,604 | 5,887,500 | |||||
Total current liabilities | 59,150,624 | 72,714,322 | 70,324,897 | ||||||
Non-current liabilities | |||||||||
Contract liabilities, noncurrent | 6(19) | 466,400 | 482,080 | 497,120 | |||||
Bonds payable | 6(12), 6(26), 12(7) | 16,689,830 | 18,687,591 | 18,686,893 | |||||
Long-term loans | 6(13), 6(26), 12(7) | 32,766,717 | 29,200,299 | 36,542,501 | |||||
Deferred tax liabilities | 1,627,140 | 2,087,366 | 2,090,428 | ||||||
Lease liabilities, noncurrent | 6(9), 6(26) | 5,183,579 | 5,461,068 | 5,258,281 | |||||
Net defined benefit liabilities, noncurrent | 6(14) | 3,976,120 | 4,025,373 | 4,140,361 | |||||
Guarantee deposits | 6(26) | 224,387 | 196,110 | 259,656 | |||||
Other noncurrent liabilities-others | 6(15), 6(26), 9(5) | 27,244,169 | 30,118,734 | 31,200,036 | |||||
Total non-current liabilities | 88,178,342 | 90,258,621 | 98,675,276 | ||||||
Total liabilities | 147,328,966 | 162,972,943 | 169,000,173 | ||||||
Equity attributable to the parent company | |||||||||
Capital | 6(12), 6(17) | ||||||||
Common stock | 124,224,015 | 117,243,187 | 117,243,187 | ||||||
Capital collected in advance | - | 332,611 | - | ||||||
Additional paid-in capital | 6(12), 6(17), 6(18) | ||||||||
Premiums | 36,809,962 | 34,404,110 | 34,234,413 | ||||||
Treasury stock transactions | 3,340,664 | 2,744,391 | 2,741,184 | ||||||
The differences between the fair value of the consideration paid or received from acquiring or | 466,457 | 573,336 | 573,336 | ||||||
disposing subsidiaries and the carrying amounts of the subsidiaries | |||||||||
Recognition of changes in subsidiaries’ ownership | 2,770 | 1,218 | 104 | ||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | 86,539 | 123,268 | 108,975 | ||||||
Employee stock options | 13,804 | 214,455 | 175,824 | ||||||
Stock options | - | 1,476,405 | 1,515,297 | ||||||
Restricted stock for employees | 2,170,666 | - | - | ||||||
Other | 12,208 | 13,211 | 10,509 | ||||||
Retained earnings | 6(17) | ||||||||
Legal reserve | 12,536,526 | 11,572,579 | 11,572,579 | ||||||
Special reserve | 11,022,314 | 14,513,940 | 14,513,940 | ||||||
Unappropriated earnings | 46,394,200 | 34,733,761 | 31,702,486 | ||||||
Other components of equity | |||||||||
Exchange differences on translation of foreign operations | (11,385,068) | (8,948,337) | (6,159,724) | ||||||
Unrealized gains or losses on financial assets measured at fair value through other comprehensive income | (766,663) | (2,073,977) | (3,471,356) | ||||||
Gains or losses on hedging instruments | - | - | (2,058) | ||||||
Unearned Employee Compensation | 6(18) | (4,047,137) | - | - | |||||
Treasury stock | 6(17), 6(18) | (119,801) | (119,801) | (119,801) | |||||
Total equity attributable to the parent company | 220,761,456 | 206,804,357 | 204,638,895 | ||||||
Non-controlling interests | 6(17) | 153,507 | 410,065 | 405,399 | |||||
Total equity | 220,914,963 | 207,214,422 | 205,044,294 | ||||||
Total liabilities and equity | $ 368,243,929 | $ 370,187,365 | $ 374,044,467 | ||||||
The accompanying notes are an integral part of the consolidated financial statements. |
5 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | |||||||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | |||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||
For the three-month and nine-month periods ended September 30, 2020 and 2019 | |||||||||
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share) | |||||||||
For the three-month periods ended September 30, | For the nine-month periods ended September 30, | ||||||||
Notes | 2020 | 2019 | 2020 | 2019 | |||||
Operating revenues | 6(19), 7, 14 | $ 44,870,454 | $ 37,738,440 | $131,524,561 | $106,352,583 | ||||
Operating costs | 6(4), 6(10), 6(14), 6(18), 6(19), 6(20), 7, 14 | (35,101,185) | (31,305,920) | (103,375,552) | (92,005,953) | ||||
Gross profit | 9,769,269 | 6,432,520 | 28,149,009 | 14,346,630 | |||||
Operating expenses | 6(3), 6(10), 6(14), 6(18), 6(20), 7, 14 | ||||||||
Sales and marketing expenses | (1,009,400) | (969,734) | (2,977,707) | (2,811,138) | |||||
General and administrative expenses | (1,614,465) | (1,344,804) | (4,696,929) | (3,832,768) | |||||
Research and development expenses | (3,314,223) | (2,813,050) | (9,701,766) | (8,407,417) | |||||
Expected credit impairment gains (losses) | 429,373 | (3,753) | 468,099 | (590,619) | |||||
Subtotal | (5,508,715) | (5,131,341) | (16,908,303) | (15,641,942) | |||||
Net other operating income and expenses | 6(8), 6(15), 6(21), 14 | 2,872,330 | 1,207,569 | 5,151,915 | 3,967,571 | ||||
Operating income | 7,132,884 | 2,508,748 | 16,392,621 | 2,672,259 | |||||
Non-operating income and expenses | |||||||||
Interest income | 144,704 | 245,282 | 610,334 | 745,313 | |||||
Other income | 523,649 | 567,785 | 681,635 | 709,968 | |||||
Other gains and losses | 6(22), 9(6) | (1,145,992) | 67,769 | (1,883,352) | 834,764 | ||||
Finance costs | 6(22) | (486,376) | (769,453) | (1,655,357) | (2,270,057) | ||||
Share of profit or loss of associates and joint ventures | 6(6), 14 | 2,778,475 | 108,905 | 2,845,848 | 505,913 | ||||
Exchange gain, net | 12 | 259,212 | - | - | - | ||||
Exchange loss, net | 12 | - | (751,651) | (299,280) | (426,981) | ||||
Subtotal | 2,073,672 | (531,363) | 299,828 | 98,920 | |||||
Income from continuing operations before income tax | 9,206,556 | 1,977,385 | 16,692,449 | 2,771,179 | |||||
Income tax (expense) benefit | 6(24), 14 | (196,968) | (38,976) | (401,538) | 202,221 | ||||
Net income | 9,009,588 | 1,938,409 | 16,290,911 | 2,973,400 | |||||
Other comprehensive income (loss) | 6(23) | ||||||||
Items that will not be reclassified subsequently to profit or loss | |||||||||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | 882,102 | 1,848,728 | 2,246,483 | 4,686,383 | |||||
Share of other comprehensive income (loss) of associates and joint ventures which will not be reclassified subsequently to profit or loss | 918,815 | 333,124 | 877,716 | 879,098 | |||||
Income tax related to items that will not be reclassified subsequently | 6(24) | (17,016) | (131,554) | 39,883 | (141,712) | ||||
Items that may be reclassified subsequently to profit or loss | |||||||||
Exchange differences on translation of foreign operations | (434,477) | (1,454,645) | (2,352,083) | (499,675) | |||||
Share of other comprehensive (loss) income of associates and joint ventures which may be reclassified subsequently to profit or loss | 25,859 | (3,741) | 13,686 | 41,640 | |||||
Income tax related to items that may be reclassified subsequently | 6(24) | 15,122 | (1,553) | 28,322 | (18,731) | ||||
Total other comprehensive income (loss), net of tax | 1,390,405 | 590,359 | 854,007 | 4,947,003 | |||||
Total comprehensive income | $ 10,399,993 | $2,528,768 | $ 17,144,918 | $7,920,403 | |||||
Net income (loss) attributable to: | |||||||||
Stockholders of the parent | $9,106,271 | $2,928,678 | $ 17,993,985 | $5,870,601 | |||||
Non-controlling interests | (96,683) | (990,269) | (1,703,074) | (2,897,201) | |||||
$9,009,588 | $1,938,409 | $ 16,290,911 | $2,973,400 | ||||||
Comprehensive income (loss) attributable to: | |||||||||
Stockholders of the parent | $ 10,496,677 | $3,540,356 | $ 18,721,336 | $ 10,840,907 | |||||
Non-controlling interests | (96,684) | (1,011,588) | (1,576,418) | (2,920,504) | |||||
$ 10,399,993 | $2,528,768 | $ 17,144,918 | $7,920,403 | ||||||
Earnings per share (NTD) | 6(25) | ||||||||
Earnings per share-basic | $ 0.75 | $ 0.25 | $ 1.50 | $ 0.50 | |||||
Earnings per share-diluted | $ 0.75 | $ 0.23 | $ 1.44 | $ 0.46 | |||||
The accompanying notes are an integral part of the consolidated financial statements.
|
6 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | ||||||||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||||||||||||||||||
For the nine-month periods ended September 30, 2020 and 2019 | ||||||||||||||||||||||||||||||
(Expressed in Thousands of New Taiwan Dollars) | ||||||||||||||||||||||||||||||
Equity Attributable to the Parent Company | ||||||||||||||||||||||||||||||
Capital | Retained Earnings | Other Components of Equity | ||||||||||||||||||||||||||||
Notes | Common Stock | Collected in Advance | Additional Paid-in Capital | Legal Reserve | Special Reserve | Unappropriated Earnings | Exchange Differences on Translation of Foreign Operations | Unrealized Gains or Losses on Financial Assets Measured at Fair Value through Other Comprehensive Income | Gains or Losses on Hedging Instruments | Unearned Employee Compensation | Treasury Stock | Total | Non- Controlling Interests | Total Equity | ||||||||||||||||
Adjusted balance as of January 1, 2019 | 6(17) | $124,243,187 | $- | $40,388,936 | $10,865,280 | $- | $50,723,263 | $(5,706,261) | $(8,819,556) | $(2,058) | $- | $(5,647,430) | $206,045,361 | $ 466,768 | $206,512,129 | |||||||||||||||
Appropriation and distribution of 2018 retained earnings | 6(17) | |||||||||||||||||||||||||||||
Legal reserve | - | - | - | 707,299 | - | (707,299) | - | - | - | - | - | - | - | - | ||||||||||||||||
Special reserve | - | - | - | - | 14,513,940 | (14,513,940) | - | - | - | - | - | - | - | - | ||||||||||||||||
Cash dividends | - | - | - | - | - | (6,916,105) | - | - | - | - | - | (6,916,105) | - | (6,916,105) | ||||||||||||||||
Net income (loss) for the nine-month ended September 30, 2019 | 6(17) | - | - | - | - | - | 5,870,601 | - | - | - | - | - | 5,870,601 | (2,897,201) | 2,973,400 | |||||||||||||||
Other comprehensive income (loss), for the nine-month ended September 30, 2019 | 6(17), 6(23) | - | - | - | - | - | - | (453,463) | 5,423,769 | - | - | - | 4,970,306 | (23,303) | 4,947,003 | |||||||||||||||
Total comprehensive income (loss) | - | - | - | - | - | 5,870,601 | (453,463) | 5,423,769 | - | - | - | 10,840,907 | (2,920,504) | 7,920,403 | ||||||||||||||||
Share-based payment transaction | 6(18) | - | - | 335,166 | - | - | - | - | - | - | - | - | 335,166 | - | 335,166 | |||||||||||||||
Treasury stock acquired | 6(17) | - | - | - | - | - | - | - | - | - | - | (2,859,498) | (2,859,498) | - | (2,859,498) | |||||||||||||||
Treasury stock cancelled | 6(17) | (7,000,000) | - | (1,387,127) | - | - | - | - | - | - | - | 8,387,127 | - | - | - | |||||||||||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | - | - | 362 | - | - | 252,467 | - | (252,467) | - | - | - | 362 | - | 362 | ||||||||||||||||
Changes in subsidiaries’ ownership | 6(17) | - | - | 65 | - | - | (22,280) | - | - | - | - | - | (22,215) | 23,940 | 1,725 | |||||||||||||||
Adjustments for dividends subsidiaries received from parent company | - | - | 9,485 | - | - | - | - | - | - | - | - | 9,485 | - | 9,485 | ||||||||||||||||
Disposal of equity instruments investments measured at fair value through other comprehensive income | 6(5) | - | - | - | - | - | (176,898) | - | 176,898 | - | - | - | - | - | - | |||||||||||||||
Others | 6(17) | - | - | 12,755 | - | - | (2,807,323) | - | - | - | - | - | (2,794,568) | 2,835,195 | 40,627 | |||||||||||||||
Balance as of September 30, 2019 | 6(17) | $117,243,187 | $- | $39,359,642 | $11,572,579 | $14,513,940 | $31,702,486 | $(6,159,724) | $(3,471,356) | $(2,058) | $- | $(119,801) | $204,638,895 | $ 405,399 | $205,044,294 | |||||||||||||||
Balance as of January 1, 2020 | 6(17) | $117,243,187 | $ 332,611 | $39,550,394 | $11,572,579 | $14,513,940 | $34,733,761 | $(8,948,337) | $(2,073,977) | $- | $- | $(119,801) | $206,804,357 | $ 410,065 | $207,214,422 | |||||||||||||||
Appropriation and distribution of 2019 retained earnings | 6(17) | |||||||||||||||||||||||||||||
Legal reserve | - | - | - | 963,947 | - | (963,947) | - | - | - | - | - | - | - | - | ||||||||||||||||
Cash dividends | - | - | - | - | - | (9,765,155) | - | - | - | - | - | (9,765,155) | - | (9,765,155) | ||||||||||||||||
Special reserve reversed | - | - | - | - | (3,491,626) | 3,491,626 | - | - | - | - | - | - | - | - | ||||||||||||||||
Net income (loss) for the nine-month ended September 30, 2020 | 6(17) | - | - | - | - | - | 17,993,985 | - | - | - | - | - | 17,993,985 | (1,703,074) | 16,290,911 | |||||||||||||||
Other comprehensive income (loss), for the nine-month ended September 30, 2020 | 6(17), 6(23) | - | - | - | - | - | - | (2,436,731) | 3,164,082 | - | - | - | 727,351 | 126,656 | 854,007 | |||||||||||||||
Total comprehensive income (loss) | - | - | - | - | - | 17,993,985 | (2,436,731) | 3,164,082 | - | - | - | 18,721,336 | (1,576,418) | 17,144,918 | ||||||||||||||||
Share-based payment transaction | 6(18) | 2,000,300 | - | 2,553,360 | - | - | - | - | - | - | (4,047,137) | 1,678,272 | 2,184,795 | - | 2,184,795 | |||||||||||||||
Conversion of convertible bonds | 6(12), 6(17) | 4,980,528 | (332,611) | 1,862,366 | - | - | - | - | - | - | - | - | 6,510,283 | - | 6,510,283 | |||||||||||||||
Treasury stock acquired | 6(17) | - | - | - | - | - | - | - | - | - | - | (1,678,272) | (1,678,272) | - | (1,678,272) | |||||||||||||||
Share of changes in net assets of associates and joint ventures accounted for using equity method | - | - | (36,728) | - | - | 31,403 | - | (31,403) | - | - | - | (36,728) | - | (36,728) | ||||||||||||||||
The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries | 6(17) | - | - | (106,879) | - | - | - | - | - | - | - | - | (106,879) | 106,879 | - | |||||||||||||||
Changes in subsidiaries’ ownership | 6(17) | - | - | 1,552 | - | - | - | - | - | - | - | - | 1,552 | 1,291 | 2,843 | |||||||||||||||
Adjustments for dividends subsidiaries received from parent company | - | - | 12,927 | - | - | - | - | - | - | - | - | 12,927 | - | 12,927 | ||||||||||||||||
Disposal of equity instruments investments measured at fair value through other comprehensive income | 6(5) | - | - | - | - | - | 1,825,365 | - | (1,825,365) | - | - | - | - | - | - | |||||||||||||||
Non-Controlling Interests | 6(17) | - | - | - | - | - | - | - | - | - | - | - | - | (570,188) | (570,188) | |||||||||||||||
Others | 6(17) | - | - | (933,922) | - | - | (952,838) | - | - | - | - | - | (1,886,760) | 1,781,878 | (104,882) | |||||||||||||||
Balance as of September 30, 2020 | 6(17) | $124,224,015 | $- | $42,903,070 | $12,536,526 | $11,022,314 | $46,394,200 | $(11,385,068) | $(766,663) | $- | $(4,047,137) | $(119,801) | $220,761,456 | $ 153,507 | $220,914,963 | |||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements. |
7 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | ||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
For the nine-month periods ended September 30, 2020 and 2019 | ||||
(Expressed in Thousands of New Taiwan Dollars) | ||||
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Cash flows from operating activities: | ||||
Net income before tax | $16,692,449 | $ 2,771,179 | ||
Adjustments to reconcile net income before tax to net cash provided by operating activities: | ||||
Depreciation | 34,897,228 | 35,161,692 | ||
Amortization | 2,017,807 | 1,453,163 | ||
Expected credit impairment (gains) losses | (468,099) | 590,619 | ||
Net gain of financial assets and liabilities at fair value through profit or loss | (130,288) | (823,570) | ||
Interest expense | 1,599,073 | 2,217,785 | ||
Interest income | (610,334) | (745,313) | ||
Dividend income | (681,635) | (709,968) | ||
Share-based payment | 504,776 | 327,556 | ||
Share of profit of associates and joint ventures | (2,845,848) | (505,913) | ||
(Gain) loss on disposal of property, plant and equipment | (1,100,764) | 10,258 | ||
Loss on disposal of investments | 44,088 | 6,376 | ||
Impairment loss on non-financial assets | - | 85,202 | ||
Exchange (gain) loss on financial assets and liabilities | (530,867) | 794,505 | ||
Gain on lease modification | (1,753) | - | ||
Amortization of deferred government grants | (2,995,847) | (3,061,189) | ||
Income and expense adjustments | 29,697,537 | 34,801,203 | ||
Changes in operating assets and liabilities: | ||||
Financial assets and liabilities at fair value through profit or loss | 324,417 | (73,209) | ||
Contract assets | (122,583) | (21,170) | ||
Notes receivable and accounts receivable | (1,128,699) | (312,999) | ||
Other receivables | (58,479) | 44,096 | ||
Inventories | (1,320,743) | (1,831,753) | ||
Prepayments | 2,763,925 | (1,383,588) | ||
Other current assets | (73,121) | (15,489,013) | ||
Contract fulfillment costs | (299,348) | (80,890) | ||
Contract liabilities | 963,071 | 193,610 | ||
Notes and accounts payable | (1,106,233) | (33,327) | ||
Other payables | 1,535,130 | (1,294,545) | ||
Provisions | 1,749,003 | - | ||
Other current liabilities | (452,260) | 516,326 | ||
Net defined benefit liabilities | (41,296) | (26,813) | ||
Other noncurrent liabilities-others | - | (3,240) | ||
Cash generated from operations | 49,122,770 | 17,775,867 | ||
Interest received | 624,192 | 690,933 | ||
Dividend received | 982,750 | 746,003 | ||
Interest paid | (1,181,855) | (1,274,256) | ||
Income tax refunded (paid) | 125,028 | (566,929) | ||
Net cash provided by operating activities | 49,672,885 | 17,371,618 | ||
(continued) |
8 |
English Translation of Consolidated Financial Statements Originally Issued in Chinese | |||||
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES | |||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
For the nine-month periods ended September 30, 2020 and 2019 | |||||
(Expressed in Thousands of New Taiwan Dollars) | |||||
For the nine-month periods ended September 30, | |||||
2020 | 2019 | ||||
Cash flows from investing activities: | |||||
Acquisition of financial assets at fair value through profit or loss | $ (571,565) | $ (219,917) | |||
Proceeds from disposal of financial assets at fair value through profit or loss | 153,501 | 205,972 | |||
Proceeds from disposal of financial assets at fair value through other comprehensive income or loss | - | 44,466 | |||
Acquisition of investments accounted for under the equity method | (59,900) | (10,000) | |||
Proceeds from disposal of investments accounted for under the equity method | 30,609 | 3 | |||
Increase in prepayment for investments | (107,208) | (5,065) | |||
Proceeds from capital reduction and liquidation of investments | - | 2,213 | |||
Disposal of subsidiary | (417) | - | |||
Acquisition of property, plant and equipment | (14,607,603) | (13,016,979) | |||
Proceeds from disposal of property, plant and equipment | 1,757,441 | 23,417 | |||
Increase in refundable deposits | (159,930) | (149,208) | |||
Decrease in refundable deposits | 267,403 | 153,875 | |||
Acquisition of intangible assets | (1,715,772) | (1,508,795) | |||
Government grants related to assets acquisition | 171,814 | 639,730 | |||
Increase in other financial assets | (10,760,203) | - | |||
Decrease in other financial assets | 2,947,730 | - | |||
Increase in other noncurrent assets-others | (20,128) | (6,496) | |||
Decrease in other noncurrent assets-others | - | 8,786 | |||
Net cash used in investing activities | (22,674,228) | (13,837,998) | |||
Cash flows from financing activities: | |||||
Increase in short-term loans | 8,248,011 | 21,238,950 | |||
Decrease in short-term loans | (12,531,982) | (17,746,353) | |||
Cash payments for the principal portion of the lease liability | (549,252) | (449,157) | |||
Redemption of bonds | (13,702,875) | (2,500,000) | |||
Proceeds from long-term loans | 13,070,300 | 11,459,345 | |||
Repayments of long-term loans | (6,582,691) | (2,517,790) | |||
Increase in guarantee deposits | 289,182 | 252,694 | |||
Decrease in guarantee deposits | (358,845) | (11,671) | |||
Cash dividends | (9,765,242) | (6,913,765) | |||
Treasury stock acquired | (1,678,272) | (2,972,243) | |||
Treasury stock sold to employees | 1,677,900 | - | |||
Change in non-controlling interests | (567,188) | 1,538 | |||
Others | 2,120 | 7,312 | |||
Net cash used in financing activities | (22,448,834) | (151,140) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,203,221) | (286,607) | |||
Net increase in cash and cash equivalents | 3,346,602 | 3,095,873 | |||
Cash and cash equivalents at beginning of period | 95,492,477 | 83,661,739 | |||
Cash and cash equivalents at end of period | $98,839,079 | $86,757,612 | |||
Reconciliation of the balances of cash and cash equivalents at end of period: | |||||
Cash and cash equivalents balances on the consolidated balance sheets | $98,839,079 | $86,754,723 | |||
Cash and cash equivalents included in non-current assets held for sale | - | 2,889 | |||
Cash and cash equivalents at end of period | $98,839,079 | $86,757,612 | |||
The accompanying notes are an integral part of the consolidated financial statements.
|
9 |
UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Nine-Month Periods Ended September 30, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
1. | HISTORY AND ORGANIZATION |
United Microelectronics Corporation (UMC) was incorporated in Republic of China (R.O.C.) in May 1980 and commenced operations in April 1982. UMC is a full service semiconductor wafer foundry, and provides a variety of services to satisfy customer needs. UMC’s ordinary shares were publicly listed on the Taiwan Stock Exchange (TWSE) in July 1985 and its American Depositary Shares (ADSs) were listed on the New York Stock Exchange (NYSE) in September 2000.
The address of its registered office and principal place of business is No. 3, Li-Hsin Road II, Hsinchu Science Park, Hsinchu City, Taiwan. The principal operating activities of UMC and its subsidiaries (“the Company”) are described in Notes 4(3) and 14.
2. | DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE |
The consolidated financial statements of the Company were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on October 29, 2020.
3. | NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS |
(1) | The Company applied International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are endorsed by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2020. There were no newly adopted or revised standards and interpretations that have material impact on the Company’s financial position and performance. |
(2) | Standards issued by International Accounting Standards Board (“IASB”) but not yet endorsed by FSC (the effective dates are to be determined by FSC) are listed below: |
New, Revised or Amended Standards and Interpretations | Effective Date issued by IASB | |||
IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures | To be determined by IASB | |||
IFRS 17 “Insurance Contracts” | January 1, 2023 | |||
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current | January 1, 2023 | |||
Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 | January 1, 2022 | |||
Annual Improvements to IFRS Standards 2018 – 2020: | ||||
Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” | January 1, 2022 | |||
Amendments to IFRS 9 “Financial Instruments” | January 1, 2022 | |||
Amendments to IFRS 16 “Leases” | January 1, 2022 | |||
Amendments to IAS 41 “Agriculture” | January 1, 2022 | |||
Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) | January, 1 2021 |
10 |
The potential effects of adopting the standards or interpretations issued by IASB but not yet endorsed by FSC on the Company’s financial statements in future periods are summarized as below:
a. | IFRS 10 “Consolidated Financial Statements” (“IFRS 10”) and IAS 28 “Investments in Associates and Joint Ventures” - Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures (Amendment) (“IAS 28”) |
The amendments address the inconsistency between the requirements in IFRS 10 and IAS 28, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint venture. IFRS 10 requires full profit or loss recognition on the loss of control of a subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.
IFRS 10 was also amended so that the gain or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.
b. | IAS 1 “Presentation of Financial Statements” (“IAS 1”) - Classification of Liabilities as Current or Non-current (Amendment) |
These are the amendments to paragraphs 69-76 of IAS 1 presentation of financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.
11 |
c. | Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 |
i. | Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) |
The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.
ii. | Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) |
The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.
iii. | Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) |
The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
d. | Annual Improvements to IFRS Standards 2018 – 2020 |
i. | Amendment to IFRS 1 |
The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.
ii. | Amendment to IFRS 9 Financial Instruments |
The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.
iii. | Amendment to Illustrative Examples Accompanying IFRS 16 Leases |
The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.
12 |
e. Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
The final phase amendments mainly relate to the effects of the interest rate benchmark reform on the companies’ financial statements:
i. | A company will not have to derecognise or adjust the carrying amount of financial instruments for changes to contractual cash flows as required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate; |
ii. | A company will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and |
iii. | A company will be required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates. |
The Company is currently evaluating the potential impact of the aforementioned standards and interpretations listed (a) ~ (e) to the Company’s financial position and performance, and the related impact will be disclosed when the evaluation is completed.
4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(1) | Statement of Compliance |
The Company’s consolidated financial statements were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers (Regulations) and IAS 34 “Interim Financial Reporting” which is endorsed and become effective by FSC.
(2) | Basis of Preparation |
The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value.
(3) | General Description of Reporting Entity |
a. | Principles of consolidation |
The same principles of consolidation have been applied in the Company’s consolidated financial statements as those applied in the Company’s consolidated financial statements for the year ended December 31, 2019. For the principles of consolidation, please refer to Note 4(3) of the Company’s consolidated financial statements for the year ended December 31, 2019.
13 |
b. | The consolidated entities are as follows: |
As of September 30, 2020, December 31, 2019 and September 30, 2019
Percentage of ownership (%) As of | ||||||||||
Investor | Subsidiary | Business nature | September 30, 2020 | December 31, 2019 | September 30, 2019 | |||||
UMC | UMC GROUP (USA) | IC Sales | 100.00 | 100.00 | 100.00 | |||||
UMC | UNITED MICROELECTRONICS (EUROPE) B.V. | Marketing support activities | 100.00 | 100.00 | 100.00 | |||||
UMC | UMC CAPITAL CORP. | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | GREEN EARTH LIMITED (GE) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | TLC CAPITAL CO., LTD. (TLC) | Venture capital | 100.00 | 100.00 | 100.00 | |||||
UMC | UMC INVESTMENT (SAMOA) LIMITED | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | FORTUNE VENTURE CAPITAL CORP. (FORTUNE) | Consulting and planning for venture capital | 100.00 | 100.00 | 100.00 | |||||
UMC | UMC GROUP JAPAN | IC Sales | 100.00 | 100.00 | 100.00 | |||||
UMC | UMC KOREA CO., LTD. | Marketing support activities | 100.00 | 100.00 | 100.00 | |||||
UMC | OMNI GLOBAL LIMITED (OMNI) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | SINO PARAGON LIMITED | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | BEST ELITE INTERNATIONAL LIMITED (BE) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
UMC | UNITED SEMICONDUCTOR JAPAN CO., LTD. | Sales and manufacturing of integrated circuits | 100.00 | 100.00 | - | |||||
UMC, FORTUNE and TLC | NEXPOWER TECHNOLOGY CORP. (NEXPOWER) | Sales and manufacturing of solar power batteries | 93.36 | 93.36 | 93.36 | |||||
UMC and FORTUNE | WAVETEK MICROELECTRONICS CORPORATION (WAVETEK) | Sales and manufacturing of integrated circuits | 82.10 | 80.49 | 80.57 | |||||
UMC CAPITAL CORP. | UMC CAPITAL (USA) | Investment holding | - | 100.00 | 100.00 | |||||
TLC | SOARING CAPITAL CORP. | Investment holding | 100.00 | 100.00 | 100.00 | |||||
SOARING CAPITAL CORP. | UNITRUTH ADVISOR (SHANGHAI) CO., LTD. | Investment holding and advisory | 100.00 | 100.00 | 100.00 |
14 |
GE | UNITED MICROCHIP CORPORATION | Investment holding | 100.00 | 100.00 | 100.00 | |||||
FORTUNE | TERA ENERGY DEVELOPMENT CO., LTD. (TERA ENERGY) | Energy technical services | 100.00 | 100.00 | 100.00 | |||||
TERA ENERGY | EVERRICH ENERGY INVESTMENT (HK) LIMITED (EVERRICH-HK) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
EVERRICH-HK | EVERRICH (SHANDONG) ENERGY CO., LTD. | Solar engineering integrated design services | 100.00 | 100.00 | 100.00 | |||||
OMNI | UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) | Research and development | 100.00 | 100.00 | 100.00 | |||||
OMNI | UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) | Research and development | 100.00 | 100.00 | 100.00 | |||||
OMNI | ECP VITA PTE. LTD. | Insurance | 100.00 | 100.00 | 100.00 | |||||
OMNI | UMC TECHNOLOGY JAPAN CO., LTD. | Semiconductor manufacturing technology development and consulting services | 100.00 | 100.00 | 100.00 | |||||
WAVETEK | WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED (WAVETEK-SAMOA) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
WAVETEK- SAMOA | WAVETEK MICROELECTRONICS CORPORATION (USA) | Marketing service | 100.00 | 100.00 | 100.00 | |||||
NEXPOWER | SOCIALNEX ITALIA 1 S.R.L. | Photovoltaic power plant | - | - | 100.00 | |||||
BE | INFOSHINE TECHNOLOGY LIMITED (INFOSHINE) | Investment holding | 100.00 | 100.00 | 100.00 |
15 |
INFOSHINE | OAKWOOD ASSOCIATES LIMITED (OAKWOOD) | Investment holding | 100.00 | 100.00 | 100.00 | |||||
OAKWOOD | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. (HEJIAN) | Sales and manufacturing of integrated circuits | 99.9985 | 98.14 | 98.14 | |||||
HEJIAN | UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. | Integrated circuits design services | 100.00 | 100.00 | 100.00 | |||||
UNITED MICROCHIP CORPORATION and HEJIAN | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Sales and manufacturing of integrated circuits | 65.22 | 65.22 | 65.22 |
(4) | Other Significant Accounting Policies |
Apart from the accounting policies which are described below, the same accounting policies of consolidation have been applied in the Company’s consolidated financial statements as those applied in the Company’s consolidated financial statements for the year ended December 31, 2019. For the summary of significant accounting policies, please refer to Note 4 of the Company’s consolidated financial statements for the year ended December 31, 2019.
Share-Based Payment Transactions
A. | Equity-settled share-based payment transactions |
The compensation cost of equity-settled transactions between the Company and its employees is measured at the fair value of the equity instruments on the grant date, and is recognized as expense, together with a corresponding increase in equity, over the vesting period. When issuing restricted stocks for employees, the unvested restricted stocks issued on the grant date for employees are recognized in unearned employee compensation as a transitional contra equity account and such account shall be amortized as compensation expense over the vesting period. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has passed and the Company’s best estimate of the quantity of equity instruments that will ultimately vest. The movement in cumulative cost recognized at the beginning and end of the period is recognized through profit or loss for the period.
16 |
No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition. The Company shall recognize the services received in expense irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it fully vests on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award substitutes for the cancelled award and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award.
B. | Cash-settled share-based payment transactions |
The compensation cost of cash-settled share-based payment transactions between the Company and its employees is measured at the fair value of the liability incurred and recognized as expense with corresponding liability over the vesting period. The fair value of the liability is remeasured at the end of each reporting period and at the settlement date with the movement in fair value recognized through profit or loss for the period until the liability is settled.
5. | SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS |
17 |
The same significant accounting judgments, estimates and assumptions have been applied in the Company’s consolidated financial statements for the nine-month period ended September 30, 2020 as those applied in the Company’s consolidated financial statements for the year ended December 31, 2019. For significant accounting judgments, estimates and assumptions, please refer to Note 5 of the Company’s consolidated financial statements for the year ended December 31, 2019.
6. | CONTENTS OF SIGNIFICANT ACCOUNTS |
(1) | Cash and Cash Equivalents |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Cash on hand and petty cash | $5,776 | $6,074 | $6,077 | |||
Checking and savings accounts | 22,749,618 | 26,384,925 | 22,569,474 | |||
Time deposits | 66,620,686 | 59,966,481 | 56,559,325 | |||
Repurchase agreements collateralized by government bonds and corporate notes | 9,462,999 | 9,134,997 | 7,619,847 | |||
Total | $98,839,079 | $95,492,477 | $86,754,723 |
(2) | Financial Assets at Fair Value through Profit or Loss |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Financial assets mandatorily measured at fair value through profit or loss | ||||||
Common stocks | $8,377,086 | $8,381,085 | $7,644,515 | |||
Preferred stocks | 3,399,163 | 3,299,419 | 3,124,450 | |||
Funds | 2,316,450 | 2,195,524 | 2,132,078 | |||
Convertible bonds | 353,470 | 145,445 | 118,129 | |||
Forward contracts | 1,345 | - | - | |||
Option | - | - | - | |||
Total | $14,447,514 | $14,021,473 | $13,019,172 | |||
Current | $916,078 | $722,794 | $633,940 | |||
Noncurrent | 13,531,436 | 13,298,679 | 12,385,232 | |||
Total | $14,447,514 | $14,021,473 | $13,019,172 |
18 |
The Company had a call option of a joint venture agreement between FUJITSU SEMICONDUCTOR LIMITED (FSL) and UMC, which was measured at fair value and the change in the fair value was recorded in profit or loss. On June 29, 2018, the Board of Directors of UMC resolved to exercise the call option and completed the acquisition on October 1, 2019. Please refer to Note 6(27).
(3) | Accounts Receivable, Net |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Accounts receivable | $26,817,475 | $26,136,293 | $23,799,310 | |||
Less: loss allowance | (232,779) | (697,590) | (604,844) | |||
Net | $26,584,696 | $25,438,703 | $23,194,466 |
Aging analysis of accounts receivable, net: |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Neither past due nor impaired | $23,717,248 | $21,924,797 | $19,101,555 | |||
Past due but not impaired: | ||||||
≤ 30 days | 2,088,082 | 2,364,311 | 2,829,566 | |||
31 to 60 days | 268,977 | 204,791 | 468,482 | |||
61 to 90 days | 1,958 | 85,131 | 17,162 | |||
91 to 120 days | 29,108 | 138,788 | 67,601 | |||
≥ 121 days | 479,323 | 720,885 | 710,100 | |||
Subtotal | 2,867,448 | 3,513,906 | 4,092,911 | |||
Total | $26,584,696 | $25,438,703 | $23,194,466 |
Movement of loss allowance for accounts receivable:
19 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Beginning balance | $697,590 | $48,152 | ||
Net charge for the period | (464,811) | 556,692 | ||
Ending balance | $232,779 | $604,844 |
The collection periods for third party domestic sales and third party overseas sales were month-end 30~60 days and net 30~60 days, respectively.
An impairment analysis is performed at each reporting date to measure expected credit losses (ECLs) of accounts receivable. For receivable past due within 60 days, including not past due, the Company estimates a provision rate to calculate ECLs. A provision rate is determined based on the Company’s historical expected and actual credit losses and customers’ current financial condition, adjusted for forward-looking factors, such as customers’ economic environment. For the receivable past due over 60 days, the Company applies the aforementioned provision rate and also individually assesses whether to recognize additional expected credit losses by considering customer’s operating situation and debt-paying ability.
(4) | Inventories, Net |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Raw materials | $5,789,390 | $5,102,571 | $4,676,822 | |||
Supplies and spare parts | 4,409,770 | 3,548,376 | 3,428,477 | |||
Work in process | 11,611,815 | 11,309,718 | 10,718,020 | |||
Finished goods | 1,052,435 | 1,754,137 | 1,166,430 | |||
Total | $22,863,410 | $21,714,802 | $19,989,749 |
a. | For the three-month periods ended September 30, 2020 and 2019, the Company recognized NT$33,882 million and NT$30,287 million, respectively, in operating cost, of which NT$22 million was related to reversal of write-down of inventories and NT$162 million was related to write-down of inventories. For the nine-month periods ended September 30, 2020 and 2019, the Company recognized NT$100,025 million and NT$89,185 million, respectively, in operating cost, of which NT$249 million was related to reversal of write-down of inventories and NT$245 million was related to write-down of inventories. |
20 |
b. | None of the aforementioned inventories were pledged. |
(5) | Financial Assets at Fair Value through Other Comprehensive Income, Non-Current |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Equity instruments | ||||||
Common stocks | $7,844,826 | $14,547,738 | $16,053,143 | |||
Preferred stocks | 112,439 | 175,494 | 174,250 | |||
Total | $7,957,265 | $14,723,232 | $16,227,393 |
a. | These investments in equity instruments are held for medium to long-term purposes and therefore are accounted for as fair value through other comprehensive income. |
b. | Dividend income recognized in profit or loss from equity instruments designated as fair value through other comprehensive income were listed below: |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Held at end of period | $286,795 | $365,052 | ||
Derecognized during the period | - | - | ||
Total | $286,795 | $365,052 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Held at end of period | $286,795 | $365,052 | ||
Derecognized during the period | - | - | ||
Total | $286,795 | $365,052 |
c. | In consideration of the Company’s investment strategy, the Company disposed and derecognized certain investments designated as fair value through other comprehensive income. Details on derecognition of such investments for the nine-month periods ended September 30, 2020 and 2019 are as follow: |
21 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Fair value on the date of disposal | $9,012,450 | $44,466 | ||
Cumulative gains (losses) reclassified to retained earnings due to derecognition | $1,825,365 | $(176,898) |
Please refer to Note 6 (6) for details on cumulative gains reclassified to retained earnings due to derecognition.
(6) | Investments Accounted for Under the Equity Method |
a. | Details of investments accounted for under the equity method are as follows: |
As of | ||||||||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||
Investee companies | Amount | Percentage of ownership or voting rights | Amount | Percentage of ownership or voting rights | Amount | Percentage of ownership or voting rights | ||||||
Listed companies | ||||||||||||
FARADAY TECHNOLOGY CORP. (FARADAY) (Note A) | $1,500,343 | 13.78 | $1,470,499 | 13.78 | $1,453,030 | 13.78 | ||||||
UNIMICRON TECHNOLOGY CORP. (UNIMICRON) (Note B) | 8,843,183 | 13.37 | - | - | - | - | ||||||
CLIENTRON CORP. (CLIENTRON) (Note C) | - | - | 276,866 | 21.90 | 268,224 | 22.39 | ||||||
Unlisted companies | ||||||||||||
MTIC HOLDINGS PTE. LTD. | 8,669 | 45.44 | 18,157 | 45.44 | 2,122 | 45.44 | ||||||
WINAICO IMMOBILIEN GMBH (Note D) | - | 44.78 | - | 44.78 | - | 44.78 | ||||||
PURIUMFIL INC. | 7,441 | 44.45 | 7,164 | 44.45 | 8,923 | 44.45 | ||||||
UNITECH CAPITAL INC. | 741,353 | 42.00 | 642,660 | 42.00 | 604,957 | 42.00 | ||||||
TRIKNIGHT CAPITAL CORPORATION | 2,256,411 | 40.00 | 2,281,631 | 40.00 | 1,543,533 | 40.00 | ||||||
HSUN CHIEH CAPITAL CORP. | 185,749 | 40.00 | 122,060 | 30.00 | 142,593 | 30.00 | ||||||
HSUN CHIEH INVESTMENT CO., LTD. | 6,917,663 | 36.49 | 4,378,193 | 36.49 | 3,809,622 | 36.49 | ||||||
YANN YUAN INVESTMENT CO., LTD. | 4,706,077 | 30.87 | 3,829,934 | 30.87 | 3,562,799 | 30.87 | ||||||
UNITED LED CORPORATION HONG KONG LIMITED | $98,515 | 25.14 | $121,973 | 25.14 | $133,151 | 25.14 | ||||||
VSENSE CO., LTD. | 4,682 | 24.39 | 592 | 25.90 | 26,131 | 26.89 | ||||||
TRANSLINK CAPITAL PARTNERS I, L.P. (Note E) | 175,470 | 10.38 | 172,414 | 10.38 | 170,279 | 10.38 | ||||||
Total | $25,445,556 | $13,322,143 | $11,725,364 |
22 |
Note A: Beginning from June 2015, the Company accounts for its investment in FARADAY as an associate given the fact that the Company obtained the ability to exercise significant influence over FARADAY through representation on its Board of Directors.
Note B: Beginning from June 2020, the Company accounts for its investment in UNIMICRON as an associate given the fact that the Company obtained the ability to exercise significant influence over UNIMICRON through representation on its Board of Directors. UNIMICRON was previously measured at fair value through other comprehensive income and reclassified as investments accounted for under the equity method. Cumulative fair changes that was previously recognized in other comprehensive income up to reclassification date was reclassified to retained earnings in the current period.
Note C: In April 2020, the Company disposed of the ownership of shares of CLIENTRON and reclassified the investment as financial assets at fair value through profit or loss due to loss of significant influence over it.
23 |
Note D: WINAICO IMMOBILIEN GMBH is a joint venture to the Company.
Note E: The Company follows international accounting practices in equity accounting for limited partnerships and uses the equity method to account for these investees.
The carrying amount of investments accounted for using the equity method for which there are published price quotations amounted to NT$10,344 million, NT$1,747 million and NT$1,721 million, as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively. The fair value of these investments were NT$16,094 million, NT$2,244 million and NT$2,207 million, as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
Certain investments accounted for under the equity method were reviewed by other independent accountants. Shares of profit or loss of these associates and joint ventures amounted to NT$2,788 million, NT$77 million, NT$2,851 million and NT$560 million for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively. Share of other comprehensive income (loss) of these associates and joint ventures amounted to NT$850 million, NT$326 million, NT$809 million and NT$869 million for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively. The balances of investments accounted for under the equity method were NT$23,465 million, NT$11,704 million and NT$9,789 million as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
Although the Company is the first major shareholder of some associates; after comprehensive assessment, the Company does not own the major voting rights as the remaining voting rights holders are able to align and prevent the Company from ruling the relevant operation. Therefore, the Company does not control but owns significant influence over the aforementioned associates.
24 |
None of the aforementioned associates and joint ventures were pledged.
b. | Financial information of associates and joint ventures: |
There is no individually significant associate or joint venture for the Company. When an associate or a joint venture is a foreign operation, and the functional currency of the foreign entity is different from the Company, an exchange difference arising from translation of the foreign entity will be recognized in other comprehensive income (loss). Such exchange differences recognized in other comprehensive income (loss) in the financial statements for the three-month and nine-month periods ended September 30, 2020 and 2019 were NT$(13) million, NT$2 million, NT$(25) million and NT$34 million, respectively, which were not included in the following table.
i. | The aggregate amount of the Company’s share of its associates that are accounted for using the equity method was as follows: |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Income (loss) from continuing operations | $2,778,475 | $108,905 | ||
Other comprehensive income (loss) | 960,783 | 324,412 | ||
Total comprehensive income (loss) | $3,739,258 | $433,317 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Income (loss) from continuing operations | $2,845,848 | $505,913 | ||
Other comprehensive income (loss) | 922,444 | 875,054 | ||
Total comprehensive income (loss) | $3,768,292 | $1,380,967 |
ii. | The aggregate amount of the Company’s share of its joint ventures that are accounted for using the equity method were both nil for the three-month and nine-month periods ended September 30, 2020 and 2019. |
c. | One of UMC’s associates, HSUN CHIEH INVESTMENT CO., LTD., held 441 million shares of UMC’s stock as of September 30, 2020, December 31, 2019 and September 30, 2019 respectively. Another associate, YANN YUAN INVESTMENT CO., LTD., held 201 million, 200 million and 200 million shares of UMC’s stock as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively. |
(7) | Other current assets |
25 |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Time deposits over three months to a year | $9,878,188 | $2,353,066 | $2,227,182 | |||
Costs to fulfill a contract | 852,222 | 559,809 | 648,280 | |||
Others | 73,121 | - | 15,558,990 | |||
Total | $10,803,531 | $2,912,875 | $18,434,452 |
On October 1, 2019, the Company acquired remaining shares of MIE FUJITSU SEMICONDUCTOR LIMITED (MIFS) in a total of JPY 54.4 billion, and the bank deposits for this acquisition were accounted for as other current assets as of September 30, 2019 due to restricted use.
(8) | Property, Plant and Equipment |
For the nine-month period ended September 30, 2020:
a. | Assets Used by the Company: |
Cost:
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||
As of January 1, 2020 | $1,692,123 | $38,437,588 | $865,547,572 | $65,909 | $6,842,124 | $65,883 | $5,583,516 | $918,234,715 | ||||||||
Additions | - | - | - | - | - | - | 17,111,041 | 17,111,041 | ||||||||
Disposals | - | (1,316,833) | (4,320,496) | (10,770) | (168,241) | - | (12,938) | (5,829,278) | ||||||||
Transfers and reclassifications | - | 80,819 | 9,665,359 | - | 208,192 | 94 | (8,704,173) | 1,250,291 | ||||||||
Exchange effect | (3,623) | (132,321) | (5,205,327) | (310) | (21,697) | (1,420) | (58,356) | (5,423,054) | ||||||||
As of September 30, 2020 | $1,688,500 | $37,069,253 | $865,687,108 | $54,829 | $6,860,378 | $64,557 | $13,919,090 | $925,343,715 |
26 |
Accumulated Depreciation and Impairment:
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||
As of January 1, 2020 | $- | $18,950,520 | $745,722,965 | $47,794 | $5,383,434 | $46,147 | $- | $770,150,860 | ||||||||
Depreciation | - | 1,285,114 | 32,572,131 | 4,016 | 383,160 | 5,906 | - | 34,250,327 | ||||||||
Disposals | - | (788,342) | (4,318,727) | (10,326) | (168,206) | - | - | (5,285,601) | ||||||||
Transfers and reclassifications | - | - | - | - | 1,915 | (1,915) | - | - | ||||||||
Exchange effect | - | (11,665) | (4,321,047) | (124) | (15,191) | (1,369) | - | (4,349,396) | ||||||||
As of September 30, 2020 | $- | $19,435,627 | $769,655,322 | $41,360 | $5,585,112 | $48,769 | $- | $794,766,190 | ||||||||
Net carrying amount: | ||||||||||||||||
As of September 30, 2020 | $1,688,500 | $17,633,626 | $96,031,786 | $13,469 | $1,275,266 | $15,788 | $13,919,090 | $130,577,525 |
b. | Assets Subject to Operating Leases: |
Cost: |
Land | Buildings | Machinery and equipment | Furniture and fixtures | Total | ||||||
As of January 1, 2020 | $459,635 | $2,637,271 | $125,413 | $1,315,180 | $4,537,499 | |||||
Disposals | - | (179,132) | - | - | (179,132) | |||||
Exchange effect | (30) | (8,065) | - | (3,236) | (11,331) | |||||
As of September 30, 2020 | $459,605 | $2,450,074 | $125,413 | $1,311,944 | $4,347,036 |
Accumulated Depreciation and Impairment:
Land | Buildings | Machinery and equipment | Furniture and fixtures | Total | ||||||
As of January 1, 2020 | $- | $1,019,036 | $125,413 | $1,102,809 | $2,247,258 | |||||
Depreciation | - | 76,514 | - | 51,980 | 128,494 | |||||
Disposals | - | (107,240) | - | - | (107,240) | |||||
Exchange effect | - | (3,932) | - | (2,152) | (6,084) | |||||
As of September 30, 2020 | $- | $984,378 | $125,413 | $1,152,637 | $2,262,428 | |||||
Net carrying amount: | ||||||||||
As of September 30, 2020 | $459,605 | $1,465,696 | $- | $159,307 | $2,084,608 |
27 |
In order to improve operations, reduce fixed costs and obtain the funds required for the company future operation, the subsidiary of new business segment (NEXPOWER) disposed of the building and its facility equipment located in Taichung City in accordance with a resolution of the Board of Directors’ meeting. Therefore, it was reclassified as non-current assets held for sale in the second quarter of 2020. The Company completed the disposal in the third quarter of 2020 and recorded in the other operating income and expenses a disposal gain of NT$1,081 million.
For the nine-month period ended September 30, 2019:
a. | Assets Used by the Company: |
Cost: |
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||
As of January 1, 2019 | $861,487 | $35,681,733 | $853,481,220 | $66,355 | $6,736,916 | $53,449 | $10,550,763 | $907,431,923 | ||||||||
Additions | - | - | - | - | - | - | 11,547,114 | 11,547,114 | ||||||||
Disposals | - | (420) | (1,417,819) | (3,576) | (15,680) | (1,128) | (21,717) | (1,460,340) | ||||||||
Transfers and reclassifications | - | 88,067 | 15,323,678 | 3,557 | 236,450 | 9,647 | (14,976,976) | 684,423 | ||||||||
Exchange effect | - | (188,323) | (1,070,114) | (163) | (15,987) | 214 | (4,336) | (1,278,709) | ||||||||
As of September 30, 2019 | $861,487 | $35,581,057 | $866,316,965 | $66,173 | $6,941,699 | $62,182 | $7,094,848 | $916,924,411 |
28 |
Accumulated Depreciation and Impairment:
Land | Buildings | Machinery and equipment | Transportation equipment | Furniture and fixtures | Leasehold improvement | Construction in progress and equipment awaiting inspection | Total | |||||||||
As of January 1, 2019 | $- | $17,549,256 | $714,286,307 | $45,434 | $5,112,684 | $49,580 | $5,949 | $737,049,210 | ||||||||
Depreciation | - | 1,100,476 | 33,091,274 | 4,572 | 362,180 | 1,561 | - | 34,560,063 | ||||||||
Impairment loss | - | - | 85,202 | - | - | - | - | 85,202 | ||||||||
Disposals | - | (407) | (1,416,170) | (3,576) | (15,473) | (1,128) | - | (1,436,754) | ||||||||
Transfers and reclassifications | - | - | (64,601) | - | (428) | - | - | (65,029) | ||||||||
Exchange effect | - | (26,550) | 127,068 | (91) | (5,951) | 221 | - | 94,697 | ||||||||
As of September 30, 2019 | $- | $18,622,775 | $746,109,080 | $46,339 | $5,453,012 | $50,234 | $5,949 | $770,287,389 | ||||||||
Net carrying amount: | ||||||||||||||||
As of September 30, 2019 | $861,487 | $16,958,282 | $120,207,885 | $19,834 | $1,488,687 | $11,948 | $7,088,899 | $146,637,022 |
b. | Assets Subject to Operating Leases: |
Cost:
Land | Buildings | Machinery and equipment | Furniture and fixtures | Total | ||||||
As of January 1, 2019 | $452,915 | $2,624,569 | $207,285 | $1,319,985 | $4,604,754 | |||||
Disposals | - | (623) | - | (237) | (860) | |||||
Transfers and reclassifications | - | - | (81,872) | 2,847 | (79,025) | |||||
Exchange effect | - | (2,083) | - | (4,984) | (7,067) | |||||
As of September 30, 2019 | $452,915 | $2,621,863 | $125,413 | $1,317,611 | $4,517,802 |
Accumulated Depreciation and Impairment:
Land | Buildings | Machinery and equipment | Furniture and fixtures | Total | ||||||
As of January 1, 2019 | $- | $915,988 | $188,881 | $1,036,003 | $2,140,872 | |||||
Depreciation | - | 79,463 | 3,827 | 53,292 | 136,582 | |||||
Disposals | - | (333) | - | (237) | (570) | |||||
Transfers and reclassifications | - | - | (67,295) | 10 | (67,285) | |||||
Exchange effect | - | 690 | - | (1,798) | (1,108) | |||||
As of September 30, 2019 | $- | $995,808 | $125,413 | $1,087,270 | $2,208,491 | |||||
Net carrying amount: | ||||||||||
As of September 30, 2019 | $452,915 | $1,626,055 | $- | $230,341 | $2,309,311 |
29 |
In the second quarter of 2019, the Company reclassified SOCIALNEX ITALIA 1 S.R.L (SOCIALNEX), a subsidiary, as a disposal group held for sale. As such, the Company performed an impairment test on the cash-generating unit (CGU) composed of property, plant and equipment before reclassifying the CGU as a single disposal group held for sale. The Company, determined the recoverable amount of the CGU based on the net selling price which was categorized to Level 3 and the impairment test revealed the recoverable amount of the CGU to be less than its carrying amount. Thus, the Company recorded in the other operating income and expenses an impairment loss of NT$85 million for the nine-month period ended September 30, 2019, on the CGU to be disposed of from the new business segment. The Company disposed SOCIALNEX in November 2019.
Please refer to Note 8 for property, plant and equipment pledged as collateral.
(9) | Leases |
The Company leases various properties, such as land (including land use right), buildings, machinery and equipment, transportation equipment and other equipment with lease terms of 1 to 30 years, except for the land use rights with lease term of 50 years. Most lease contracts of land located in R.O.C state that lease payments will be adjusted based on the announced land value. The Company does not have purchase options of leased land at the end of the lease terms.
a. | The Company as a lessee |
(a) | Right-of-use Assets |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Land (including land use right) | $5,192,719 | $5,700,136 | $5,832,299 | |||
Buildings | 376,874 | 473,558 | 434,357 | |||
Machinery and equipment | 2,309,962 | 2,092,924 | 1,785,529 | |||
Transportation equipment | 9,842 | 12,019 | 8,477 | |||
Other equipment | 11,791 | 12,880 | 13,375 | |||
Net | $7,901,188 | $8,291,517 | $8,074,037 |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Depreciation | ||||
Land (including land use right) | $86,892 | $90,533 | ||
Buildings | 29,704 | 22,797 | ||
Machinery and equipment | 55,246 | 40,558 | ||
Transportation equipment | 2,058 | 1,388 | ||
Other equipment | 1,167 | 1,011 | ||
Total | $175,067 | $156,287 |
30 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Depreciation | ||||
Land (including land use right) | $251,246 | $277,268 | ||
Buildings | 89,999 | 57,562 | ||
Machinery and equipment | 167,476 | 123,074 | ||
Transportation equipment | 6,228 | 4,178 | ||
Other equipment | 3,458 | 2,965 | ||
Total | $518,407 | $465,047 |
i. | For the nine-month periods ended September 30, 2020 and 2019, the Company’s addition to right-of-use assets amounted to NT$564 million and NT$260 million, respectively. |
ii. | Please refer to Note 8 for right-of-use assets pledged as collateral. |
(b) | Lease Liabilities |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Current | $552,145 | $569,957 | $467,610 | |||
Noncurrent | 5,183,579 | 5,461,068 | 5,258,281 | |||
Total | $5,735,724 | $6,031,025 | $5,725,891 |
Please refer to Note 6(22) for the interest expenses on the lease liabilities.
b. | The Company as a lessor |
The Company entered into leases on certain property, plant and equipment which are classified as operating leases as they did not transfer substantially all of the risks and rewards incidental to ownership of the underlying assets. The main contracts are to lease the dormitory to the employees with cancellation clauses. Please refer to Note 6(8) for relevant disclosure of property, plant and equipment for operating leases.
31 |
(10) | Intangible Assets |
For the nine-month period ended September 30, 2020:
Cost:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||
As of January 1, 2020 | $15,012 | $3,347,148 | $4,183,505 | $3,548,006 | $11,093,671 | |||||
Additions | - | 1,085,925 | 212,229 | 506,894 | 1,805,048 | |||||
Write-off | - | (236,828) | (11,023) | (807,989) | (1,055,840) | |||||
Reclassifications | - | (8,886) | - | - | (8,886) | |||||
Exchange effect | - | 22,531 | (103,635) | 2,566 | (78,538) | |||||
As of September 30, 2020 | $15,012 | $4,209,890 | $4,281,076 | $3,249,477 | $11,755,455 |
Accumulated Amortization and Impairment:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||
As of January 1, 2020 | $7,398 | $951,176 | $2,299,223 | $2,637,627 | $5,895,424 | |||||
Amortization | - | 1,009,736 | 401,757 | 580,249 | 1,991,742 | |||||
Write-off | - | (236,828) | (11,023) | (807,989) | (1,055,840) | |||||
Exchange effect | - | 24,935 | (55,169) | 2,327 | (27,907) | |||||
As of September 30, 2020 | $7,398 | $1,749,019 | $2,634,788 | $2,412,214 | $6,803,419 | |||||
Net carrying amount: As of September 30, 2020 | $7,614 | $2,460,871 | $1,646,288 | $837,263 | $4,952,036 |
For the nine-month period ended September 30, 2019:
Cost:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||
As of January 1, 2019 | $15,012 | $1,125,804 | $4,511,629 | $3,190,116 | $8,842,561 | |||||
Additions | - | 1,378,215 | 293,654 | 524,351 | 2,196,220 | |||||
Write-off | - | (205,958) | (953,128) | (355,232) | (1,514,318) | |||||
Reclassifications | - | 54,212 | - | (97) | 54,115 | |||||
Exchange effect | - | (14,874) | (261,634) | (0) | (276,508) | |||||
As of September 30, 2019 | $15,012 | $2,337,399 | $3,590,521 | $3,359,138 | $9,302,070 |
32 |
Accumulated Amortization and Impairment:
Goodwill | Software | Patents and technology license fees | Others | Total | ||||||
As of January 1, 2019 | $- | $601,649 | $2,843,411 | $2,405,697 | $5,850,757 | |||||
Amortization | - | 428,514 | 359,303 | 624,127 | 1,411,944 | |||||
Write-off | - | (205,958) | (953,128) | (355,232) | (1,514,318) | |||||
Reclassifications | - | 418 | - | (97) | 321 | |||||
Exchange effect | - | (10,397) | (79,140) | (0) | (89,537) | |||||
As of September 30, 2019 | $- | $814,226 | $2,170,446 | $2,674,495 | $5,659,167 | |||||
Net carrying amount: As of September 30, 2019 | $15,012 | $1,523,173 | $1,420,075 | $684,643 | $3,642,903 |
The amortization amounts of intangible assets are as follows:
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Operating costs | $220,815 | $166,246 | ||
Operating expenses | $464,580 | $342,799 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Operating costs | $657,448 | $554,773 | ||
Operating expenses | $1,334,294 | $857,171 |
(11) | Short-Term Loans |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Unsecured bank loans | $7,571,645 | $8,080,200 | $7,916,303 | |||
Unsecured other loans | - | 3,935,006 | 8,566,653 | |||
Total | $7,571,645 | $12,015,206 | $16,482,956 |
33 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Interest rates applied | 0.00%~4.05% | 0.00%~4.55% |
The Company’s unused short-term lines of credit amounted to NT$59,958 million, NT$64,169 million and NT$66,682 million as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
(12) | Bonds Payable |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Unsecured domestic bonds payable | $18,700,000 | $21,200,000 | $21,200,000 | |||
Unsecured convertible bonds payable | - | 17,729,293 | 18,196,332 | |||
Less: Discounts on bonds payable | (10,314) | (147,877) | (243,604) | |||
Total | 18,689,686 | 38,781,416 | 39,152,728 | |||
Less: Current portion | (1,999,856) | (20,093,825) | (20,465,835) | |||
Net | $16,689,830 | $18,687,591 | $18,686,893 |
a. | UMC issued domestic unsecured corporate bonds. The terms and conditions of the bonds were as follows: |
Term | Issuance date | Issued amount | Coupon rate | Repayment | ||||
Seven-year | In mid-March 2013 | NT$2,500 million | 1.50% | Interest was paid annually and the principal was fully repaid in March 2020. | ||||
Seven-year | In mid-June 2014 | NT$2,000 million | 1.70% | Interest will be paid annually and the principal will be repayable in June 2021 upon maturity. | ||||
Ten-year | In mid-June 2014 | NT$3,000 million | 1.95% | Interest will be paid annually and the principal will be repayable in June 2024 upon maturity. | ||||
Five-year | In late March 2017 | NT$6,200 million | 1.15% | Interest will be paid annually and the principal will be repayable in March 2022 upon maturity. | ||||
Seven-year | In late March 2017 | NT$2,100 million | 1.43% | Interest will be paid annually and the principal will be repayable in March 2024 upon maturity. | ||||
Five-year | In early October 2017 | NT$2,000 million | 0.94% | Interest will be paid annually and the principal will be repayable in October 2022 upon maturity. | ||||
Seven-year | In early October 2017 | NT$3,400 million | 1.13% | Interest will be paid annually and the principal will be repayable in October 2024 upon maturity. |
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b. | On May 18, 2015, UMC issued SGX-ST listed currency linked zero coupon convertible bonds. In accordance with IAS 32 “Financial Instruments Presentation”, the value of the conversion right of the convertible bonds was determined at issuance and recognized in additional paid-in capital-stock options amounting to NT$1,894 million, after reduction of issuance costs amounting to NT$9 million. The effective interest rate on the liability component of the convertible bonds was determined to be 2.03%. The terms and conditions of the bonds were as follows: |
i. | Issue Amount: US$600 million |
ii. | Period: May 18, 2015 ~ May 18, 2020 (Maturity date) |
iii. | Redemption: |
(i) | UMC may redeem the bonds, in whole or in part, after 3 years of the issuance and prior to the maturity date, at the principal amount of the bonds with an interest calculated at the rate of -0.25% per annum (the Early Redemption Amount) if the closing price of the ordinary shares of UMC on the TWSE, for a period of 20 out of 30 consecutive trading days, the last of which occurs not more than 5 days prior to the date upon which notice of such redemption is published, is at least 125% of the conversion price. The Early Redemption Price will be converted into NTD based on the Fixed Exchange Rate (NTD 30.708=USD 1.00), and this fixed NTD amount will be converted using the prevailing rate at the time of redemption for payment in USD. |
(ii) | UMC may redeem the bonds, in whole, but not in part, at the Early Redemption Amount if at least 90% in principal amount of the bonds has already been converted, redeemed or repurchased and cancelled. |
(iii) | UMC may redeem all, but not part, of the bonds, at the Early Redemption Amount at any time, in the event of certain changes in the R.O.C.’s tax rules which would require UMC to gross up for payments of principal, or to gross up for payments of interest or premium. |
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(iv) | All or any portion of the bonds will be redeemable at Early Redemption Amount at the option of bondholders on May 18, 2018 at 99.25% of the principal amount. |
(v) | Bondholders have the right to require UMC to redeem all of the bonds at the Early Redemption Amount if UMC’s ordinary shares cease to be listed on the Taiwan Stock Exchange. |
(vi) | In the event that a change of control as defined in the indenture of the bonds occurs to UMC, the bondholders shall have the right to require UMC to redeem the bonds, in whole but not in part, at the Early Redemption Amount. |
iv. | Terms of Conversion: |
(i) | Underlying Securities: Ordinary shares of UMC |
(ii) | Conversion Period: The bonds are convertible at any time on or after June 28, 2015 and prior to May 8, 2020, into UMC ordinary shares; provided, however, that if the exercise date falls within 5 business days from the beginning of, and during, any closed period, the right of the converting holder of the bonds to vote with respect to the shares it receives will be subject to certain restrictions. |
(iii) | Conversion Price and Adjustment: The conversion price was originally NT$17.50 per share. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture. |
v. | Conversion of Bonds: |
The last conversion date of the bonds was on March 31, 2020. For the nine-month periods ended September 30, 2020 and 2019, the outstanding principal amount of the convertible bonds totaling US$215 million and nil had been converted into 465 million shares and nil, respectively.
Upon the maturity date of May 18, 2020, UMC fully redeemed the remaining unconverted bonds at 98.76% of the principal amount. The principal amount of redemption amounted to US$369 million. UMC reclassified cancelled convertible rights of NT$1,166 million from additional paid in capital-stock options to additional paid in capital-others.
(13) | Long-Term Loans |
a. | Details of long-term loans as of September 30, 2020, December 31, 2019 and September 30, 2019 are as follows: |
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As of | ||||||||
Lenders | September 30, 2020 | December 31, 2019 | September 30, 2019 | Redemption | ||||
Secured Long-Term Loan from Mega International Commercial Bank (1) | $2,187 | $3,827 | $4,373 | Effective July 3, 2017 to July 5, 2021. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Mega International Commercial Bank (2) | 20,680 | 10,380 | - | Effective October 24, 2019 to October 24, 2024. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (1) | - | 1,288 | 1,718 | Effective August 10, 2015 to August 10, 2020. Interest-only payment for the first year. Principal is repaid in 17 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (2) | 62,432 | 71,351 | 74,324 | Effective October 19, 2015 to October 19, 2025. Interest-only payment for the first year. Principal is repaid in 37 quarterly payments with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (3) | 24,062 | 29,896 | 32,813 | Repayable monthly from May 31, 2019 to May 31, 2023 with monthly interest payments. | ||||
Secured Long-Term Loan from Taiwan Cooperative Bank (4) | 59,000 | - | - | Repayable monthly from September 13, 2020 to August 13, 2025 with monthly interest payments. | ||||
Secured Syndicated Loans from China Development Bank and 6 others | 24,263,169 | 26,892,457 | 28,189,159 | Effective October 20, 2016 to October 20, 2024. Interest-only payment for the first and the second year. Principal is repaid in 13 semi-annual payments with semi-annual interest payments. | ||||
Unsecured Long-Term Loan from CTBC Bank | - | 747,900 | 747,900 | Settlement beforehand on September 28, 2020 with monthly interest payments. | ||||
Unsecured Long-Term Loan from ICBC Bank | 1,660,847 | 1,744,975 | 1,759,831 | Repayable semi-annually from March 10, 2020 to September 9, 2021 with quarterly interest payments. | ||||
Unsecured Long-Term Loan from Bank of Taiwan | 2,000,000 | - | - | Effective March 10, 2022 to December 10, 2024. Principal is repaid in 12 quarterly payments with monthly interest payments. | ||||
Unsecured Long-Term Loan from Taiwan Cooperative Bank | 3,000,000 | - | - | Effective May 5, 2023 to May 5, 2025. Principal is repaid in 9 quarterly payments with monthly interest payments. | ||||
Unsecured Revolving Loan from HSBC (Taiwan) Bank (Note A) | - | - | 2,030,000 | Settlement beforehand on October 28, 2019 with monthly interest payments. | ||||
Unsecured Revolving Loan from CTBC Bank (Note B) | - | - | 2,436,000 | Settlement beforehand on December 27, 2019 with monthly interest payments. | ||||
Unsecured Revolving Loan from Taipei Fubon Bank (Note C) | 1,500,000 | - | - | Repayable annually from August 9, 2021 to August 9, 2023 with monthly interest payments. | ||||
Unsecured Revolving Loan from Mega International Commercial Bank (Note D) | 2,000,000 | 2,000,000 | 2,000,000 | Repayable semi-annually from October 16, 2020 to April 16, 2022 with monthly interest payments. | ||||
Unsecured Revolving Loan from Chang Hwa Commercial Bank (Note E) | 1,400,000 | 2,400,000 | 2,400,000 | Repayable quarterly from October 27, 2021 to October 27, 2022 with monthly interest payments. | ||||
Unsecured Revolving Loan from KGI Bank (Note F) | 2,000,000 | - | - | Repayable annually from December 11, 2021 to December 11, 2023 with monthly interest payments. | ||||
Unsecured Revolving Loan from CTBC Bank (Note G) | 1,000,000 | - | - | Settlement due on December 31, 2024 with monthly interest payments. | ||||
Unsecured Revolving Loan from First Commercial Bank (Note H) | 600,000 | - | - | Settlement due on May 15, 2025 with monthly interest payments. | ||||
Subtotal | 39,592,377 | 33,902,074 | 39,676,118 | |||||
Less: Current portion | (6,825,660) | (4,701,775) | (3,133,617) | |||||
Total | $32,766,717 | $29,200,299 | $36,542,501 |
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For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Interest rates applied | 0.84%~4.67% | 0.55%~5.56% |
Note A: UMC entered into a 2-year loan agreement with HSBC(Taiwan) Bank, effective from July 29, 2019. The agreement offered UMC a revolving line of credit of US$70 million starting from the first use of the loan to the expiration date of the agreement, October 28, 2019. As of September 30, 2019, the unused line of credit was US$4.7 million.
Note B: UMC entered into a 5-year loan agreement with CTBC Bank, effective from January 25, 2016. The agreement offered UMC a revolving line of credit of NT$2.5 billion starting from the first use of the loan to the expiration date of the agreement, December 31, 2019. As of September 30, 2019, the unused line of credit was NT$64 million.
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Note C: UMC entered into a 5-year loan agreement with Taipei Fubon Bank, effective from February 9, 2018. The agreement offered UMC a revolving line of credit of NT$2 billion. This line of credit will be reduced starting from the end of the two years after the first use and every twelve months thereafter, with a total of four adjustments. The expiration date of the agreement is August 9, 2023. As of September 30, 2020, December 31, 2019 and September 30, 2019, the unused line of credit were nil, NT$2 billion and NT$2 billion, respectively.
Note D: UMC entered into a 5-year loan agreement with Mega International Commercial Bank, effective from October 17, 2016. The agreement offered UMC a revolving line of credit of NT$3 billion. This line of credit will be reduced starting from the end of the two years and six months after the first use and every six months thereafter, with a total of six adjustments. The expiration date of the agreement is April 16, 2022. As of September 30, 2020, December 31, 2019 and September 30, 2019, the unused line of credit were nil, NT$0.5 billion and NT$1 billion, respectively.
Note E: UMC entered into a 5-year loan agreement with Chang Hwa Commercial Bank, effective from November 2, 2016. The agreement offered UMC a revolving line of credit of NT$3 billion. This line of credit will be reduced starting from the end of the third year after the first use and every three months thereafter, with a total of nine adjustments. The expiration date of the agreement is October 27, 2022. As of September 30, 2020, December 31, 2019 and September 30, 2019, the unused line of credit were NT$1.6 billion, NT$0.6 billion and NT$0.6 billion, respectively.
Note F: UMC entered into a 5-year loan agreement with KGI Commercial Bank, effective from September 11, 2018. The agreement offered UMC a revolving line of credit of NT$2.5 billion. This line of credit will be reduced starting from the end of the second year after the first use and every twelve months thereafter, with a total of four adjustments. The expiration date of the agreement is December 11, 2023. As of September 30, 2020, December 31, 2019 and September 30, 2019, the unused line of credit were NT$0.5 billion, NT$2.5 billion and NT$2.5 billion, respectively.
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Note G: CTBC Bank approved the 5-year credit loan on December 31, 2019, which offered UMC a revolving line of credit of NT$2.9 billion starting from the approval date to December 31, 2024. As of September 30, 2020 and December 31, 2019, the unused line of credit were NT$1.9 billion and NT$2.9 billion, respectively.
Note H: First Commercial Bank approved the 1-year credit loan on December 30, 2019, which offered UMC a revolving line of credit of NT$2 billion starting from the approval date to December 30, 2020. As of September 30, 2020 and December 31, 2019, the unused line of credit were NT$1.4 billion and NT$2 billion, respectively.
b. | Please refer to Note 8 for property, plant and equipment and right-of-use assets pledged as collateral for long-term loans. |
(14) | Post-Employment Benefits |
a. | Defined contribution plan |
The employee pension plan under the Labor Pension Act of the R.O.C. is a defined contribution plan. Pursuant to the plan, UMC and its domestic subsidiaries make monthly contributions of 6% based on each individual employee’s salary or wage to employees’ pension accounts. Pension benefits for employees of the Singapore branch and subsidiaries overseas are provided in accordance with the local regulations. Total pension expenses of NT$380 million, NT$340 million, NT$1,098 million and NT$1,014 million are contributed by the Company for the three-month and nine-month periods ended September 30, 2020 and 2019, respectively.
b. | Defined benefit plan |
The employee pension plan mandated by the Labor Standards Act of the R.O.C. is a defined benefit plan. The pension benefits are disbursed based on the units of service years and average monthly salary prior to retirement according to the Labor Standards Act. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year and the total units will not exceed 45 units. The Company contributes an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited with the Bank of Taiwan under the name of a pension fund supervisory committee. The pension fund is managed by the government’s designated authorities and therefore is not included in the Company’s consolidated financial statements. Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year. For the three-month and nine-month periods ended September 30, 2020 and 2019, total pension expenses of NT$10 million, NT$15 million, NT$30 million and NT$44 million, respectively, were recognized by the Company.
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(15) | Deferred Government Grants |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Beginning balance | $13,551,553 | $17,480,904 | $17,480,904 | |||
Arising during the period | 482,389 | 617,685 | 639,730 | |||
Recorded in profit or loss: | ||||||
Other operating income | (2,995,847) | (4,062,148) | (3,061,189) | |||
Exchange effect | (178,048) | (484,888) | (359,702) | |||
Ending balance | $10,860,047 | $13,551,553 | $14,699,743 | |||
Current | $3,778,175 | $3,780,579 | $3,932,691 | |||
Noncurrent | 7,081,872 | 9,770,974 | 10,767,052 | |||
Total | $10,860,047 | $13,551,553 | $14,699,743 |
The significant government grants related to equipment acquisitions received by the Company are amortized as income over the useful lives of related equipment and recorded in the net other operating income and expenses.
(16) | Refund Liabilities (classified under other current liabilities) |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Refund liabilities | $1,489,962 | $2,078,075 | $1,680,427 |
(17) | Equity |
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a. | Capital stock: |
i. | UMC had 26,000 million common shares authorized to be issued as of September 30, 2020, December 31, 2019 and September 30, 2019, of which 12,422 million shares, 11,724 million shares, and 11,724 million shares were issued as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively, each at a par value of NT$10. |
ii. | UMC had 127 million, 138 million and 139 million ADSs, which were traded on the NYSE as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively. The total number of common shares of UMC represented by all issued ADSs were 633 million shares, 692 million shares and 695 million shares as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively. One ADS represents five common shares. |
iii. | On June 28, 2019, UMC cancelled 400 million shares of treasury stock, which were repurchased during the period from May 13 to June 13, 2016 for the purpose of transferring to employees, and repurchased during the period from April 26 to June 13, 2019 for the purpose of maintaining UMC’s credit and its stockholders’ rights and interests. |
iv. | On March 11, 2019, UMC cancelled 300 million shares of treasury stock, which were repurchased during the period from November 7, 2018 to January 4, 2019, for the purpose of maintaining UMC’s credit and its stockholders’ rights and interests. |
v. | Please refer to Note 6(12) for the Company’s conversion of unsecured convertible bonds into ordinary shares of UMC for the nine-month periods ended September 30, 2020 and 2019, respectively. |
vi. | On September 1, 2020, UMC issued restricted stocks for its employees in a total of 200 million shares with a par value of NT$10 each. The issuance was approved by the competent authority and the registration was completed. Please refer to Note 6(18) for the information of restricted stocks. |
b. | Treasury stock: |
i. | UMC carried out a treasury stock program and repurchased its shares from the centralized securities exchange market. The purpose for the repurchase and changes in treasury stock during the nine-month periods ended September 30, 2020 and 2019 are as follows: |
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For the nine-month period ended September 30, 2020
(In thousands of shares)
Purpose | As of January 1, 2020 | Increase | Decrease | As of September 30, 2020 | ||||
For transfer to employees | - | 105,000 | 105,000 | - |
For the nine-month period ended September 30, 2019
(In thousands of shares)
Purpose | As of January 1, 2019 | Increase | Decrease | As of September 30, 2019 | ||||
For transfer to employees | 200,000 | - | 200,000 | - | ||||
To maintain UMC’s credit and stockholders’ rights and interests | 280,000 | 220,000 | 500,000 | - | ||||
480,000 | 220,000 | 700,000 | - |
ii. | According to the Securities and Exchange Law of the R.O.C., the total shares of treasury stock shall not exceed 10% of UMC’s issued stock, and the total purchase amount shall not exceed the sum of the retained earnings, additional paid-in capital-premiums and realized additional paid-in capital. As such, the number of shares of treasury stock that UMC held as of September 30, 2020, December 31, 2019 and September 30, 2019, did not exceed the limit. |
iii. | In compliance with Securities and Exchange Law of the R.O.C., treasury stock held by the parent company should not be pledged, nor should it be entitled to voting rights or receiving dividends. Stock held by subsidiaries is treated as treasury stock. These subsidiaries have the same rights as other stockholders except for subscription to new stock issuance and voting rights. |
iv. | UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held shares of UMC’s stock through acquiring shares of UNITED SILICON INC. in 1997, and these shares were converted to UMC’s stock in 2000 as a result of the Company’s 5 in 1 merger. As of September 30, 2020, December 31, 2019 and September 30, 2019, UMC’s subsidiary, FORTUNE VENTURE CAPITAL CORP., held 16 million shares of UMC’s stock. The closing price on September 30, 2020, December 31, 2019 and September 30, 2019, were NT$28.55, NT$16.45 and NT$13.40, respectively. |
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c. | Retained earnings and dividend policies: |
According to UMC’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:
i. | Payment of taxes. |
ii. | Making up loss for preceding years. |
iii. | Setting aside 10% for legal reserve, except for when accumulated legal reserve has reached UMC’s paid-in capital. |
iv. | Appropriating or reversing special reserve by government officials or other regulations. |
v. | The remaining, if applicable, may be distributed preferentially as preferred shares dividends for the current year, and if there is still a remaining balance, in addition to the previous year’s unappropriated earnings, UMC shall distribute it according to the distribution plan proposed by the Board of Directors according to the dividend policy and submitted to the stockholders’ meeting for approval. |
Because UMC conducts business in a capital intensive industry and continues to operate in its growth phase, the dividend policy of UMC shall be determined pursuant to factors such as the investment environment, its funding requirements, domestic and overseas competitive landscape and its capital expenditure forecast, as well as stockholders’ interest, balancing dividends and UMC’s long-term financial planning. The Board of Directors shall propose the distribution plan and submit it to the stockholders’ meeting every year. The distribution of stockholders’ dividend shall be allocated as cash dividend in the range of 20% to 100%, and stock dividend in the range of 0% to 80%.
According to the regulations of Taiwan FSC, UMC is required to appropriate a special reserve in the amount equal to the sum of debit elements under equity, such as unrealized loss on financial instruments and debit balance of exchange differences on translation of foreign operations, at every year-end. Such special reserve is prohibited from distribution. However, if any of the debit elements is reversed, the special reserve in the amount equal to the reversal may be released for earnings distribution or offsetting accumulated deficits.
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The appropriation of earnings for 2019 and 2018 were approved by the stockholders’ meeting held on June 10, 2020 and June 12, 2019, respectively. The details of appropriation are as follows:
Appropriation of earnings (in thousand NT dollars) | Cash dividend per share (NT dollars) | |||||||
2019 | 2018 | 2019 | 2018 | |||||
Legal reserve | $963,947 | $707,299 | ||||||
Special reserve | (3,491,626) | 14,513,940 | ||||||
Cash dividends | 9,765,155 | 6,916,105 | $0.75 | $0.58 |
The appropriation of earnings for 2019 approved by the stockholders’ meeting on June 10, 2020 is different from the amounts disclosed in the consolidated and parent company only financial statements for the year ended December 31, 2019 because of the additional legal reserve appropriated for the reversal of special reserve in accordance with the Rule No. 10902005780 subsequently issued by the Ministry of Economic Affairs, R.O.C. on March 3, 2020.
The aforementioned 2019 and 2018 appropriation approved by stockholders’ meeting was consistent with the resolutions of meeting of Board of Directors held on April 27, 2020 and March 6, 2019.
The cash dividend per share for 2019 was adjusted to NT$0.80395653 per share. The adjustment was made for the net decrease in outstanding common shares due to the share repurchase program and the conversion of convertible bonds into ordinary shares of UMC.
The cash dividend per share for 2018 was adjusted to NT$0.58989396 per share according to the resolution of the Board of Directors’ meeting on June 19, 2019. The adjustment was made for the decrease in outstanding common shares due to the share repurchase program.
Please refer to Note 6(20) for information on the employees and directors’ compensation.
d. | Non-controlling interests: |
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For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Adjusted balance as of January 1 | $410,065 | $466,768 | ||
Attributable to non-controlling interests: | ||||
Net loss | (1,703,074) | (2,897,201) | ||
Other comprehensive income (loss) | 126,656 | (23,303) | ||
The differences between the fair value of the consideration paid or received from acquiring or disposing subsidiaries and the carrying amounts of the subsidiaries | 106,879 | - | ||
Changes in subsidiaries’ ownership | 1,291 | 23,940 | ||
Non-controlling interests | (570,188) | - | ||
Others | 1,781,878 | 2,835,195 | ||
Ending balance | $153,507 | $405,399 |
(18) | Share-Based Payment |
a. | Treasury stock plan for employees |
In August 2018, the Company carried out a compensation plan to offer 200 million shares of treasury stock to qualified employees of UMC. The compensation cost for the shared-based payment was measured at fair value, having recognized in expense the difference between the closing quoted market price of the shares at the grant date and the cash received from employees. The closing quoted market price of the Company’s shares on the grant date was NT$16.95 per share. For the stocks vested on the date of grant, the Company recognized the entire compensation cost once granted, whereas for the stocks with requisite service conditions to vest at the end of one or two years from the date of grant, the Company recognizes the compensation cost over the vesting period in which the services conditions are fulfilled, together with a corresponding increase in equity. For the three-month and nine-month periods ended September 30, 2020 and 2019, the compensation cost of NT$32 million, NT$107 million, NT$107 million and NT$328 million, respectively, were recognized in expenses by the Company.
In September 2020, the Company carried out a compensation plan to offer 105 million shares of treasury stock to qualified employees of the Company. The compensation cost for the shared-based payment was measured at fair value, having recognized in expense the difference between the closing quoted market price of the shares at the grant date and the cash received from employees. The closing quoted market price of the Company’s shares on the grant date was NT$21.45 per share. For the stocks vested on the date of grant, the Company recognized the entire compensation cost once granted, whereas for the stocks with requisite service conditions to vest at the end of one year from the date of grant, the Company recognizes the compensation cost over the period in which the services conditions are fulfilled, together with a corresponding increase in equity. For the three-month and nine-month periods ended September 30, 2020, the compensation cost of NT$274 million and NT$274 million, respectively, were recognized in expenses by the Company.
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b. | Restricted stock plan for employees |
On June 10, 2020, the stockholders approved a compensation plan in their meeting to issue restricted stocks to qualified employees of UMC without consideration. The maximum shares to be issued are 233 million common shares. The Company is authorized to issue restricted stocks in one tranche or in installments, under the custody of trust institution, within one year from the date of receiving the effective registration from the competent authority. The issuance plan was authorized for effective registration by the Securities and Futures Bureau of the FSC and accordingly, 200 million shares of restricted stock for employees were issued without consideration on September 1, 2020. The life of the plan is four years. Beginning from the end of two years since the date of grant, those employees who fulfill both service period and performance conditions set by the Company are gradually eligible to the vested restricted stocks at certain percentage and time frame. For those employees who fail to fulfill the vesting conditions, the Company will recall and cancel their stocks without consideration. During the vesting period, the restricted stock holders are entitled the same rights as those of common stock holders including the right to receive dividends, but are restricted to sell, pledge, set guarantee, transfer, grant, or dispose the restricted stocks in any other ways. Related information can be obtained from the “Market Observation Post System” on the website of the TWSE.
The compensation cost for the equity-settled share-based payment was measured at fair value based on the closing quoted market price of the shares on the grant date, NT$21.8 per share. The unvested restricted stocks issued on the grant date for employees are recognized in unearned employee compensation as a transitional contra equity account and such account shall be amortized as compensation expense over the vesting period. For the three-month and nine-month periods ended September 30, 2020, the compensation cost of NT$124 million and NT$124 million, respectively, were recognized in expenses by the Company.
c. | Stock appreciation right plan for employees |
In September 2020, the Company carried out a compensation plan to grant 26 million units of cash-settled stock appreciation right to qualified employees of the Company without consideration. One unit of stock appreciation right to employees represents a right to the intrinsic value of one common share of UMC. The life of the plan is four years. Beginning from the end of two years since the date of grant, those employees who fulfill both service period and performance conditions set by the Company are gradually eligible to the vested stock appreciation right at certain percentage and time frame. For those employees who fail to fulfill the vesting conditions, the Company will withdraw their rights without consideration. During the vesting period, the holders of the stock appreciation right are not entitled the same rights as those of common stock holders of UMC.
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The compensation cost for the cash-settled share-based payment was measured at fair value on the grant date by using Black-Scholes Option Pricing Model and will be remeasured at the end of each reporting period until settlement. The assumptions used are as below:
As of September 30, 2020 | ||
Share price of measurement date (NT$/ per share) | $28.55 | |
Expected volatility | 30.79%~34.29% | |
Expected life | 1.92~3.92 years | |
Expected dividend yield | 4.73% | |
Risk-free interest rate | 0.18%~0.28% |
For the three-month and nine-month periods ended September 30, 2020, the compensation cost of NT$16 million and NT$16 million, respectively, were recognized in expenses by the Company. As of September 30, 2020, the liabilities for stock appreciation right recognized amounted to NT$16 million. The intrinsic value for the liabilities of vested rights was nil.
(19) | Operating Revenues |
a. | Disaggregation of revenue |
i. | By Product |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Wafer | $43,012,632 | $36,387,384 | ||
Others | 1,857,822 | 1,351,056 | ||
Total | $44,870,454 | $37,738,440 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Wafer | $126,504,900 | $102,528,315 | ||
Others | 5,019,661 | 3,824,268 | ||
Total | $131,524,561 | $106,352,583 |
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ii. | By geography |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Taiwan | $15,754,604 | $13,402,099 | ||
Singapore | 7,263,787 | 5,822,970 | ||
China (includes Hong Kong) | 6,150,405 | 5,822,883 | ||
Japan | 3,461,668 | 1,624,199 | ||
USA | 5,491,526 | 5,888,171 | ||
Europe | 2,578,878 | 1,735,709 | ||
Others | 4,169,586 | 3,442,409 | ||
Total | $44,870,454 | $37,738,440 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Taiwan | $48,646,272 | $39,836,702 | ||
Singapore | 19,107,943 | 17,729,265 | ||
China (includes Hong Kong) | 16,160,546 | 13,219,598 | ||
Japan | 12,938,723 | 5,248,948 | ||
USA | 18,250,342 | 13,926,685 | ||
Europe | 4,868,267 | 5,521,511 | ||
Others | 11,552,468 | 10,869,874 | ||
Total | $131,524,561 | $106,352,583 |
The geographic breakdown of the Company’s operating revenues was based on the location of the Company’s customers.
49 |
iii. | By operating segments |
For the three-month period ended September 30, 2020 | |||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | |||||||
Revenue from contracts with customers | $44,868,187 | $3,208 | $44,871,395 | $(941) | $44,870,454 | ||||||
The timing of revenue recognition: | |||||||||||
At a point in time | $43,943,680 | $3,208 | $43,946,888 | $(941) | $43,945,947 | ||||||
Over time | 924,507 | - | 924,507 | - | 924,507 | ||||||
Total | $44,868,187 | $3,208 | $44,871,395 | $(941) | $44,870,454 | ||||||
For the three-month period ended September 30, 2019 | |||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | |||||||
Revenue from contracts with customers | $37,730,926 | $7,514 | $37,738,440 | $- | $37,738,440 | ||||||
The timing of revenue recognition: | |||||||||||
At a point in time | $37,430,165 | $7,514 | $37,437,679 | $- | $37,437,679 | ||||||
Over time | 300,761 | - | 300,761 | - | 300,761 | ||||||
Total | $37,730,926 | $7,514 | $37,738,440 | $- | $37,738,440 | ||||||
For the nine-month period ended September 30, 2020 | |||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | |||||||
Revenue from contracts with customers | $131,515,985 | $12,039 | $131,528,024 | $(3,463) | $131,524,561 | ||||||
The timing of revenue recognition: | |||||||||||
At a point in time | $129,711,022 | $12,039 | $129,723,061 | $(3,463) | $129,719,598 | ||||||
Over time | 1,804,963 | - | 1,804,963 | - | 1,804,963 | ||||||
Total | $131,515,985 | $12,039 | $131,528,024 | $(3,463) | $131,524,561 | ||||||
50 |
For the nine-month period ended September 30, 2019 | |||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | |||||||
Revenue from contracts with customers | $106,292,701 | $59,882 | $106,352,583 | $- | $106,352,583 | ||||||
The timing of revenue recognition: | |||||||||||
At a point in time | $105,493,276 | $59,882 | $105,553,158 | $- | $105,553,158 | ||||||
Over time | 799,425 | - | 799,425 | - | 799,425 | ||||||
Total | $106,292,701 | $59,882 | $106,352,583 | $- | $106,352,583 |
b. | Contract balances |
i. | Contract assets, current |
As of | ||||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||
Sales of goods and services | $706,136 | $599,491 | $510,121 | $486,184 | ||||
Less: Loss allowance | (373,711) | (385,248) | (396,463) | (393,974) | ||||
Net | $332,425 | $214,243 | $113,658 | $92,210 |
The loss allowance was assessed by the Company primarily at an amount equal to lifetime expected credit losses. The loss allowance was mainly resulted from the indictment filed by the United States Department of Justice (DOJ) against UMC related to the joint technology development agreement. Please refer to Note 9(6).
ii. | Contract liabilities |
51 |
As of | ||||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||
Sales of goods and services | $2,397,185 | $1,470,195 | $1,619,307 | $932,371 | ||||
Current | $1,930,785 | $988,115 | $1,122,187 | $932,371 | ||||
Noncurrent | 466,400 | 482,080 | 497,120 | - | ||||
Total | $2,397,185 | $1,470,195 | $1,619,307 | $932,371 |
The movement of contract liabilities is mainly caused by the timing difference of the satisfaction of a performance of obligation and the consideration received from customers.
The Company recognized NT$615 million and NT$519 million, respectively, in revenues from the contract liabilities balance at the beginning of the period as performance obligations were satisfied during the nine-month periods ended September 30, 2020 and 2019.
c. | The Company’s transaction price allocated to unsatisfied performance obligations amounted to NT$2,838 million and NT$3,093 million as of September 30, 2020 and 2019, respectively. The Company will recognize revenue as the Company satisfies its performance obligations over time that aligns with progress toward completion of a contract in the future. As of the report date, the progress cannot be reliably estimated primarily due to the suspension as disclosed in Note 9(6). The estimate of the transaction price does not include any estimated amounts of variable consideration that are constrained. |
d. | Asset recognized from costs to fulfill a contract with customer |
As of September 30, 2020, December 31, 2019 and September 30, 2019, the Company recognized costs to fulfill engineering service contracts eligible for capitalization as other current assets which amounted to NT$852 million, NT$560 million and NT$648 million, respectively. Subsequently, the Company will expense from costs to fulfill a contract to operating costs when the related obligations are satisfied.
(20) | Operating Costs and Expenses |
52 |
The Company’s employee benefit, depreciation and amortization expenses are summarized as follows:
For the three-month periods ended September 30, | ||||||||||||
2020 | 2019 | |||||||||||
Operating costs | Operating expenses |
| Total | Operating costs | Operating expenses | Total | ||||||
Employee benefit expenses | ||||||||||||
Salaries | $5,304,707 | $2,455,202 | $7,759,909 | $4,258,696 | $1,941,546 | $6,200,242 | ||||||
Labor and health insurance | 272,364 | 118,059 | 390,423 | 221,195 | 102,743 | 323,938 | ||||||
Pension | 292,226 | 98,055 | 390,281 | 266,495 | 88,125 | 354,620 | ||||||
Other employee benefit expenses | 64,186 | 30,454 | 94,640 | 69,154 | 23,537 | 92,691 | ||||||
Depreciation | 10,948,799 | 463,582 | 11,412,381 | 11,016,968 | 447,864 | 11,464,832 | ||||||
Amortization | 225,453 | 465,162 | 690,615 | 170,635 | 346,170 | 516,805 |
For the nine-month periods ended September 30, | ||||||||||||
2020 | 2019 | |||||||||||
Operating costs | Operating expenses |
| Total | Operating costs | Operating expenses | Total | ||||||
Employee benefit expenses | ||||||||||||
Salaries | $15,134,952 | $6,667,412 | $21,802,364 | $12,541,794 | $5,632,178 | $18,173,972 | ||||||
Labor and health insurance | 808,954 | 348,074 | 1,157,028 | 662,322 | 283,158 | 945,480 | ||||||
Pension | 843,903 | 284,054 | 1,127,957 | 791,189 | 266,991 | 1,058,180 | ||||||
Other employee benefit expenses | 183,181 | 87,010 | 270,191 | 197,707 | 71,575 | 269,282 | ||||||
Depreciation | 33,236,045 | 1,460,850 | 34,696,895 | 33,598,605 | 1,367,574 | 34,966,179 | ||||||
Amortization | 679,733 | 1,338,074 | 2,017,807 | 568,776 | 884,387 | 1,453,163 |
According to UMC’s Articles of Incorporation, the employees and directors’ compensation shall be distributed in the following order:
53 |
UMC shall allocate no less than 5% of profit as employees’ compensation and no more than 0.2% of profit as directors’ compensation for each profitable fiscal year after offsetting any cumulative losses. The aforementioned employees’ compensation will be distributed in shares or cash. The employees of UMC’s subsidiaries who fulfill specific requirements stipulated by the Board of Directors may be granted such compensation. Directors may only receive compensation in cash. UMC may, by a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors, distribute the aforementioned employees and directors’ compensation and report to the stockholders’ meeting for such distribution.
The Company recognizes the employees and directors’ compensation in the profit or loss during the periods when earned for the nine-month periods ended September 30, 2020 and 2019. The Board of Directors estimates the amount by taking into consideration the Articles of Incorporation, government regulations and industry averages. If the Board of Directors resolves to distribute employee compensation through stock, the number of stock distributed is calculated based on total employee compensation divided by the closing price of the day before the Board of Directors meeting. If the Board of Directors subsequently modifies the estimates significantly, the Company will recognize the change as an adjustment in the profit or loss in the subsequent period.
The distributions of employees and directors’ compensation for 2019 and 2018 were reported to the stockholders’ meeting on June 10, 2020 and June 12, 2019, respectively. The details of distribution are as follows:
2019 | 2018 | |||
Employees’ compensation – Cash | $1,132,952 | $1,400,835 | ||
Directors’ compensation | 10,259 | 7,624 |
The aforementioned 2019 and 2018 employees and directors’ compensation reported during the stockholders’ meeting were consistent with the resolutions of meeting of Board of Directors held on February 26, 2020 and March 6, 2019.
Information relevant to the aforementioned employees and directors’ compensation can be obtained from the “Market Observation Post System” on the website of the TWSE.
(21) | Net Other Operating Income and Expenses |
54 |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Government grants | $1,777,582 | $1,246,192 | ||
Rental income from property | 51,067 | 47,602 | ||
Gain (loss) on disposal of property, plant and equipment | 1,087,260 | (109) | ||
Others | (43,579) | (86,116) | ||
Total | $2,872,330 | $1,207,569 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Government grants | $4,104,871 | $4,172,028 | ||
Rental income from property | 151,387 | 150,480 | ||
Gain (loss) on disposal of property, plant and equipment | 1,100,764 | (10,258) | ||
Impairment loss on property, plant and equipment | - | (85,202) | ||
Others | (205,107) | (259,477) | ||
Total | $5,151,915 | $3,967,571 |
(22) | Non-Operating Income and Expenses |
a. | Other gains and losses |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Gain on valuation of financial assets and liabilities at fair value through profit or loss | $642,980 | $65,410 | ||
Loss on disposal of investments | (659) | (6,376) | ||
Others | (1,788,313) | 8,735 | ||
Total | $(1,145,992) | $67,769 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Gain on valuation of financial assets and liabilities at fair value through profit or loss | $130,288 | $823,570 | ||
Loss on disposal of investments | (44,088) | (6,376) | ||
Others | (1,969,552) | 17,570 | ||
Total | $(1,883,352) | $834,764 |
The Company accrued the losses for the charges brought by the U.S. Department of Justice regarding allegation of conspiracy to engage in theft of trade secrets. Please refer to Note 9(6).
b. | Finance costs |
55 |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Interest expenses | ||||
Bonds payable | $63,461 | $163,858 | ||
Bank loans | 348,756 | 460,420 | ||
Lease liabilities | 40,133 | 46,521 | ||
Others | 6,510 | 77,011 | ||
Financial expenses | 27,516 | 21,643 | ||
Total | $486,376 | $769,453 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Interest expenses | ||||
Bonds payable | $313,732 | $508,617 | ||
Bank loans | 1,115,673 | 1,380,639 | ||
Lease liabilities | 115,980 | 133,186 | ||
Others | 53,688 | 195,343 | ||
Financial expenses | 56,284 | 52,272 | ||
Total | $1,655,357 | $2,270,057 |
(23) | Components of Other Comprehensive Income (Loss) |
For the three-month period ended September 30, 2020 | ||||||||||
| Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | |||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $882,102 | $- | $882,102 | $(17,016) | $865,086 | |||||
Share of other comprehensive income (loss) of associates and joint ventures which will not be reclassified subsequently to profit or loss | 918,815 | - | 918,815 | - | 918,815 | |||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||
Exchange differences on translation of foreign operations | (434,477) | - | (434,477) | 11,900 | (422,577) | |||||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | 25,859 | - | 25,859 | 3,222 | 29,081 | |||||
Total other comprehensive income (loss) | $1,392,299 | $- | $1,392,299 | $(1,894) | $1,390,405 |
56 |
For the three-month period ended September 30, 2019 | ||||||||||
| Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | |||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $1,848,728 | $- | $1,848,728 | $(131,554) | $1,717,174 | |||||
Share of other comprehensive income (loss) of associates and joint ventures which will not be reclassified subsequently to profit or loss | 333,124 | - | 333,124 | - | 333,124 | |||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||
Exchange differences on translation of foreign operations | (1,454,645) | - | (1,454,645) | 1,728 | (1,452,917) | |||||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | (10,120) | 6,379 | (3,741) | (3,281) | (7,022) | |||||
Total other comprehensive income (loss) | $717,087 | $6,379 | $723,466 | $(133,107) | $590,359 |
57 |
For the nine-month period ended September 30, 2020 | ||||||||||
| Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | |||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $2,246,483 | $- | $2,246,483 | $39,883 | $2,286,366 | |||||
Share of other comprehensive income (loss) of associates and joint ventures which will not be reclassified subsequently to profit or loss | 877,716 | - | 877,716 | - | 877,716 | |||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||
Exchange differences on translation of foreign operations | (2,352,083) | - | (2,352,083) | 21,999 | (2,330,084) | |||||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | 2,207 | 11,479 | 13,686 | 6,323 | 20,009 | |||||
Total other comprehensive income (loss) | $774,323 | $11,479 | $785,802 | $68,205 | $854,007 |
For the nine-month period ended September 30, 2019 | ||||||||||
| Arising during the period | Reclassification adjustments during the period | Other comprehensive income (loss), before tax | Income tax effect | Other comprehensive income (loss), net of tax | |||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $4,686,383 | $- | $4,686,383 | $(141,712) | $4,544,671 | |||||
Share of other comprehensive income (loss) of associates and joint ventures which will not be reclassified subsequently to profit or loss | 879,098 | - | 879,098 | - | 879,098 | |||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||
Exchange differences on translation of foreign operations | (499,675) | - | (499,675) | (7,308) | (506,983) | |||||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | 35,261 | 6,379 | 41,640 | (11,423) | 30,217 | |||||
Total other comprehensive income (loss) | $5,101,067 | $6,379 | $5,107,446 | $(160,443) | $4,947,003 |
58 |
(24) | Income Tax |
a. | The major components of income tax expense for the three-month and nine-month periods ended September 30, 2020 and 2019 were as follows: |
i. | Income tax expense (benefit) recorded in profit or loss |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Current income tax expense (benefit): | ||||
Current income tax charge | $580,654 | $173,281 | ||
Adjustments in respect of current income tax of prior periods | (62,332) | (1,222) | ||
Deferred income tax expense (benefit): | ||||
Deferred income tax related to origination and reversal of temporary differences | (576,298) | 62,421 | ||
Deferred income tax related to recognition and derecognition of tax losses and unused tax credits | 256,525 | (38,675) | ||
Adjustment of prior year’s deferred income tax | (1,574) | 310 | ||
Deferred income tax arising from write-down or reversal of write-down of deferred tax assets | (7) | (157,139) | ||
Income tax expense recorded in profit or loss | $196,968 | $38,976 |
59 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Current income tax expense (benefit): | ||||
Current income tax charge | $1,012,251 | $444,612 | ||
Adjustments in respect of current income tax of prior periods | (852,682) | (826,563) | ||
Deferred income tax expense (benefit): | ||||
Deferred income tax related to origination and reversal of temporary differences | (286,955) | 339,912 | ||
Deferred income tax related to recognition and derecognition of tax losses and unused tax credits | 808,141 | (162,901) | ||
Adjustment of prior year’s deferred income tax | (296,332) | 118,694 | ||
Deferred income tax arising from write-down or reversal of write-down of deferred tax assets | 17,115 | (115,975) | ||
Income tax expense (benefit) recorded in profit or loss | $401,538 | $(202,221) |
ii. | Income tax related to components of other comprehensive income (loss) |
(i) | Items that will not be reclassified subsequently to profit or loss: |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $(17,016) | $(131,554) |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income | $39,883 | $(141,712) |
60 |
(ii) | Items that may be reclassified subsequently to profit or loss: |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Exchange differences on translation of foreign operations | $11,900 | $1,728 | ||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | 3,222 | (3,281) | ||
Income tax related to items that may be reclassified subsequently to profit or loss | $15,122 | $(1,553) |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Exchange differences on translation of foreign operations | $21,999
| $(7,308) | ||
Share of other comprehensive income (loss) of associates and joint ventures which may be reclassified subsequently to profit or loss | 6,323 | (11,423) | ||
Income tax related to items that may be reclassified subsequently to profit or loss | $28,322 | $(18,731) |
iii. | Deferred income tax charged directly to equity |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Recognition of temporary difference arising from initial recognition of the equity component of the compound financial instrument | $- | $- |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Recognition of temporary difference arising from initial recognition of the equity component of the compound financial instrument | $3,691 | $- |
61 |
b. | The Company is subject to taxation in Taiwan and other foreign jurisdictions. As of September 30, 2020, income tax returns of UMC and its subsidiaries in Taiwan have been examined by the tax authorities through 2017, while in other foreign jurisdictions, relevant tax authorities have completed the examination through 2012. There is an uncertain tax position that the outcome of the income tax returns of certain companies within the Company may not be accepted by the tax authorities of the respective countries of operations. For the recognition and measurement of deferred income tax and current income tax which involved significant accounting judgments, estimates and assumptions, please refer to Note 5(5) of the Company’s consolidated financial statements for the year ended December 31, 2019. |
(25) | Earnings Per Share |
a. | Earnings per share-basic |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Net income attributable to the parent company | $9,106,271 | $2,928,678 | ||
Weighted-average number of ordinary shares for basic earnings per share (thousand shares) | 12,107,651 | 11,708,240 | ||
Earnings per share-basic (NTD) | $0.75 | $0.25 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Net income attributable to the parent company | $17,993,985 | $5,870,601 | ||
Weighted-average number of ordinary shares for basic earnings per share (thousand shares) | 12,028,204 | 11,810,800 | ||
Earnings per share-basic (NTD) | $1.50 | $0.50 |
b. | Earnings per share-diluted |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Net income attributable to the parent company | $9,106,271 | $2,928,678 | ||
Effect of dilution | ||||
Unsecured convertible bonds | - | 72,472 | ||
Income attributable to stockholders of the parent | $9,106,271 | $3,001,150 | ||
Weighted-average number of common stocks for basic earnings per share (thousand shares) | 12,107,651 | 11,708,240 | ||
Effect of dilution | ||||
Restricted stocks for employees | 10,358 | - | ||
Employees’ compensation | 61,552 | 44,897 | ||
Unsecured convertible bonds | - | 1,295,888 | ||
Weighted-average number of common stocks after dilution (thousand shares) | 12,179,561 | 13,049,025 | ||
Earnings per share-diluted (NTD) | $0.75 | $0.23 |
62 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Net income attributable to the parent company | $17,993,985 | $5,870,601 | ||
Effect of dilution | ||||
Unsecured convertible bonds | 69,019 | 216,309 | ||
Income attributable to stockholders of the parent | $18,063,004 | $6,086,910 | ||
Weighted-average number of common stocks for basic earnings per share (thousand shares) | 12,028,204 | 11,810,800 | ||
Effect of dilution | ||||
Restricted stocks for employees | 3,478 | - | ||
Employees’ compensation | 76,115 | 73,208 | ||
Unsecured convertible bonds | 405,578 | 1,295,888 | ||
Weighted-average number of common stocks after dilution (thousand shares) | 12,513,375 | 13,179,896 | ||
Earnings per share-diluted (NTD) | $1.44 | $0.46 |
(26) | Reconciliation of Liabilities Arising from Financing Activities |
For the nine-month period ended September 30, 2020:
Non-cash changes | ||||||||||
Items | As of January 1, 2020 | Cash Flows | Foreign exchange | Others (Note A) | As of September 30, 2020 | |||||
Short-term loans | $12,015,206 | $(4,283,971) | $(210,429) | $50,839 | $7,571,645 | |||||
Long-term loans (current portion included) | 33,902,074 | 6,487,609 | (797,306) | - | 39,592,377 | |||||
Bonds payable (current portion included) | 38,781,416 | (13,702,875) | - | (6,388,855) (Note B) | 18,689,686 | |||||
Guarantee deposits (current portion included) | 296,694 | (69,663) | (1,870) | - | 225,161 | |||||
Lease liabilities | 6,031,025 | (549,252) | (63,680) | 317,631 | 5,735,724 | |||||
Other financial liabilities-noncurrent | 20,093,441 | - | (225,553) | 276,666 | 20,144,554 |
63 |
For the nine-month period ended September 30, 2019:
Non-cash changes | ||||||||||
Items | As of January 1, 2019 | Cash Flows | Foreign exchange | Others (Note A) | As of September 30, 2019 | |||||
Short-term loans | $13,103,808 | $3,492,597 | $(308,325) | $194,876 | $16,482,956 | |||||
Long-term loans (current portion included) | 30,826,215 | 8,941,555 | (93,494) | 1,842 | 39,676,118 | |||||
Bonds payable (current portion included) | 41,378,182 | (2,500,000) | - | 274,546 | 39,152,728 | |||||
Guarantee deposits (current portion included) | 665,793 | 241,023 | (1,282) | (619,347) | 286,187 | |||||
Lease liabilities | 6,006,457 | (449,157) | (42,887) | 211,478 | 5,725,891 | |||||
Other financial liabilities-noncurrent | 20,410,355 | - | (527,673) | 288,290 | 20,170,972 |
Note A: Other non-cash changes mainly consisted of discount amortization measured by the effective interest method.
Note B: Please refer to Note 6(12) for the Company’s convertible bonds.
Note C: Please refer to Note 9(5) for more details on other financial liabilities-noncurrent.
(27) | Business Combinations |
UNITED SEMICONDUCTOR JAPAN CO., LTD. (USJC)
64 |
The Company exercised the call option of a joint venture agreement between FUJI SEMICONDUCTOR LIMITED (FSL) to acquire 84.1% ownership interest in MIE FUJITSU SEMICONDUCTOR LIMITED (MIFS) for JPY 54.4 billion on October 1, 2019. The Company previously held 15.9% of ownership interest in MIFS. MIFS became a wholly-owned subsidiary of the Company and was renamed as USJC upon completion of the acquisition. USJC is a 300mm fab in Japan that is currently manufacturing 90nm, 65nm and 40nm products. The fab fits the Company’s specialty technology focus and long-term growth projections. USJC will increase the Company’s foundry market share, provide business synergies and benefit from economies of scale while broadening the Company’s comprehensive specialty and logic technologies to serve Japanese and international customers.
Consideration Transferred: | ||
Cash | $15,711,370 | |
Fair value of previously held equity interest immediately before acquisition | 2,303,988 | |
Gains or losses on hedging instruments | 2,572 | |
Total | $18,017,930 | |
Cash flows analysis of acquisition: | ||
Cash Consideration | $15,711,370 | |
Net cash acquired from the subsidiary | (2,910,389) | |
Net cash outflows from acquisition | $12,800,981 |
The fair value of the identifiable assets and liabilities of USJC as of the date of acquisition were:
Fair value recognized on the acquisition date | ||
Assets | ||
Cash and cash equivalents | $2,910,389 | |
Accounts receivable | 3,561,827 | |
Inventories | 2,428,616 | |
Property, plant and equipment | 11,497,618 | |
Right-of-use assets | 479,547 | |
Intangible assets | 1,318,754 | |
Deferred tax assets | 1,563,553 | |
Others | 230,431 | |
23,990,735 | ||
Liabilities | ||
Accounts payable | (3,170,323) | |
Other payables and payables on equipment | (1,962,119) | |
Lease liabilities | (479,547) | |
Others | (189,231) | |
(5,801,220) | ||
Total identifiable net assets | $18,189,515 |
65 |
Gain on bargain purchase: | ||
Consideration transferred | $18,017,930 | |
Less: Fair value of identifiable net assets | (18,189,515) | |
Bargain purchase gain | $(171,585) |
The fair value of the net identifiable assets acquired and liabilities assumed was in excess of the aggregate consideration transferred and the previously held ownership interest of 15.9% in USJC at the acquisition date, and the difference was recognized as bargain purchase gain.
The previously held ownership interest of 15.9% in USJC was previously accounted for as financial assets at fair value through other comprehensive income, non-current. It was subsequently remeasured at fair value with the consideration for a minority interest discount on the acquisition date resulting in the bargain purchase gain. Upon the acquisition, the Company recognized a loss on disposal of NT$375 million and the accumulated unrealized losses on the previously held ownership interest was reclassified from other comprehensive income to retained earnings for the year ended December 31, 2019.
7. | RELATED PARTY TRANSACTIONS |
The following is a summary of transactions between the Company and related parties during the financial reporting periods:
(1) | Name and Relationship of Related Parties |
Name of related parties | Relationship with the Company | |
FARADAY TECHNOLOGY CORP. and its Subsidiaries | Associate | |
HSUN CHIEH INVESTMENT CO., LTD. | Associate | |
HSUN CHIEN CAPITAL CORP. | Associate | |
SILICON INTEGRATED SYSTEMS CORP. | The Company’s director | |
PHOTRONICS DNP MASK CORPORATION | Other related parties | |
UNITEDVISION SEMICONDUCTOR CO., LTD. | Other related parties | |
UPI SEMICONDUCTOR CORP. | Other related parties |
66 |
(2) | Significant Related Party Transactions |
a. | Operating transactions |
Operating revenues
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Associates | $669,007 | $512,833 | ||
Others | 9,197 | 12,921 | ||
Total | $678,204 | $525,754 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Associates | $1,585,342 | $1,123,602 | ||
Others | 17,781 | 26,595 | ||
Total | $1,603,123 | $1,150,197 |
Accounts receivable, net
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Associates | $367,839 | $278,702 | $208,760 | |||
Others | 6,123 | 11,243 | 8,482 | |||
Total | $373,962 | $289,945 | $217,242 |
The sales price to the above related parties was determined through mutual agreement in reference to market conditions. The collection period for domestic sales to related parties were month-end 30~60 days, while the collection period for overseas sales was net 30~60 days.
Refund liabilities (classified under other current liabilities)
67 |
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Associates | $891 | $7,880 | $16,674 | |||
Others | 25 | 48 | 53 | |||
Total | $916 | $7,928 | $16,727 |
b. | Significant asset transactions |
Acquisition of financial assets at fair value through profit or loss, noncurrent
For the three-month period ended September 30, 2020: None.
Purchase price | ||||||
Trading Volume (In thousands of shares) | Transaction underlying | For the nine-month period ended September 30, 2020 | ||||
Associates | 1,000 | Stock of WELLYSUN INC. | $25,000 |
For the three-month period ended September 30, 2019: None.
Purchase price | ||||||
Trading Volume (In thousands of shares) | Transaction underlying | For the nine-month period ended September 30, 2019 | ||||
Associates | 500 | Stock of MATERIALS ANALYSIS TECHNOLOGY INC. | $32,923 |
68 |
Acquisition of intangible assets
Purchase price | ||||
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Associates | $32,121 | $54,543 |
Purchase price | ||||
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Associates | $223,682 | $234,283 |
c. | Others |
Mask expenditure
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Others | $368,195 | $588,850 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Others | $1,374,830 | $1,734,113 |
Other payables of mask expenditure
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Others | $421,973 | $683,892 | $676,755 |
d. | Key management personnel compensation |
For the three-month periods ended September 30, | ||||
2020 | 2019 | |||
Short-term employee benefits | $131,927 | $75,382 | ||
Post-employment benefits | 310 | 635 | ||
Share-based payment | 83,974 | 16,734 | ||
Others | 282 | 143 | ||
Total | $216,493 | $92,894 |
69 |
For the nine-month periods ended September 30, | ||||
2020 | 2019 | |||
Short-term employee benefits | $326,906 | $206,108 | ||
Post-employment benefits | 1,500 | 1,905 | ||
Termination benefits | 283 | 3,415 | ||
Share-based payment | 97,190 | 55,484 | ||
Others | 426 | 438 | ||
Total | $426,305 | $267,350 |
8. | ASSETS PLEDGED AS COLLATERAL |
The following table lists assets of the Company pledged as collateral:
As of September 30, 2020, December 31, 2019 and September 30, 2019
Carrying Amount | ||||||||||
As of | ||||||||||
Items | September 30, 2020 | December 31, 2019 | September 30, 2019 | Party to which asset(s) was pledged | Purpose of pledge | |||||
Refundable Deposits (Bank deposit and Time deposit) | $811,072 | $811,035 | $958,565 | Customs | Customs duty guarantee | |||||
Refundable Deposits (Time deposit) | 234,286 | 348,117 | 334,666 | Science Park Administration | Collateral for land lease | |||||
Refundable Deposits (Time deposit) | 18,215 | 19,510 | 19,510 | Science Park Administration | Collateral for dormitory lease | |||||
Refundable Deposits (Time deposit) | 41,785 | 41,785 | 41,785 | Liquefied Natural Gas Business Division, CPC Corporation, Taiwan | Energy resources guarantee | |||||
Refundable Deposits (Time deposit) | 1,000,000 | 1,000,000 | 1,000,000 | Bank of China | Bank performance guarantee | |||||
Refundable Deposits (Cash) | 137,597 | - | - | Taiwan Taichung District Court | Court security | |||||
Buildings | 5,137,005 | 5,381,590 | 5,489,658 | Taiwan Cooperative Bank and Secured Syndicated Loans from China Development Bank and 6 others | Collateral for long-term loans | |||||
Machinery and equipment | 14,562,867 | 19,029,077 | 20,631,644 | Taiwan Cooperative Bank, Mega International Commercial Bank and Secured Syndicated Loans from China Development Bank and 6 others | Collateral for long-term loans | |||||
Right-of-use assets | 283,975 | 292,120 | 296,273 | Secured Syndicated Loans from China Development Bank and 6 others | Collateral for long-term loans | |||||
Total | $22,226,802 | $26,923,234 | $28,772,101 |
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9. | SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS |
(1) | As of September 30, 2020, amounts available under unused letters of credit for importing machinery and equipment were NT$ 2.2 billion. |
(2) | As of September 30, 2020, the Company entrusted financial institutes to open performance guarantee, mainly related to the litigations and customs tax guarantee, amounting to NT$ 1.7 billion. |
(3) | The Company entered into several patent license agreements and development contracts of intellectual property for a total contract amount of approximately NT$ 3.5 billion. As of September 30, 2020, the portion of royalties and development fees not yet recognized was NT$ 1.1 billion. |
(4) | The Company entered into several construction contracts for the expansion of its operations. As of September 30, 2020, these construction contracts amounted to approximately NT$ 1.1 billion and the portion of the contracts not yet recognized was approximately NT$ 0.5 billion. |
(5) | The Board of Directors of UMC resolved in October 2014 to participate in a 3-way agreement with Xiamen Municipal People’s Government and FUJIAN ELECTRONIC & INFORMATION GROUP to form a company which will focus on 12’’ wafer foundry services. As of September 30, 2020, the Company obtained R.O.C. government authority’s approval for the investment and invested RMB 8.3 billion in USCXM according to the agreement, representing ownership interest of 65.22%. Furthermore, based on the agreement, UMC recognized a financial liability in other noncurrent liabilities-others for the purchase from the other investors of their investments in USCXM at their original investment cost plus interest totally amounting to RMB 4.9 billion, beginning from the seventh year (2022) following the last instalment payment made by the other investors. Accordingly, the Company recognizes non-controlling interests as required by IFRS 10 during the reporting period. At the end of each reporting period, the Company recognizes a financial liability for its commitment to the other investors in accordance with IFRS 9, at the same time derecognizing the non-controlling interests. Any difference between the financial liability and the non-controlling interests balance is recognized in equity. |
71 |
(6) | On August 31, 2017, the Taichung District Prosecutors Office indicted UMC based on the Trade Secret Act of R.O.C., alleging that employees of UMC misappropriated the trade secrets of MICRON TECHNOLOGY, INC. (“MICRON”). On June 12, 2020, an adverse ruling issued by the District Court of Taichung in a suit alleged that UMC, two of its current employees and a former employee engaged in the misappropriation of trade secrets. The Company does not expect material financial impact resulting from this claim. UMC intends to appeal against the sentence. |
On December 5, 2017, MICRON filed a civil action with similar cause against UMC with the United States District Court, Northern District of California. MICRON claimed entitlement to the actual damages, treble damages and relevant fees and requested the court to issue an order that enjoins UMC from using its trade secrets in question. UMC has appointed counsels to prepare answers against these charges. Currently the civil complaint has been stayed by the court.
On January 12, 2018, UMC filed three patent infringement actions with the Fuzhou Intermediate People’s Court against, among others, MICRON (XI’AN) CO., LTD. and MICRON (SHANGHAI) TRADING CO., LTD., requesting the court to order the defendants to stop manufacturing, processing, importing, selling, and committing to sell the products deploying the infringing patents in questions, and also to destroy all inventories and related molds and tools. On July 3, 2018, the Fuzhou Intermediate People’s Court granted preliminary injunction against the aforementioned two defendants, holding that the two defendants must immediately cease to manufacture, sell, and import products that infringe the patent rights of UMC. The court has approved withdrawal of one of the patent infringement actions on our motion while the other two actions are still on trial.
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On November 1, 2018, the Department of Justice of the United States (“DOJ”) unsealed an indictment against UMC, FUJIAN JINHUA INTEGRATED CIRCUIT CO., LTD. (“JINHUA”), and three individuals, including one current employee and two former employees of UMC, alleging that UMC and others conspired to steal trade secrets of MICRON, and used that information to develop technology that was subsequently transferred to JINHUA. On the same day, the DOJ filed a civil complaint enjoining the aforementioned defendants from exporting to the United States any products containing DRAM manufactured by UMC or JINHUA and preventing the defendants from transferring the trade secrets to anyone else. Besides, UMC has suspended the joint technology development activities with JINHUA. With respect to the criminal proceedings, on October 22, 2020, UMC filed a sentencing memorandum with the court, proposing to plead guilty to a lesser charge and to pay a fine of US$60 million. On October 29, 2020, the court approved the above-mentioned sentencing memorandum submitted by UMC. The parallel civil suit will be dismissed. UMC has recorded the fine in other losses.
(7) | On March 14, 2019, a putative class action styled Meyer v. United Microelectronics Corporation and several executives, was filed under Securities Exchange Act of 1934 and Rule 10b-5 in the United States District Court for the Southern District of New York. The court appointed a lead plaintiff and approved lead plaintiff counsels on May 23, 2019. On September 27, 2019, UMC received the service of plaintiffs’ amended complaint and appointed counsels to prepare the relevant procedures. Currently the mediation process has been completed and a court hearing will take place in January, 2021. The Company does not expect material financial impact resulting from this claim. |
10. | SIGNIFICANT DISASTER LOSS |
None.
11. | SIGNIFICANT SUBSEQUENT EVENTS |
(1) | Given the continuous downturn in the solar cell industry with losses many years; in order to avoid greater losses and protect shareholders’ interests, the Company’s subsidiary, NEXPOWER TECHNOLOGY CORP., decided to liquidate and dissolve with the resolutions of the Board of Directors meeting held on October 16, 2020. |
(2) | The Company accrued the losses for the charges brought by the U.S. Department of Justice regarding allegation of conspiracy to engage in theft of trade secrets. Please refer to Note 9(6). |
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12. | OTHERS |
(1) | Categories of financial instruments |
As of | ||||||
Financial Assets | September 30, 2020 | December 31, 2019 | September 30, 2019 | |||
Financial assets at fair value through profit or loss | $ 14,447,514 | $14,021,473 | $13,019,172 | |||
Financial assets at fair value through other comprehensive income | 7,957,265 | 14,723,232 | 16,227,393 | |||
Financial assets measured at amortized cost | ||||||
Cash and cash equivalents (excludes cash on hand) | 98,833,303 | 95,486,403 | 86,748,646 | |||
Receivables | 27,709,718 | 26,383,212 | 24,156,565 | |||
Refundable deposits | 2,492,246 | 2,600,733 | 2,749,204 | |||
Other financial assets | 9,960,095 | 2,353,066 | 17,786,173 | |||
Total | $161,400,141 | $155,568,119 | $160,687,153 |
As of | ||||||
Financial Liabilities | September 30, 2020 | December 31, 2019 | September 30, 2019 | |||
Financial liabilities measured at amortized cost | ||||||
Short-term loans | $7,571,645 | $12,015,206 | $16,482,956 | |||
Payables | 31,838,924 | 27,342,495 | 21,867,022 | |||
Provisions | 1,749,003 | - | - | |||
Guarantee deposits (current portion included) | 225,161 | 296,694 | 286,187 | |||
Bonds payable (current portion included) | 18,689,686 | 38,781,416 | 39,152,728 | |||
Long-term loans (current portion included) | 39,592,377 | 33,902,074 | 39,676,118 | |||
Lease liabilities | 5,735,724 | 6,031,025 | 5,725,891 | |||
Other financial liabilities | 20,144,554 | 20,093,441 | 20,170,972 | |||
Total | $125,547,074 | $138,462,351 | $143,361,874 |
(2) | Financial risk management objectives and policies |
The Company’s risk management objectives are to manage the market risk, credit risk and liquidity risk related to its operating activities. The Company identifies, measures and manages the aforementioned risks based on policy and risk preference.
74 |
The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.
(3) | Market risk |
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks comprise currency risk, interest rate risk and other price risk (such as equity price risk).
Foreign currency risk
The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.
The Company applies natural hedges on the foreign currency risk arising from purchases or sales, and utilizes spot or forward exchange contracts to manage foreign currency risk and the net effect of the risks related to monetary financial assets and liabilities is minor. The notional amounts of the foreign currency contracts are the same as the amount of the hedged items. In principle, the Company does not carry out any forward exchange contracts for uncertain commitments. The Company designates certain forward currency contracts as cash flow hedges to hedge its exposure to foreign currency exchange risk associated with certain highly probable forecast transactions. On the basis of assessment, the Company expects that the value of forward currency exchange contracts and the value of the hedged transactions will change systematically in opposite directions for given changes in foreign exchange rates. Hedge ineffectiveness in these hedging relationships mainly arises from the counterparties’ credit risk, impacting the fair value movements of the hedging instruments and hedged items. No other sources of ineffectiveness emerged from these hedging relationships. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.
Certain forward exchange contracts designated by the Company to hedge foreign currency exchange rate risks associated with the purchase of additional shares of USJC in JPY, amounting to JPY 23 billion, expired prior to December 31, 2018. The cash flow hedge reserve in other components of equity, amounting to NT$(3) million, was recognized as consideration for the ownership interest of 84.1% in USJC on October 1, 2019. Please refer to Note 6(27).
75 |
The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. When NTD strengthens/weakens against USD by 10%, the profit for the nine-month periods ended September 30, 2020 and 2019 decreases/increases by NT$754 million and NT$1,053 million, respectively. When RMB strengthens/weakens against USD by 10%, the profit for the nine-month periods ended September 30, 2020 and 2019 increases/decreases by NT$2,030 million and NT$2,486 million, respectively.
Interest rate risk
The Company is exposed to interest rate risk arising from borrowing at floating interest rates. All of the Company’s bonds have fixed interest rates and are measured at amortized cost. As such, changes in interest rates would not affect the future cash flows. On the other hand, as the interest rates of the Company’s short-term and long-term bank loans are floating, changes in interest rates would affect the future cash flows but not the fair value. Please refer to Note 6(11), 6(12) and 6(13) for the range of interest rates of the Company’s bonds and bank loans.
At the reporting dates, a change of 10 basis points of interest rate in a reporting period could cause the profit for the nine-month periods ended September 30, 2020 and 2019 to decrease/increase by NT$35 million and NT$42 million, respectively.
Equity price risk
The Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future performance of equity markets. The Company’s equity investments are classified as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income.
The sensitivity analysis for the equity instruments is based on the change in fair value as of the reporting date. A change of 5% in the price of the aforementioned financial assets at fair value through profit or loss of listed companies could increase/decrease the Company’s profit for the nine-month periods ended September 30, 2020 and 2019 by NT$238 million and NT$208 million, respectively. A change of 5% in the price of the aforementioned financial assets at fair value through other comprehensive income of listed companies could increase/decrease the Company’s other comprehensive income for the nine-month periods ended September 30, 2020 and 2019 by NT$337 million and NT$ 645 million, respectively.
(4) | Credit risk management |
The Company only trades with approved and creditworthy third parties. Where the Company trades with third parties which have less credit, it will request collateral from them. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, notes and accounts receivable balances are monitored on an ongoing basis to decrease the Company’s exposure to credit risk.
76 |
The Company mitigates the credit risks from financial institutions by limiting its counter parties to only reputable domestic or international financial institutions with good credit standing and spreading its holdings among various financial institutions. The Company’s exposure to credit risk arising from the default of counter-parties is limited to the carrying amount of these instruments.
As of September 30, 2020, December 31, 2019 and September 30, 2019, accounts receivable from the top ten customers represent 60%, 44% and 52% of the total accounts receivable of the Company, respectively. The credit concentration risk of other accounts receivable is insignificant.
(5) | Liquidity risk management |
The Company’s objectives are to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank loans, bonds and lease.
The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity:
As of September 30, 2020 | ||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||
Non-derivative financial liabilities | ||||||||||
Short-term loans | $7,659,954 | $- | $- | $- | $7,659,954 | |||||
Payables | 31,470,934 | - | - | - | 31,470,934 | |||||
Provisions | 1,749,003 | - | - | - | 1,749,003 | |||||
Guarantee deposits | 774 | 87,516 | 67,045 | 69,826 | 225,161 | |||||
Bonds payable | 2,377,544 | 8,506,918 | 8,594,758 | - | 19,479,220 | |||||
Long-term loans | 7,908,402 | 20,718,861 | 14,213,951 | 2,976 | 42,844,190 | |||||
Lease liabilities | 702,093 | 1,301,348 | 1,124,345 | 3,506,982 | 6,634,768 | |||||
Other financial liabilities | - | 16,700,667 | 4,175,390 | - | 20,876,057 | |||||
Total | $51,868,704 | $47,315,310 | $28,175,489 | $3,579,784 | $130,939,287 |
77 |
As of December 31, 2019 | ||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||
Non-derivative financial liabilities | ||||||||||
Short-term loans | $12,211,621 | $- | $- | $- | $12,211,621 | |||||
Payables | 26,907,755 | 198,862 | - | - | 27,106,617 | |||||
Guarantee deposits | 100,584 | 97,108 | - | 99,002 | 296,694 | |||||
Bonds payable | 20,659,607 | 10,590,265 | 8,689,971 | - | 39,939,843 | |||||
Long-term loans | 6,104,795 | 19,631,931 | 13,097,986 | 12,000 | 38,846,712 | |||||
Lease liabilities | 740,939 | 1,413,978 | 1,180,955 | 3,792,192 | 7,128,064 | |||||
Other financial liabilities | - | 12,668,287 | 8,445,826 | - | 21,114,113 | |||||
Total | $66,725,301 | $44,600,431 | $31,414,738 | $3,903,194 | $146,643,664 |
As of September 30, 2019 | ||||||||||
Less than 1 year | 2 to 3 years | 4 to 5 years | > 5 years | Total | ||||||
Non-derivative financial liabilities | ||||||||||
Short-term loans | $16,595,592 | $- | $- | $- | $16,595,592 | |||||
Payables | 21,063,569 | 206,555 | - | - | 21,270,124 | |||||
Guarantee deposits | 26,531 | 176,247 | - | 83,409 | 286,187 | |||||
Bonds payable | 21,121,105 | 8,621,189 | 7,321,603 | 3,400,206 | 40,464,103 | |||||
Long-term loans | 4,641,067 | 22,894,474 | 13,314,620 | 4,591,531 | 45,441,692 | |||||
Lease liabilities | 640,999 | 1,264,618 | 1,151,159 | 3,808,533 | 6,865,309 | |||||
Other financial liabilities | - | 12,776,139 | 8,517,730 | - | 21,293,869 | |||||
Total | $64,088,863 | $45,939,222 | $30,305,112 | $11,883,679 | $152,216,876 |
(6) | Foreign currency risk management |
78 |
UMC entered into forward exchange contracts for hedging the exchange rate risk arising from the net monetary assets or liabilities denominated in foreign currency. The details of forward exchange contracts entered into by UMC are summarized as follows:
As of September 30, 2020
Type | Notional Amount | Contract Period | ||
Forward exchange contracts | Sell USD 6 million | September 18, 2020~October 15, 2020 |
As of December 31, 2019 and September 30, 2019
None.
(7) | Fair value of financial instruments |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;
79 |
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
a. | Assets and liabilities measured and recorded at fair value on a recurring basis: |
As of September 30, 2020 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets: | ||||||||
Financial assets at fair value through profit or loss, current | $793,014 | $1,345 | $121,719 | $916,078 | ||||
Financial assets at fair value through profit or loss, noncurrent | 4,548,562 | 262,618 | 8,720,256 | 13,531,436 | ||||
Financial assets at fair value through other comprehensive income, noncurrent | 6,738,616 | - | 1,218,649 | 7,957,265 |
As of December 31, 2019 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets: | ||||||||
Financial assets at fair value through profit or loss, current | $668,476 | $- | $54,318 | $722,794 | ||||
Financial assets at fair value through profit or loss, noncurrent | 4,737,027 | 340,255 | 8,221,397 | 13,298,679 | ||||
Financial assets at fair value through other comprehensive income, noncurrent | 13,417,308 | - | 1,305,924 | 14,723,232 |
80 |
As of September 30, 2019 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets: | ||||||||
Financial assets at fair value through profit or loss, current | $575,792 | $58,148 | $- | $633,940 | ||||
Financial assets at fair value through profit or loss, noncurrent | 4,187,843 | 70,421 | 8,126,968 | 12,385,232 | ||||
Financial assets at fair value through other comprehensive income, noncurrent | 12,890,850 | - | 3,336,543 | 16,227,393 |
Fair values of financial assets at fair value through profit or loss and financial assets at fair value
through other comprehensive income that are categorized into level 1 are based on the quoted market prices in active markets. If there is no active market, the Company estimates the fair value by using the valuation techniques (income approach and market approach) in consideration of cash flow forecast, recent fund raising activities, valuation of similar companies, individual company’s development, market conditions and other economic indicators. If there are restrictions on the sale or transfer of a financial asset, which are a characteristic of the asset, the fair value of the asset will be determined based on similar but unrestricted financial assets’ quoted market price with appropriate discounts for the restrictions. To measure fair values, if the lowest level input that is significant to the fair value measurement is directly or indirectly observable, then the financial assets are classified as Level 2 of the fair value hierarchy, otherwise as Level 3.
During the nine-month periods ended September 30, 2020 and 2019, there were no significant transfers between Level 1 and Level 2 fair value measurements.
Reconciliations for fair value measurement in Level 3 fair value hierarchy were as follows:
Financial assets at fair value through profit or loss | Financial assets at fair value through other comprehensive income | |||||||||||||||
Common stock | Preferred stock | Funds | Convertible bonds | Total | Common stock | Preferred stock | Total | |||||||||
As of January 1, 2020 | $2,880,688 | $3,279,294 | $2,011,025 | $104,708 | $8,275,715 | $1,130,430 | $175,494 | $1,305,924 | ||||||||
Recognized in profit (loss) | (82,819) | 65,519 | (22,948) | 37,577 | (2,671) | - | - | - | ||||||||
Recognized in other comprehensive income (loss) | - | - | - | - | - | (24,220) | (63,055) | (87,275) | ||||||||
Acquisition | 523,838 | 266,375 | 178,006 | 293,777 | 1,261,996 | - | - | - | ||||||||
Disposal | (255,544) | (171,839) | - | (108,162) | (535,545) | - | - | - | ||||||||
Return of capital | (1,903) | - | - | - | (1,903) | - | - | - | ||||||||
Transfer out of Level 3 | (35,000) | - | - | - | (35,000) | - | - | - | ||||||||
Exchange effect | (21,873) | (60,061) | (36,473) | (2,210) | (120,617) | - | - | - | ||||||||
As of September 30, 2020 | $3,007,387 | $3,379,288 | $2,129,610 | $325,690 | $8,841,975 | $1,106,210 | $112,439 | $1,218,649 |
81 |
Financial assets at fair value through profit or loss | Financial assets at fair value through other comprehensive income | |||||||||||||||
Common stock | Preferred stock | Funds | Option | Total | Common stock | Preferred stock | Total | |||||||||
As of January 1, 2019 | $3,077,691 | $2,971,528 | $1,849,788 | $- | $7,899,007 | $3,235,174 | $184,026 | $3,419,200 | ||||||||
Recognized in profit (loss) | (118,983) | 287,431 | (41,609) | - | 126,839 | - | - | - | ||||||||
Recognized in other comprehensive income (loss) | - | - | - | - | - | (72,881) | (9,776) | (82,657) | ||||||||
Acquisition | 124,477 | 110,751 | 139,218 | - | 374,446 | - | - | - | ||||||||
Disposal | (1,475) | (280,716) | - | - | (282,191) | - | - | - | ||||||||
Return of capital | (14,954) | - | - | - | (14,954) | - | - | - | ||||||||
Exchange effect | 5,805 | 14,955 | 3,061 | - | 23,821 | - | - | - | ||||||||
As of September 30, 2019 | $3,072,561 | $3,103,949 | $1,950,458 | $- | $8,126,968 | $3,162,293 | $174,250 | $3,336,543 |
Recognized as part of profit (loss) above, the profit (loss) from financial assets still held by the Company as of September 30, 2020 and 2019 were NT$(111) million and NT$20 million, respectively.
The Company’s policy to recognize the transfer into and out of fair value hierarchy levels is based on the event or changes in circumstances that caused the transfer.
Significant unobservable inputs of fair value measurement in Level 3 fair value hierarchy were as follow:
82 |
As of September 30, 2020 | ||||||||||
Category of equity securities | Valuation technique | Significant unobservable inputs | Quantitative information | Interrelationship between inputs and fair value | Sensitivity analysis of interrelationship between inputs and fair value | |||||
Unlisted stock | Market Approach | Discount for lack of marketability | 0%~50% | The greater degree of lack of marketability, the lower the estimated fair value is determined. | A change of 5% in the discount for lack of marketability of the aforementioned fair values of unlisted stocks could decrease/increase the Company’s profit (loss) for the nine-month period ended September 30, 2020 by NT$223 million and NT$ 274 million, respectively, and decrease/increase the Company’s other comprehensive income (loss) for the nine-month period ended September 30, 2020 by NT$ 89 million. |
As of September 30, 2019 | ||||||||||
Category of equity securities | Valuation technique | Significant unobservable inputs | Quantitative information | Interrelationship between inputs and fair value | Sensitivity analysis of interrelationship between inputs and fair value | |||||
Unlisted stock | Market Approach | Discount for lack of marketability | 0%~50% | The greater degree of lack of marketability, the lower the estimated fair value is determined. | A change of 5% in the discount for lack of marketability of the aforementioned fair values of unlisted stocks could decrease/increase the Company’s profit (loss) for the nine-month period ended September 30, 2019 by NT$261 million and NT$203 million, respectively, and decrease/increase the Company’s other comprehensive income (loss) for the nine-month period ended September 30, 2019 by NT$229 million. |
83 |
b. | Assets and liabilities not recorded at fair value but for which fair value is disclosed: |
The fair value of bonds payable is estimated by the market price or using a valuation model. The model uses market-based observable inputs including share price, volatility, credit spread and risk-free interest rates. The fair value of long-term loans is determined using discounted cash flow model, based on the Company’s current incremental borrowing rates of similar loans.
The fair values of the Company’s short-term financial instruments including cash and cash equivalents, receivables, refundable deposits, other financial assets-current, short-term loans, payables and guarantee deposits approximate their carrying amount due to their maturities within one year.
As of September 30, 2020
Fair value measurements during reporting period using | ||||||||||
Items | Fair value | Level 1 | Level 2 | Level 3 | Carrying amount | |||||
Bonds payables (current portion included) | $18,815,012 | $18,815,012 | $- | $- | $18,689,686 | |||||
Long-term loans (current portion included) | 39,592,377 | - | 39,592,377 | - | 39,592,377 |
As of December 31, 2019
84 |
Fair value measurements during reporting period using | ||||||||||
Items | Fair value | Level 1 | Level 2 | Level 3 | Carrying amount | |||||
Bonds payables (current portion included) | $39,571,920 | $21,347,047 | $18,224,873 | $- | $38,781,416 | |||||
Long-term loans (current portion included) | 33,902,074 | - | 33,902,074 | - | 33,902,074 |
As of September 30, 2019
Fair value measurements during reporting period using | ||||||||||
Items | Fair value | Level 1 | Level 2 | Level 3 | Carrying amount | |||||
Bonds payables (current portion included) | $39,499,496 | $21,351,142 | $18,148,354 | $- | $39,152,728 | |||||
Long-term loans (current portion included) | 39,676,118 | - | 39,676,118 | - | 39,676,118 |
(3) | Significant financial assets and liabilities denominated in foreign currencies |
As of | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | ||||||
Financial Assets | |||||||||||
Monetary items | |||||||||||
USD | $2,145,556 | 29.05 | $62,328,393 | $1,692,380 | 30.03 | $50,822,171 | |||||
JPY | 29,958,641 | 0.2739 | 8,205,671 | 29,531,053 | 0.2751 | 8,123,993 | |||||
EUR | 9,659 | 33.98 | 328,208 | 3,795 | 33.54 | 127,266 | |||||
SGD | 44,918 | 21.19 | 951,785 | 66,197 | 22.28 | 1,474,870 | |||||
RMB | 5,048,669 | 4.25 | 21,441,695 | 5,262,546 | 4.30 | 22,607,898 | |||||
Non-Monetary items | |||||||||||
USD | 260,523 | 29.05 | 7,568,190 | 239,131 | 30.03 | 7,181,098 | |||||
JPY | 289,190 | 0.2739 | 79,209 | 441,322 | 0.2751 | 121,408 | |||||
SGD | 5,306 | 21.19 | 112,439 | 7,877 | 22.28 | 175,494 | |||||
RMB | 44,208 | 4.25 | 187,750 | 38,533 | 4.30 | 165,537 | |||||
Financial Liabilities | |||||||||||
Monetary items | |||||||||||
USD | 414,383 | 29.15 | 12,079,130 | 312,437 | 30.13 | 9,413,712 | |||||
JPY | 19,960,356 | 0.2780 | 5,548,979 | 21,495,694 | 0.2792 | 6,001,598 | |||||
EUR | 7,812 | 34.38 | 268,550 | 4,720 | 33.94 | 160,193 | |||||
SGD | 93,461 | 21.37 | 1,997,265 | 82,303 | 22.46 | 1,848,507 | |||||
RMB | 13,830,195 | 4.30 | 59,428,342 | 14,816,473 | 4.35 | 64,392,390 | |||||
The exchange gain or loss from monetary financial assets and liabilities | |||||||||||
USD | (540,449) | (374,319) | |||||||||
JPY | (159,747) | 568,061 | |||||||||
EUR | 3,881 | 6,208 | |||||||||
SGD | (25,876) | (22,530) | |||||||||
RMB | 422,817 | (417,725) | |||||||||
Other | 94 | 1,681 |
85 |
As of | ||||||
September 30, 2019 | ||||||
Foreign Currency (thousand) | Exchange Rate | NTD (thousand) | ||||
Financial Assets | ||||||
Monetary items | ||||||
USD | $1,606,285 | 30.97 | $49,746,660 | |||
JPY | 59,060,008 | 0.2859 | 16,885,257 | |||
EUR | 2,831 | 33.69 | 95,375 | |||
SGD | 51,424 | 22.37 | 1,150,336 | |||
RMB | 4,923,881 | 4.33 | 21,335,178 | |||
Non-Monetary items | ||||||
USD | 225,694 | 30.97 | 6,989,722 | |||
JPY | 7,704,588 | 0.2859 | 2,202,741 | |||
SGD | 7,789 | 22.37 | 174,250 | |||
RMB | 48,761 | 4.33 | 211,281 | |||
Financial Liabilities | ||||||
Monetary items | ||||||
USD | 299,707 | 31.07 | 9,311,908 | |||
JPY | 18,798,022 | 0.2900 | 5,451,427 | |||
EUR | 4,184 | 34.09 | 142,647 | |||
SGD | 89,113 | 22.55 | 2,009,475 | |||
RMB | 16,112,098 | 4.38 | 70,619,325 | |||
The exchange gain or loss from monetary financial assets and liabilities | ||||||
USD | 254,777 | |||||
JPY | 38,977 | |||||
EUR | 6,722 | |||||
SGD | (6,719) | |||||
RMB | (722,579) | |||||
Other | 1,841 |
86 |
(9) | Significant intercompany transactions among consolidated entities for the nine-month periods ended September 30, 2020 and 2019 are disclosed in Attachment 1. |
(10) | Capital management |
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios to support its business and maximize the stockholders’ value. The Company also ensures its ability to operate continuously to provide returns to stockholders and the interests of other related parties, while maintaining the optimal capital structure to reduce costs of capital.
To maintain or adjust the capital structure, the Company may adjust the dividend payment to stockholders, return capital to stockholders, issue new shares or dispose assets to redeem liabilities.
Similar to its peers, the Company monitors its capital based on debt to capital ratio. The ratio is calculated as the Company’s net debt divided by its total capital. The net debt is derived by taking the total liabilities on the consolidated balance sheets minus cash and cash equivalents. The total capital consists of total equity (including capital, additional paid-in capital, retained earnings, other components of equity and non-controlling interests) plus net debt.
87 |
The Company’s strategy, which is unchanged for the reporting periods, is to maintain a reasonable ratio in order to raise capital with reasonable cost. The debt to capital ratios as of September 30, 2020, December 31, 2019 and September 30, 2019 were as follows:
As of | ||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||
Total liabilities | $147,328,966 | $162,972,943 | $169,000,173 | |||
Less: Cash and cash equivalents | (98,839,079) | (95,492,477) | (86,754,723) | |||
Net debt | 48,489,887 | 67,480,466 | 82,245,450 | |||
Total equity | 220,914,963 | 207,214,422 | 205,044,294 | |||
Total capital | $269,404,850 | $274,694,888 | $287,289,744 | |||
Debt to capital ratios | 18.00% | 24.57% | 28.63% |
13. | ADDITIONAL DISCLOSURES |
(1) | The following are additional disclosures for the Company and its affiliates as required by the R.O.C. Securities and Futures Bureau: |
a. | Financing provided to others for the nine-month period ended September 30, 2020: Please refer to Attachment 2. |
b. | Endorsement/Guarantee provided to others for the nine-month period ended September 30, 2020: Please refer to Attachment 3. |
c. | Securities held as of September 30, 2020 (excluding subsidiaries, associates and joint venture): Please refer to Attachment 4. |
d. | Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020: Please refer to Attachment 5. |
e. | Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020: Please refer to Attachment 6. |
88 |
f. | Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020: Please refer to Attachment 7. |
g. | Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020: Please refer to Attachment 8. |
h. | Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of September 30, 2020: Please refer to Attachment 9. |
i. | Names, locations and related information of investees as of September 30, 2020 (excluding investment in Mainland China): Please refer to Attachment 10. |
j. | Financial instruments and derivative transactions: Please refer to Note 12. |
k. | Information of major shareholders as of September 30, 2020: Please refer to Attachment 12. |
(2) | Investment in Mainland China |
a. | Investee company name, main businesses and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, net income (loss) of investee company, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 11. |
b. | Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: Please refer to Attachment 1, 2, 3, 8 and 9. |
14. | OPERATING SEGMENT INFORMATION |
(1) | The Company determined its operating segments based on business activities with discrete financial information regularly reported through the Company’s internal reporting protocols to the Company’s chief operating decision maker. The Company is organized into business units based on its products and services. As of September 30, 2020, the Company had the following segments: wafer fabrication and new business. The operating segment information was prepared according to the accounting policies described in Note 4. The primary operating activity of the wafer fabrication segment is the manufacture of chips to the design specifications of our customers by using our own proprietary processes and techniques. The Company maintains a diversified customer base across industries, including communication, consumer electronics, computer, memory and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. New business segment primarily includes researching, developing, manufacturing, and providing solar energy. |
89 |
Reportable segment information for the three-month and nine-month periods ended September 30, 2020 and 2019 were as follows:
For the three-month period ended September 30, 2020 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||
Operating revenues from external customers | $44,868,187 | $2,267 | $44,870,454 | $- | $44,870,454 | |||||
Operating revenues from sales among intersegments | - | 941 | 941 | (941) | - | |||||
Segment net income (loss), net of tax | 8,935,876 | 1,111,287 | 10,047,163 | (1,037,575) | 9,009,588 | |||||
Acquisition of property, plant and equipment | 6,706,921 | - | 6,706,921 | - | 6,706,921 | |||||
Acquisition of intangible assets | 815,156 | - | 815,156 | - | 815,156 | |||||
Cash payments for the principal portion of the lease liability | 178,201 | 4,650 | 182,851 | - | 182,851 | |||||
Depreciation | 11,474,609 | 4,329 | 11,478,938 | - | 11,478,938 | |||||
Share of profit or loss of associates and joint ventures | 3,816,050 | - | 3,816,050 | (1,037,575) | 2,778,475 | |||||
Income tax expense (benefit) | 197,051 | (83) | 196,968 | - | 196,968 |
90 |
For the three-month period ended September 30, 2019 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||
Operating revenues from external customers | $37,730,926 | $7,514 | $37,738,440 | $- | $37,738,440 | |||||
Segment net income (loss), net of tax | 1,944,297 | (115,714) | 1,828,583 | 109,826 | 1,938,409 | |||||
Acquisition of property, plant and equipment | 3,550,237 | - | 3,550,237 | - | 3,550,237 | |||||
Acquisition of intangible assets | 731,761 | - | 731,761 | - | 731,761 | |||||
Cash payments for the principal portion of the lease liability | 150,264 | 4,638 | 154,902 | - | 154,902 | |||||
Depreciation | 11,499,367 | 33,878 | 11,533,245 | - | 11,533,245 | |||||
Share of profit or loss of associates and joint ventures | (921) | - | (921) | 109,826 | 108,905 | |||||
Income tax expense (benefit) | 17,845 | 21,131 | 38,976 | - | 38,976 |
For the nine-month period ended September 30, 2020 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||
Operating revenues from external customers | $131,515,985 | $8,576 | $131,524,561 | $- | $131,524,561 | |||||
Operating revenues from sales among intersegments | - | 3,463 | 3,463 | (3,463) | - | |||||
Segment net income (loss), net of tax | 16,222,383 | 1,034,015 | 17,256,398 | (965,487) | 16,290,911 | |||||
Acquisition of property, plant and equipment | 14,607,603 | - | 14,607,603 | - | 14,607,603 | |||||
Acquisition of intangible assets | 1,715,772 | - | 1,715,772 | - | 1,715,772 | |||||
Cash payments for the principal portion of the lease liability | 535,302 | 13,950 | 549,252 | - | 549,252 | |||||
Depreciation | 34,844,738 | 52,490 | 34,897,228 | - | 34,897,228 | |||||
Share of profit or loss of associates and joint ventures | 3,811,335 | - | 3,811,335 | (965,487) | 2,845,848 | |||||
Income tax expense (benefit) | 400,869 | 669 | 401,538 | - | 401,538 |
91 |
For the nine-month period ended September 30, 2019 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination | Consolidated | ||||||
Operating revenues from external customers | $106,292,701 | $59,882 | $106,352,583 | $- | $106,352,583 | |||||
Segment net income (loss), net of tax | 2,997,437 | (382,960) | 2,614,477 | 358,923 | 2,973,400 | |||||
Acquisition of property, plant and equipment | 13,016,979 | - | 13,016,979 | - | 13,016,979 | |||||
Acquisition of intangible assets | 1,508,795 | - | 1,508,795 | - | 1,508,795 | |||||
Cash payments for the principal portion of the lease liability | 435,152 | 14,005 | 449,157 | - | 449,157 | |||||
Depreciation | 35,057,561 | 104,131 | 35,161,692 | - | 35,161,692 | |||||
Share of profit or loss of associates and joint ventures | 146,990 | - | 146,990 | 358,923 | 505,913 | |||||
Income tax expense (benefit) | (222,738) | 20,517 | (202,221) | - | (202,221) | |||||
Impairment loss of non-financial assets | - | 85,202 | 85,202 | - | 85,202 |
As of September 30, 2020 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||
Segment assets | $367,919,914 | $1,075,236 | $368,995,150 | $(751,221) | $368,243,929 | |||||
Segment liabilities | $147,053,889 | $275,381 | $147,329,270 | $(304) | $147,328,966 |
As of December 31, 2019 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||
Segment assets | $369,189,983 | $924,149 | $370,114,132 | $73,233 | $370,187,365 | |||||
Segment liabilities | $161,955,970 | $1,157,878 | $163,113,848 | $(140,905) | $162,972,943 |
92 |
As of September 30, 2019 | ||||||||||
Wafer Fabrication | New Business | Subtotal | Adjustment and Elimination (Note) | Consolidated | ||||||
Segment assets | $372,982,212 | $1,011,150 | $373,993,362 | $51,105 | $374,044,467 | |||||
Segment liabilities | $167,921,280 | $1,199,138 | $169,120,418 | $(120,245) | $169,000,173 |
Note: | The adjustment primarily consisted of elimination entries for wafer fabrication segment’s investments in new business segment that was accounted for under the equity method. |
93 |
ATTACHMENT 1 (Significant intercompany transactions between consolidated entities) | ||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||
For the nine-month period ended September 30, 2020 | ||||||||||||||
Related party | Counterparty | Relationship with the Company (Note 2) | Transactions | |||||||||||
No. (Note 1) | Account | Amount | Collection periods (Note 3) | Percentage of consolidated operating revenues or consolidated total assets (Note 4) | ||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $37,403,247 | Net 60 days | 28% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 6,060,399 | - | 2% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 1,217,498 | Net 60 days | 1% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 862 | - | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Sales | 889,211 (Note 5) | Net 30 days | 1% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Accounts receivable | 14,936 | - | 0% | |||||||
1 | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | UMC GROUP (USA) | 3 | Sales | 615,732 | Net 60 days | 0% | |||||||
1 | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | UMC GROUP (USA) | 3 | Accounts receivable | 168,763 | - | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Sales | 105,599 | Net 60 days | 0% | |||||||
3 | UNITED SEMICONDUCTOR JAPAN CO., LTD. | UMC GROUP (USA) | 3 | Sales | 673,410 | Net 60 days | 1% | |||||||
3 | UNITED SEMICONDUCTOR JAPAN CO., LTD. | UMC GROUP (USA) | 3 | Accounts receivable | 458,808 | - | 0% | |||||||
�� | ||||||||||||||
For the nine-month period ended September 30, 2019 | ||||||||||||||
Related party | Counterparty | Relationship with the Company (Note 2) | Transactions | |||||||||||
No. (Note 1) | Account | Amount | Collection periods (Note 3) | Percentage of consolidated operating revenues or consolidated total assets (Note 4) | ||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Sales | $35,623,821 | Net 60 days | 33% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP (USA) | 1 | Accounts receivable | 7,753,210 | - | 2% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Sales | 2,998,535 | Net 60 days | 3% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UMC GROUP JAPAN | 1 | Accounts receivable | 608,413 | - | 0% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Sales | 907,467 (Note 5) | Net 30 days | 1% | |||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 1 | Accounts receivable | 28,914 | - | 0% | |||||||
1 | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | UMC GROUP (USA) | 3 | Sales | 570,409 | Net 60 days | 1% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Sales | 123,523 | Net 60 days | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP (USA) | 3 | Accounts receivable | 30,800 | - | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Sales | 179,689 | Net 60 days | 0% | |||||||
2 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UMC GROUP JAPAN | 3 | Accounts receivable | 48,505 | - | 0% | |||||||
Note 1: UMC and its subsidiaries are coded as follows: | ||||||||||||||
1. UMC is coded "0". | ||||||||||||||
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above. | ||||||||||||||
Note 2: Transactions are categorized as follows: | ||||||||||||||
1. The holding company to subsidiary. | ||||||||||||||
2. Subsidiary to holding company. | ||||||||||||||
3. Subsidiary to subsidiary. | ||||||||||||||
Note 3: The sales price to the above related parties was determined through mutual agreement in reference to market conditions. | ||||||||||||||
Note 4: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end. | ||||||||||||||
For profit or loss items, cumulative balances are used as basis. | ||||||||||||||
Note 5: UMC authorized technology licenses to its subsidiary, UNITED SEMICONDUCTOR (XIAMEN) CO., LTD., in the amount of USD 0.35 billion which was recognized as deferred revenue. | ||||||||||||||
Since it was a downstream transaction, the deferred revenue would be realized over time. |
94 |
ATTACHMENT 2 (Financing provided to others for the nine-month period ended September 30, 2020) | ||||||||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||||||||||||||||
Collateral | ||||||||||||||||||||||||||||||||
No. (Note 1) | Lender | Counter-party | Financial statement account | Related Party | Maximum balance for the period | Ending balance | Actual amount provided | Interest rate | Nature of financing | Amount of sales to (purchases from) counter-party | Reason for financing | Loss allowance | Limit of financing amount for individual counter-party (Note2) | Limit of total financing amount (Note2) | ||||||||||||||||||
Item | Value | |||||||||||||||||||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Other receivables - related parties | Yes | $13,072,500 | $5,810,000 | $2,033,500 | 0.91125%-2.56% | The need for short-term financing | $- | Business turnover | $- | None | $- | $22,076,146 | $88,304,582 | ||||||||||||||||
Note 1: The parent company and its subsidiaries are coded as follows: | ||||||||||||||||||||||||||||||||
(i) The parent company is coded "0". | ||||||||||||||||||||||||||||||||
(ii) The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above. | ||||||||||||||||||||||||||||||||
Note 2: Limit of financing amount for individual counter-party shall not exceed 10% of the lender's net assets value as of the period. | ||||||||||||||||||||||||||||||||
Limit of total financing amount shall not exceed 40% of the Company’s net asset value. |
95 |
ATTACHMENT 3 (Endorsement/Guarantee provided to others for the nine-month period ended September 30, 2020) | ||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||||
No. (Note 1) | Endorsor/Guarantor | Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 3) | Maximum balance for the period | Percentage of accumulated guarantee amount to net assets value from the latest financial statement | Limit of total guarantee/endorsement amount (Note 4) | ||||||||||||||
Company name | Releationship (Note 2) | Ending balance | Actual amount provided | Amount of collateral guarantee/endorsement | ||||||||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | NEXPOWER TECHNOLOGY CORP. | 2 | $99,342,655 | $748,000 | $748,000 (Note 5) | $- (Note 5) | $- | 0.34% | $99,342,655 | ||||||||||
0 | UNITED MICROELECTRONICS CORPORATION | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 2 | 99,342,655 | 16,373,599 | 16,373,599 (Note 6) | 12,329,688 (Note 6) | - | 7.42% | 99,342,655 | ||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | ||||||||||||||||||||
No. (Note 1) | Endorsor/Guarantor | Receiving party | Limit of guarantee/endorsement amount for receiving party (Note 7) | Maximum balance for the period | Percentage of accumulated guarantee amount to net assets value from the latest financial statement | Limit of total guarantee/endorsement amount (Note 7) | ||||||||||||||
Company name | Releationship (Note 2) | Ending balance | Actual amount provided | Amount of collateral guarantee/endorsement | ||||||||||||||||
1 | HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | 6 | $10,448,989 | $8,544,118 | $3,522,782 | $3,522,782 | $- | 15.17% | $10,448,989 | ||||||||||
Note 1: The parent company and its subsidiaries are coded as follows: | ||||||||||||||||||||
1. The parent company is coded "0". | ||||||||||||||||||||
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above. | ||||||||||||||||||||
Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following: | ||||||||||||||||||||
1. A company with which it does business. | ||||||||||||||||||||
2. A company in which the public company directly and indirectly holds more than 50% of the voting shares. | ||||||||||||||||||||
3. A company that directly and indirectly holds more than 50 % of the voting shares in the public company. | ||||||||||||||||||||
4. A company in which the public company holds, directly or indirectly, 90% or more of the voting shares. | ||||||||||||||||||||
5. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project. | ||||||||||||||||||||
6. A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. | ||||||||||||||||||||
7. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other. | ||||||||||||||||||||
Note 3: The amount of endorsements/guarantees shall not exceed 45% of the net worth of endorsor/guarantor; and the ceilings on the amount of endorsements/guarantees for any single entity are as follows: | ||||||||||||||||||||
1. The amount of endorsements/guarantees for any single entity shall not exceed 45% of net worth of endorsor/guarantor. | ||||||||||||||||||||
2. The amount of endorsements/guarantees for a company which endorsor/guarantor does business with, except the ceiling rules abovementioned shall not exceed the needed amounts arising from | ||||||||||||||||||||
business dealings which is the higher amount of total sales or purchase transactions between endorsor/guarantor and the receiving party. | ||||||||||||||||||||
The aggregate amount of endorsements/guarantees that the Company as a whole is permitted to make shall not exceed 45% of the Company's net worth, and the aggregate amount of | ||||||||||||||||||||
endorsements/guarantees for any single entity shall not exceed 45% of the Company's net worth. | ||||||||||||||||||||
Note 4: Limit of total guarantee/endorsement amount shall not exceed 45% of UMC's net assets value as of September 30, 2020. | ||||||||||||||||||||
Note 5: On December 24, 2014, the board of directors resolved to provide endorsement to NEXPOWER TECHNOLOGY CORP.'s syndicated loan from banks including Bank of Taiwan for the amount up to NT$1,700 million; the amount has been fully repaid in January 2019. | ||||||||||||||||||||
On December 12, 2018, the board of directors resolved to increase the endorsement amounted to NT$748 million; the amount has been fully repaid in September 2020. | ||||||||||||||||||||
Note 6: On Feburary 22, 2017, the board of directors resolved to guarantee UNITED SEMICONDUCTOR (XIAMEN) CO., LTD.'s syndicated loan from banks including China Development Bank in the amount up to USD 310 million. | ||||||||||||||||||||
On March 7, 2018, the board of directors resolved to increase the endorsement amounted to USD 152 million, on October 24, 2018, the board of directors resolved to increase the endorsement amounted to USD 41 million. | ||||||||||||||||||||
On July 24, 2019, the board of directors resolved to decrease the endorsement amounted to USD 26 million, on December 18, 2019, the board of directors resolved to decrease the endorsement amounted to USD 13 million. | ||||||||||||||||||||
On July 29, 2020, the board of directors resolved to decrease the endorsement amounted to USD 32 million and to increase the endorsement for short-term loans agreement amounted to CNY 900 million, total endorsement amount is up to USD 432 million and CNY 900 million. | ||||||||||||||||||||
As of September 30, 2020, actual amount provided was NT$12,330 million. | ||||||||||||||||||||
Note 7: Limit of total endorsed/guaranteed amount shall not exceed 45% of HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.'s net assets value as of September 30, 2020. | ||||||||||||||||||||
The amount of endorsements/guarantees for any single entity shall not exceed 45% of net worth of HEJIAN TECHNOLOGY (SUZHOU) CO., LTD.'s net assets value as of September 30, 2020. | ||||||||||||||||||||
The aggregate amount of endorsements/guarantees that the Company as a whole is permitted to make shall not exceed 45% of the Company's net worth, and the aggregate amount of | ||||||||||||||||||||
endorsements/guarantees for any single entity shall not exceed 45% of the Company's net worth. |
96 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | HUT 8 MINING CORP. | - | Financial assets at fair value through profit or loss, current | 4,000 | $84,790 | 4.14 | $84,790 | None | ||||||||||
Fund | MILLERFUL NO.1 REAL ESTATE INVESTMENT TRUST | - | Financial assets at fair value through profit or loss, current | 18,000 | 186,840 | 1.70 | 186,840 | None | ||||||||||
Stock | PIXART IMAGING, INC. | - | Financial assets at fair value through profit or loss, current | 1,600 | 284,800 | 1.15 | 284,800 | None | ||||||||||
Stock | PHISON ELECTRONICS CORP. | - | Financial assets at fair value through profit or loss, current | 586 | 154,997 | 0.30 | 154,997 | None | ||||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | - | Financial assets at fair value through profit or loss, current | 2,675 | 81,588 | 0.22 | 81,588 | None | ||||||||||
Stock | PIXTECH, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 9,883 | - | 17.63 | - | None | ||||||||||
Stock | UNITED FU SHEN CHEN TECHNOLOGY CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 17,511 | - | 15.75 | - | None | ||||||||||
Stock | HOLTEK SEMICONDUCTOR INC. | - | Financial assets at fair value through profit or loss, noncurrent | 22,144 | 1,428,305 | 9.79 | 1,428,305 | None | ||||||||||
Stock | OCTTASIA INVESTMENT HOLDING INC. | - | Financial assets at fair value through profit or loss, noncurrent | 6,692 | 402,404 | 9.29 | 402,404 | None | ||||||||||
Stock | UNITED INDUSTRIAL GASES CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 16,680 | 975,428 | 7.66 | 975,428 | None | ||||||||||
Stock | AMIC TECHNOLOGY CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 5,627 | - | 4.71 | - | None | ||||||||||
Stock | SUBTRON TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 12,521 | 148,997 | 4.31 | 148,997 | None | ||||||||||
Stock | KING YUAN ELECTRONICS CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 20,483 | 624,722 | 1.68 | 624,722 | None | ||||||||||
Stock | EPISTAR CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 10,715 | 378,775 | 0.98 | 378,775 | None | ||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,184 | 25,745 | 0.83 | 25,745 | None | ||||||||||
Stock | PROMOS TECHNOLOGIES INC. | - | Financial assets at fair value through profit or loss, noncurrent | 324 | - | 0.72 | - | None | ||||||||||
Stock-Preferred stock | TONBU, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 938 | - | - | - | None | ||||||||||
Stock-Preferred stock | AETAS TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,166 | - | - | - | None | ||||||||||
Stock-Preferred stock | TA SHEE GOLF & COUNTRY CLUB | - | Financial assets at fair value through profit or loss, noncurrent | 0 | 19,875 | - | 19,875 | None | ||||||||||
Stock | SILICON INTEGRATED SYSTEMS CORP. | The Company's director | Financial assets at fair value through other comprehensive income, noncurrent | 119,979 | 1,403,756 | 19.02 | 1,403,756 | None | ||||||||||
Stock | UNIMICRON HOLDING LIMITED | Associate | Financial assets at fair value through other comprehensive income, noncurrent | 20,000 | 659,435 | 12.67 | 659,435 | None | ||||||||||
Stock | ITE TECH. INC. | - | Financial assets at fair value through other comprehensive income, noncurrent | 13,960 | 968,822 | 8.67 | 968,822 | None | ||||||||||
Stock | NOVATEK MICROELECTRONICS CORP. | - | Financial assets at fair value through other comprehensive income, noncurrent | 16,445 | 4,366,038 | 2.70 | 4,366,038 | None | ||||||||||
Stock-Preferred stock | MTIC HOLDINGS PTE. LTD. | - | Financial assets at fair value through other comprehensive income, noncurrent | 12,000 | 112,439 | - | 112,439 | None |
97 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | DARCHUN VENTURE CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 1,514 | $2,075 | 19.65 | $2,075 | None | ||||||||||
Stock | SOLARGATE TECHNOLOGY CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 957 | - | 15.94 | - | None | ||||||||||
Fund | TRENDFORCE CAPITAL FUND SPC-TRENDFORCE CAPITAL FUND I SP | - | Financial assets at fair value through profit or loss, noncurrent | 15 | 55,842 | 15.06 | 55,842 | None | ||||||||||
Stock | CLIENTRON CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 9,478 | 174,868 | 14.90 | 174,868 | None | ||||||||||
Stock | TRONC-E CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,800 | - | 14.49 | - | None | ||||||||||
Stock | CENTERA PHOTONICS INC. | - | Financial assets at fair value through profit or loss, noncurrent | 3,750 | 35,400 | 11.69 | 35,400 | None | ||||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,500 | 17,175 | 10.23 | 17,175 | None | ||||||||||
Stock | ADVANCE MATERIALS CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 10,719 | 53,272 | 9.12 | 53,272 | None | ||||||||||
Stock | MONTJADE ENGINEERING CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,800 | 13,050 | 8.18 | 13,050 | None | ||||||||||
Stock | EXCELSIUS MEDICAL CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,500 | 42,000 | 7.50 | 42,000 | None | ||||||||||
Stock | NEW SMART TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 900 | 10,494 | 7.29 | 10,494 | None | ||||||||||
Stock | WIN WIN PRECISION TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 3,150 | 59,661 | 6.93 | 59,661 | None | ||||||||||
Stock | RISELINK VENTURE CAPITAL CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 11 | 1,619 | 6.67 | 1,619 | None | ||||||||||
Stock | LICO TECHNOLOGY CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 6,609 | - | 5.32 | - | None | ||||||||||
Stock | AMPAK TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 3,000 | 156,000 | 4.98 | 156,000 | None | ||||||||||
Stock | ACT GENOMICS HOLDINGS CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 4,600 | 155,813 | 4.74 | 155,813 | None | ||||||||||
Stock | EMPASS TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 300 | 5,757 | 4.53 | 5,757 | None | ||||||||||
Stock | TAIWAN AULISA MEDICAL DEVICES TECHNOLOGIES, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,114 | 7,131 | 4.47 | 7,131 | None | ||||||||||
Stock | MERIDIGEN BIOTECH CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 3,838 | 9,710 | 4.21 | 9,710 | None | ||||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | - | Financial assets at fair value through profit or loss, noncurrent | 6,374 | 222,767 | 3.72 | 222,767 | None | ||||||||||
Stock | SOLID STATE SYSTEM CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 3,000 | 61,650 | 3.71 | 61,650 | None | ||||||||||
Stock | SUBTRON TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 10,059 | 119,699 | 3.46 | 119,699 | None | ||||||||||
Stock | ANIMATION TECHNOLOGIES INC. | - | Financial assets at fair value through profit or loss, noncurrent | 265 | - | 3.16 | - | None | ||||||||||
Stock | TOPOINT TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 4,416 | 96,051 | 3.11 | 96,051 | None | ||||||||||
Fund | TRANSLINK CAPITAL PARTNERS IV, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 86,773 | 2.96 | 86,773 | None | ||||||||||
Stock | BRIGHT SHELAND INTERNATIONAL CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,200 | 44,160 | 2.87 | 44,160 | None | ||||||||||
Stock | TAIWAN SEMICONDUCTOR CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 6,741 | 242,743 | 2.70 | 242,743 | None |
98 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | CHITEC TECHNOLOGY CORP., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 627 | $14,233 | 2.15 | $14,233 | None | ||||||||||
Fund | VERTEX V (C.I.) FUND L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 64,082 | 2.07 | 64,082 | None | ||||||||||
Stock | FORMOSA PHARMACEUTICALS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,500 | 30,000 | 2.06 | 30,000 | None | ||||||||||
Stock | M3 TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 744 | 38,688 | 2.03 | 38,688 | None | ||||||||||
Stock | YUEN FOONG YU CONSUMER PRODUCTS CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 4,000 | 158,000 | 1.63 | 158,000 | None | ||||||||||
Stock | ACER E-ENABLING SERVICE BUSINESS INC. | - | Financial assets at fair value through profit or loss, noncurrent | 550 | 23,650 | 1.51 | 23,650 | None | ||||||||||
Stock | LINTES TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 615 | 81,180 | 1.08 | 81,180 | None | ||||||||||
Stock | WALTOP INTERNATIONAL CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 131 | 588 | 1.07 | 588 | None | ||||||||||
Stock | CRYSTALWISE TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 888 | 27,976 | 1.02 | 27,976 | None | ||||||||||
Stock | POWTEC ELECTROCHEMICAL CORP.(formerly POWERTEC ENERGY CORP.) | - | Financial assets at fair value through profit or loss, noncurrent | 9,930 | - | 0.70 | - | None | ||||||||||
Stock | TAIWANJ PHARMACEUTICALS CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 514 | 6,296 | 0.68 | 6,296 | None | ||||||||||
Stock | TIGERAIR TAIWAN CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,300 | 39,390 | 0.65 | 39,390 | None | ||||||||||
Stock | NORATECH PHARMACEUTICALS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,000 | 10,580 | 0.63 | 10,580 | None | ||||||||||
Stock | SOLAR APPLIED MATERIALS TECHNOLOGY CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 200 | 8,490 | 0.04 | 8,490 | None | ||||||||||
Stock | FORTEMEDIA, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 21 | 26 | 0.02 | 26 | None | ||||||||||
Convertible bonds | YEONG GUAN ENERGY TECHNOLOGY GROUP CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 100 | 10,800 | - | 10,800 | None | ||||||||||
Convertible bonds | IBASE TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 70 | 7,525 | - | 7,525 | None | ||||||||||
Stock-Preferred stock | EJOULE INTERNATIONAL LIMITED | - | Financial assets at fair value through profit or loss, noncurrent | 23,909 | 140,803 | - | 140,803 | None | ||||||||||
Stock-Preferred stock | FLOADIA CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 2 | 79,209 | - | 79,209 | None | ||||||||||
Stock-Preferred stock | CEREBREX, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1 | - | - | - | None | ||||||||||
Stock-Preferred stock | FORTEMEDIA, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 311 | 2,287 | - | 2,287 | None | ||||||||||
Stock-Preferred stock | ACEPODIA, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,449 | 29,050 | - | 29,050 | None | ||||||||||
Stock-Preferred stock | BRAVOTEK CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 2,250 | 57,519 | - | 57,519 | None | ||||||||||
Stock-Preferred stock | GEAR RADIO LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,400 | 50,402 | - | 50,402 | None | ||||||||||
Stock | SHIN-ETSU HANDOTAI TAIWAN CO., LTD. | - | Financial assets at fair value through other comprehensive income, noncurrent | 10,500 | 446,775 | 7.00 | 446,775 | None | ||||||||||
Stock | UNITED MICROELECTRONICS CORP. | Parent company | Financial assets at fair value through other comprehensive income, noncurrent | 16,079 | 459,048 | 0.13 | 459,048 | None | ||||||||||
Convertible bonds | TEAM GROUP INC. | - | Prepayments for investments | 440 | 47,743 | - | NA | None | ||||||||||
Convertible bonds | PCHOME ONLINE INC. | - | Prepayments for investments | 500 | 55,395 | - | NA | None |
99 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
TLC CAPITAL CO., LTD. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Convertible bonds | COLOR IMAGINATION HOLDING | - | Financial assets at fair value through profit or loss, current | - | $116,200 | - | $116,200 | None | ||||||||||
Fund | EVERYI CAPITAL ASIA FUND, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 151,064 | 18.18 | 151,064 | None | ||||||||||
Stock | BEAUTY ESSENTIALS INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 150,500 | 61,208 | 13.99 | 61,208 | None | ||||||||||
Fund | OAK HILL OPPORTUNITIES FUND, SEGREGATED PORTFOLIO | - | Financial assets at fair value through profit or loss, noncurrent | 13 | 333,790 | 13.00 | 333,790 | None | ||||||||||
Stock | WINKING ENTERTAINMENT LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 6,433 | 57,928 | 11.64 | 57,928 | None | ||||||||||
Stock | EVERGLORY RESOURCE TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,200 | 8,244 | 4.91 | 8,244 | None | ||||||||||
Stock | ADVANCE MATERIALS CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 5,435 | 27,011 | 4.62 | 27,011 | None | ||||||||||
Stock | EXCELLENCE OPTOELECTRONICS INC. | - | Financial assets at fair value through profit or loss, noncurrent | 7,752 | 270,936 | 4.53 | 270,936 | None | ||||||||||
Fund | TRANSLINK CAPITAL PARTNERS III, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 169,752 | 4.24 | 169,752 | None | ||||||||||
Stock | WELLYSUN INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,000 | 9,800 | 3.27 | 9,800 | None | ||||||||||
Stock | SUNDIA MEDITECH GROUP | - | Financial assets at fair value through profit or loss, noncurrent | 779 | 22,444 | 3.20 | 22,444 | None | ||||||||||
Fund | H&QAP GREATER CHINA GROWTH FUND, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 349 | 2.67 | 349 | None | ||||||||||
Stock | ACTI CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 900 | 3,267 | 2.43 | 3,267 | None | ||||||||||
Stock | HANDA PHARMACEUTICALS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,000 | 21,450 | 0.87 | 21,450 | None | ||||||||||
Stock | SIMPLO TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,422 | 426,034 | 0.77 | 426,034 | None | ||||||||||
Stock | TXC CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 1,978 | 142,811 | 0.64 | 142,811 | None | ||||||||||
Stock | LINTES TECHNOLOGY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 365 | 48,180 | 0.64 | 48,180 | None | ||||||||||
Stock | MATERIALS ANALYSIS TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 288 | 23,933 | 0.46 | 23,933 | None | ||||||||||
Stock | POWTEC ELECTROCHEMICAL CORP.(formerly POWERTEC ENERGY CORP.) | - | Financial assets at fair value through profit or loss, noncurrent | 6,470 | - | 0.46 | - | None | ||||||||||
Stock | YUEN FOONG YU CONSUMER PRODUCTS CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 1,000 | 39,500 | 0.41 | 39,500 | None | ||||||||||
Stock | EVERGREEN STEEL CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 1,000 | 45,700 | 0.25 | 45,700 | None | ||||||||||
Stock | VALUE VALVES CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 40 | 3,832 | 0.10 | 3,832 | None | ||||||||||
Convertible bonds | TECHCENTIAL INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 99 | 9,455 | - | 9,455 | None | ||||||||||
Convertible bonds | EJOULE INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | - | 152,324 | - | 152,324 | None | ||||||||||
Capital-Preferred stock | GUANGXI CHIPBETTER MICROELECTRONICS INC. | - | Financial assets at fair value through profit or loss, noncurrent | 672 | 48,619 | - | 48,619 | None | ||||||||||
Stock-Preferred stock | YOUJIA GROUP LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,685 | 3,726 | - | 3,726 | None |
100 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
TLC CAPITAL CO., LTD. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock-Preferred stock | ALO7 LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,377 | $278,594 | - | $278,594 | None | ||||||||||
Stock-Preferred stock | ADWO MEDIA HOLDINGS LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 5,332 | - | - | - | None | ||||||||||
Stock-Preferred stock | IMO, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 8,519 | - | - | - | None | ||||||||||
Stock-Preferred stock | HIGHLANDER FINANCIAL GROUP CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 26,499 | 103,155 | - | 103,155 | None | ||||||||||
Stock-Preferred stock | GAME VIDEO LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 279 | 146,815 | - | 146,815 | None | ||||||||||
Stock-Preferred stock | CLOUD MOMENT (CAYMAN) INC. | - | Financial assets at fair value through profit or loss, noncurrent | 359 | - | - | - | None | ||||||||||
Stock-Preferred stock | PLAYNITRIDE INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,739 | 194,756 | - | 194,756 | None | ||||||||||
Stock-Preferred stock | EJOULE INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 35,863 | 211,204 | - | 211,204 | None | ||||||||||
Stock-Preferred stock | TURNING POINT LASERS LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,000 | 60,193 | - | 60,193 | None | ||||||||||
Stock-Preferred stock | ARTERY TECHNOLOGY CORP. | Associate | Financial assets at fair value through profit or loss, noncurrent | 770 | 100,658 | - | 100,658 | None | ||||||||||
Stock-Preferred stock | JSAB HOLDING LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 667 | 29,050 | - | 29,050 | None | ||||||||||
Stock | ADVANCED ENERGY SOLUTION HOLDING CO., LTD. | - | Prepayments for investments | - | 4,069 | - | NA | None | ||||||||||
UMC CAPITAL CORP. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Convertible bonds | CLOUDWORDS, INC. | - | Financial assets at fair value through profit or loss, current | - | USD | 190 | - | USD | 190 | None | ||||||||
Capital | TRANSLINK MANAGEMENT III, L.L.C. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 775 | 14.33 | USD | 775 | None | ||||||||
Fund | TRANSLINK CAPITAL PARTNERS III, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 15,799 | 11.47 | USD | 15,799 | None | ||||||||
Stock | OCTTASIA INVESTMENT HOLDING INC. | - | Financial assets at fair value through profit or loss, noncurrent | 7,035 | USD | 14,562 | 9.76 | USD | 14,562 | None | ||||||||
Fund | TRANSLINK CAPITAL PARTNERS IV, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 8,961 | 8.87 | USD | 8,961 | None | ||||||||
Stock | ALL-STARS SP IV LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 7 | USD | 7,020 | 5.03 | USD | 7,020 | None | ||||||||
Fund | TRANSLINK CAPITAL PARTNERS II, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 1,675 | 4.53 | USD | 1,675 | None | ||||||||
Fund | GROVE VENTURES II, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 404 | 3.82 | USD | 404 | None | ||||||||
Fund | SIERRA VENTURES XI, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 3,761 | 1.76 | USD | 3,761 | None | ||||||||
Fund | STORM VENTURES FUND V, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 3,427 | 1.69 | USD | 3,427 | None | ||||||||
Fund | SIERRA VENTURES XII, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 427 | 1.38 | USD | 427 | None |
101 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
UMC CAPITAL CORP. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | ACHIEVE MADE INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 80 | USD | 78 | 0.46 | USD | 78 | None | ||||||||
Stock-Preferred stock | ACHIEVE MADE INTERNATIONAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,644 | USD | 8,204 | - | USD | 8,204 | None | ||||||||
Stock-Preferred stock | CNEX LABS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 3,920 | USD | 6,500 | - | USD | 6,500 | None | ||||||||
Stock-Preferred stock | GLYMPSE, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,349 | USD | 3,081 | - | USD | 3,081 | None | ||||||||
Stock-Preferred stock | ATSCALE, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 8,520 | USD | 7,484 | - | USD | 7,484 | None | ||||||||
Stock-Preferred stock | SENSIFREE LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 614 | USD | 1,228 | - | USD | 1,228 | None | ||||||||
Stock-Preferred stock | APPIER HOLDINGS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 64 | USD | 3,313 | - | USD | 3,313 | None | ||||||||
Stock-Preferred stock | DCARD HOLDINGS LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 27,819 | USD | 5,997 | - | USD | 5,997 | None | ||||||||
Stock-Preferred stock | NEXTINPUT, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 3,866 | USD | 1,344 | - | USD | 1,344 | None | ||||||||
Stock-Preferred stock | GCT SEMICONDUCTOR, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 175 | USD | 162 | - | USD | 162 | None | ||||||||
Stock-Preferred stock | FORTEMEDIA, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 12,241 | USD | 6,903 | - | USD | 6,903 | None | ||||||||
Stock-Preferred stock | SIFOTONICS TECHNOLOGIES CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 3,500 | USD | 8,000 | - | USD | 8,000 | None | ||||||||
Stock-Preferred stock | NEVO ENERGY, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 4,980 | - | - | - | None | ||||||||||
Stock-Preferred stock | NEXENTA SYSTEMS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 6,555 | - | - | - | None | ||||||||||
Stock-Preferred stock | CLOUDWORDS, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 9,461 | USD | 4,249 | - | USD | 4,249 | None | ||||||||
Stock-Preferred stock | EAST VISION TECHNOLOGY LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 2,770 | - | - | - | None | ||||||||||
Stock-Preferred stock | RENIAC, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 1,287 | USD | 2,266 | - | USD | 2,266 | None | ||||||||
Stock-Preferred stock | BLUESPACE.AI, INC. | - | Financial assets at fair value through profit or loss, noncurrent | 174 | USD | 300 | - | USD | 300 | None | ||||||||
Stock-Preferred stock | REED SEMICONDUCTOR CORP. | - | Financial assets at fair value through profit or loss, noncurrent | 3,352 | USD | 1,006 | - | USD | 1,006 | None | ||||||||
Stock-Preferred stock | A.A.A TARANIS VISUAL LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 4 | USD | 3,414 | - | USD | 3,414 | None | ||||||||
Convertible bonds | GLYMPSE, INC. | - | Financial assets at fair value through profit or loss, noncurrent | - | USD | 1,778 | - | USD | 1,778 | None | ||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | TIAN TAI PHOTOELECTRICITY CO., LTD. | - | Financial assets at fair value through profit or loss, noncurrent | 375 | $5,842 | 1.18 | $5,842 | None |
102 |
ATTACHMENT 4 (Securities held as of September 30, 2020) (Excluding subsidiaries, associates and joint ventures) | ||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Stock | PACIFIC-GREEN INTEGRATED TECHNOLOGY INC. | - | Financial assets at fair value through profit or loss, noncurrent | 54 | $- | 18.00 | $- | None | ||||||||||
SINO PARAGON LIMITED | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Fund | SPARKLABS GLOBAL VENTURES FUND I, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | $102,552 | 11.13 | $102,552 | None | ||||||||||
Fund | SPARKLABS KOREA FUND II, L.P. | - | Financial assets at fair value through profit or loss, noncurrent | - | 37,392 | 5.00 | 37,392 | None | ||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | ||||||||||||||||||
September 30, 2020 | ||||||||||||||||||
Type of securities | Name of securities | Relationship | Financial statement account | Units (thousand)/ bonds/ shares (thousand) | Carrying amount | Percentage of ownership (%) | Fair value/ Net assets value | Shares as collateral (thousand) | ||||||||||
Fund | LANHOR FUND | - | Financial assets at fair value through profit or loss, noncurrent | - | RMB | 32,760 | 9.71 | RMB | 32,760 | None |
103 |
ATTACHMENT 5 (Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020) | |||||||||||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||||||||||||
Type of securities | Name of the securities | Financial statement account | Counter-party | Relationship | Beginning balance | Addition | Disposal | Ending balance | |||||||||||||||||||||||||||
Units (thousand)/ bonds/shares (thousand) | Amount | Units (thousand)/ bonds/shares (thousand) | Amount | Units (thousand)/ bonds/shares (thousand) | Amount | Cost | Gain (Loss) from disposal | Units (thousand)/ bonds/shares (thousand) | Amount | ||||||||||||||||||||||||||
None |
104 |
ATTACHMENT 6 (Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020) | ||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||
Where counter-party is a related party, details of prior transactions | ||||||||||||||||||||||||
Name of properties | Transaction date | Transaction amount | Payment status | Counter-party | Relationship | Former holder of property | Relationship between former holder and acquirer of property | Date of transaction | Transaction amount | Price reference | Date of acquisition and status of utilization | Other commitments | ||||||||||||
None |
105 |
ATTACHMENT 7 (Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the nine-month period ended September 30, 2020) | |||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | |||||||||||||||||||||||
Names of properties | Transaction date | Date of original acquisition | Carrying amount | Transaction amount | Status of proceeds collection | Gain (Loss) from disposal | Counter-party | Relationship | Reason of disposal | Price reference | Other commitments | ||||||||||||
Construction plant and its facility equipment | June 16, 2020 | February 1, 2008~June 1, 2017 | $601,042 | $1,766,666 | Received | $1,081,497 | GENERAL INTERFACE SOLUTION LIMITED | None | In order to improve the company's operations and reduce the fixed costs. | The valuation report | None | ||||||||||||
106 |
ATTACHMENT 8 ( Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of capital stock for the nine-month period ended September 30, 2020) | ||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
UMC GROUP (USA) | Subsidiary | Sales | $37,403,247 | 37 | % | Net 60 days | N/A | N/A | $6,060,399 | 31 | % | |||||||||||||||
UMC GROUP JAPAN | Subsidiary | Sales | 1,217,498 | 1 | % | Net 60 days | N/A | N/A | 862 | 0 | % | |||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Subsidiary | Sales | 889,211 | 1 | % | Net 30 days | N/A | N/A | 14,936 | 0 | % | |||||||||||||||
FARADAY TECHNOLOGY CORPORATION | Associate | Sales | 821,682 | 1 | % | Month-end 60 days | N/A | N/A | 160,849 | 1 | % | |||||||||||||||
UMC GROUP (USA) | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | Parent company | Purchases | USD | 1,217,766 | 96 | % | Net 60 days | N/A | N/A | USD | 209,158 | 90 | % | |||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Associate | Purchases | USD | 21,300 | 2 | % | Net 60 days | N/A | N/A | USD | 5,835 | 3 | % | |||||||||||||
UNITED SEMICONDUCTOR JAPAN CO., LTD. | Associates | Purchases | USD | 20,112 | 2 | % | Net 60 days | N/A | N/A | USD | 15,831 | 7 | % | |||||||||||||
UMC GROUP JAPAN | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | Parent company | Purchases | JPY | 3,987,383 | 91 | % | Net 60 days | N/A | N/A | JPY | 3,146 | 100 | % | |||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Associate | Purchases | JPY | 370,700 | 9 | % | Net 60 days | N/A | N/A | - | - | |||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
FARADAY TECHNOLOGY CORPORATION | Associate | Sales | RMB | 133,710 | 7 | % | Net 45 days | N/A | N/A | RMB | 29,093 | 7 | % | |||||||||||||
UMC GROUP JAPAN | Associate | Sales | RMB | 24,750 | 1 | % | Net 60 days | N/A | N/A | - | - | |||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
UMC GROUP (USA) | Associate | Sales | RMB | 144,311 | 7 | % | Net 60 days | N/A | N/A | RMB | 39,737 | 7 | % | |||||||||||||
FARADAY TECHNOLOGY CORPORATION | Associate | Sales | RMB | 26,482 | 1 | % | Net 60 days | N/A | N/A | RMB | 16,233 | 3 | % | |||||||||||||
UNITED SEMICONDUCTOR JAPAN CO., LTD. | ||||||||||||||||||||||||||
Transactions | Details of non-arm's length transaction | Notes and accounts receivable (payable) | Note | |||||||||||||||||||||||
Counter-party | Relationship | Purchases (Sales) | Amount | Percentage of total purchases (sales) | Term | Unit price | Term | Balance | Percentage of total receivables (payable) | |||||||||||||||||
UMC GROUP (USA) | Associate | Sales | JPY | 2,430,205 | 6 | % | Net 60 days | N/A | N/A | JPY | 1,675,093 | 14 | % |
107 |
ATTACHMENT 9 (Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of September 30, 2020) | ||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | ||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | ||||||||||||||||||||||||
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Loss allowance | ||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||
UMC GROUP (USA) | Subsidiary | $- | $6,060,399 | $- | $6,060,399 | 8.31 | $- | - | $2,830,309 | $15,639 | ||||||||||||||
FARADAY TECHNOLOGY CORP. | Associate | - | 160,849 | - | 160,849 | 8.90 | 876 | Collection in subsequent period | 60,917 | 241 | ||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | ||||||||||||||||||||||||
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Loss allowance | ||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||
UMC GROUP (USA) | Associate | $- | RMB | 39,737 | $- | RMB | 39,737 | 8.11 | $- | - | $- | RMB 60 | ||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | ||||||||||||||||||||||||
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Loss allowance | ||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||
FARADAY TECHNOLOGY CORP. | Associate | $- | RMB | 29,093 | $- | RMB | 29,093 | 5.87 | $- | - | RMB | 16,199 | RMB 3 | |||||||||||
UNITED SEMICONDUCTOR JAPAN CO., LTD. | ||||||||||||||||||||||||
Ending balance | Turnover rate (times) | Overdue receivables | Amount received in subsequent period | Loss allowance | ||||||||||||||||||||
Counter-party | Relationship | Notes receivable | Accounts receivable | Other receivables | Total | Amount | Collection status | |||||||||||||||||
UMC GROUP (USA) | Associate | $- | JPY | 1,675,093 | $- | JPY | 1,675,093 | 3.87 | $- | - | JPY | 901,240 | $- |
108 |
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2020) (Not including investment in Mainland China) | |||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||
UNITED MICROELECTRONICS CORPORATION | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
UMC GROUP (USA) | USA | IC Sales | USD | 16,438 | USD | 16,438 | 16,438 | 100.00 | $1,774,953 | $83,952 | $83,952 | ||||||||||||||
UNITED MICROELECTRONICS (EUROPE) B.V. | The Netherlands | Marketing support activities | USD | 5,421 | USD | 5,421 | 9 | 100.00 | 139,386 | 1,453 | 1,453 | ||||||||||||||
UMC CAPITAL CORP. | Cayman Islands | Investment holding | USD | 81,500 | USD | 81,500 | 71,663 | 100.00 | 3,975,135 | 349,731 | 351,422 | ||||||||||||||
GREEN EARTH LIMITED | Samoa | Investment holding | USD | 977,000 | USD | 977,000 | 977,000 | 100.00 | 8,960,864 | (2,604,932) | (2,604,932) | ||||||||||||||
TLC CAPITAL CO., LTD. | Taipei City, Taiwan | Venture capital | 4,610,000 | 4,610,000 | 400,167 | 100.00 | 4,515,243 | 239,426 | 239,426 | ||||||||||||||||
UMC INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 1,520 | USD | 1,520 | 1,520 | 100.00 | 40,698 | (1,323) | (1,323) | ||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | Taipei City, Taiwan | Consulting and planning for venture capital | 3,440,053 | 3,440,053 | 401,734 | 100.00 | 4,911,856 | 393,233 | 380,307 | ||||||||||||||||
UMC GROUP JAPAN | Japan | IC Sales | JPY | 60,000 | JPY | 60,000 | 1 | 100.00 | 24,357 | 6,518 | 6,518 | ||||||||||||||
UMC KOREA CO., LTD. | Korea | Marketing support activities | KRW | 550,000 | KRW | 550,000 | 110 | 100.00 | 20,493 | 855 | 855 | ||||||||||||||
OMNI GLOBAL LIMITED | Samoa | Investment holding | USD | 4,300 | USD | 4,300 | 4,300 | 100.00 | 596,704 | 26,364 | 26,364 | ||||||||||||||
SINO PARAGON LIMITED | Samoa | Investment holding | USD | 2,600 | USD | 2,600 | 2,600 | 100.00 | 142,701 | 20,861 | 20,861 | ||||||||||||||
BEST ELITE INTERNATIONAL LIMITED | British Virgin Islands | Investment holding | USD | 309,102 | USD | 309,102 | 664,966 | 100.00 | 23,929,854 | 1,236,247 | 1,236,247 | ||||||||||||||
UNITED SEMICONDUCTOR JAPAN CO., LTD. | Japan | Sales and manufacturing of integrated circuits | JPY | 64,421,068 | JPY | 64,421,068 | 116,247 | 100.00 | 17,907,422 | 462,186 | 462,186 | ||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu County, Taiwan | Sales and manufacturing of integrated circuits | 1,903,741 | 1,894,660 | 148,112 | 81.44 | 347,812 | 58,573 | 47,932 | ||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 5,956,791 | 5,956,791 | 33,998 | 47.75 | 351,859 | 1,031,824 | 492,709 | ||||||||||||||||
MTIC HOLDINGS PTE. LTD. | Singapore | Investment holding | SGD | 12,000 | SGD | 12,000 | 12,000 | 45.44 | 8,669 | (5,674) | (7,413) | ||||||||||||||
UNITECH CAPITAL INC. | British Virgin Islands | Investment holding | USD | 21,000 | USD | 21,000 | 21,000 | 42.00 | 741,353 | 292,714 | 122,940 | ||||||||||||||
TRIKNIGHT CAPITAL CORPORATION | Taipei City, Taiwan | Investment holding | 2,370,000 | 2,370,000 | 237,000 | 40.00 | 2,256,411 | (63,050) | (25,220) | ||||||||||||||||
HSUN CHIEH INVESTMENT CO., LTD. | Taipei City, Taiwan | Investment holding | 336,241 | 336,241 | 364,102 | 36.49 | 6,917,663 | 6,961,341 | 2,540,738 | ||||||||||||||||
YANN YUAN INVESTMENT CO., LTD. | Taipei City, Taiwan | Investment holding | 2,300,000 | 2,300,000 | 46,000 | 30.87 | 4,706,077 | 499,452 | 154,193 | ||||||||||||||||
FARADAY TECHNOLOGY CORPORATION | Hsinchu City, Taiwan | Design of application-specific integrated circuit | 38,918 | 38,918 | 34,240 | 13.78 | 1,500,343 | 59,342 | 8,175 | ||||||||||||||||
UNIMICRON TECHNOLOGY CORP. | Taoyuan City, Taiwan | Manufacturing of PCB | 2,438,565 | 2,438,565 | 196,136 | 13.37 | 8,843,183 | 339,591 | 45,419 |
109 |
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2020) (Not including investment in Mainland China) | |||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||
FORTUNE VENTURE CAPITAL CORP. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | Hsinchu City, Taiwan | Energy Technical Services | $100,752 | $100,752 | 18,655 | 100.00 | $62,997 | $2,191 | $2,191 | ||||||||||||||||
PURIUMFIL INC. | Hsinchu City, Taiwan | Chemicals and filtration products & Microcontamination control service | 10,000 | 10,000 | 1,000 | 44.45 | 7,441 | 623 | 277 | ||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 1,688,630 | 1,688,630 | 23,827 | 33.46 | 246,589 | 1,031,824 | 345,299 | ||||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 5,900 | EUR | 5,900 | 5,900 | 32.78 | - | - | - | ||||||||||||||
UNITED LED CORPORATION HONG KONG LIMITED | Hongkong | Investment holding | USD | 22,500 | USD | 22,500 | 22,500 | 25.14 | 98,515 | (89,546) | (22,512) | ||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | Hsinchu County, Taiwan | Sales and manufacturing of integrated circuits | 8,856 | 8,856 | 1,194 | 0.66 | 3,821 | 58,573 | 385 | ||||||||||||||||
CLIENTRON CORP. | Xinbei City, Taiwan | Thin client | - | 277,508 | - | - | - | 74,637 | 13,392 | Note | |||||||||||||||
Note: As FORTUNE VENTURE CAPITAL CORP. lost its significant influence in April 2020, the investee was reclassified from investments accounted for under the equity method to financial assets at fair value through profit or loss, noncurrent. | |||||||||||||||||||||||||
TLC CAPITAL CO., LTD. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
SOARING CAPITAL CORP. | Samoa | Investment holding | USD | 900 | USD | 900 | 900 | 100.00 | $10,072 | $(99) | $(99) | ||||||||||||||
HSUN CHIEH CAPITAL CORP. | Samoa | Investment holding | USD | 8,000 | USD | 6,000 | 8,000 | 40.00 | 185,749 | 17,901 | 9,083 | ||||||||||||||
VSENSE CO., LTD. | Taipei City, Taiwan | Medical devices, measuring equipment, reagents and consumables | 95,916 | 95,916 | 4,251 | 24.39 | 4,682 | (16,418) | (2,142) | ||||||||||||||||
NEXPOWER TECHNOLOGY CORP. | Taichung City, Taiwan | Sales and manufacturing of solar power batteries | 888,019 | 888,019 | 8,645 | 12.14 | 89,472 | 1,031,824 | 125,288 | ||||||||||||||||
UMC CAPITAL CORP. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
TRANSLINK CAPITAL PARTNERS I, L.P. | Cayman Islands | Investment holding | USD | 4,036 | USD | 4,036 | - | 10.38 | USD | 6,040 | USD | 3,597 | USD | 299 | |||||||||||
UMC CAPITAL (USA) | USA | Investment holding | USD | - | USD | 200 | - | - | USD | - | USD | (0) | USD | (0) | Note | ||||||||||
Note: In August, 2020, UMC CAPITAL (USA) was dissolved. | |||||||||||||||||||||||||
TERA ENERGY DEVELOPMENT CO., LTD. | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
EVERRICH ENERGY INVESTMENT (HK) LIMITED | Hongkong | Investment holding | USD | 750 | USD | 750 | 750 | 100.00 | $40,022 | $1,985 | $1,985 | ||||||||||||||
WINAICO IMMOBILIEN GMBH | Germany | Solar project | EUR | 2,160 | EUR | 2,160 | 2,160 | 12.00 | - | - | - |
110 |
ATTACHMENT 10 (Names, locations and related information of investee companies as of September 30, 2020) (Not including investment in Mainland China) | |||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | Samoa | Investment holding | USD | 1,650 | USD | 1,500 | 1,650 | 100.00 | $3,065 | $(3,524) | $(3,524) | ||||||||||||||
WAVETEK MICROELECTRONICS INVESTMENT (SAMOA) LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
WAVETEK MICROELECTRONICS CORPORATION (USA) | USA | Marketing service | USD | 60 | USD | 60 | 60 | 100.00 | $2,796 | $113 | $113 | ||||||||||||||
BEST ELITE INTERNATIONAL LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
INFOSHINE TECHNOLOGY LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | - | 100.00 | $23,950,390 | $1,242,553 | $1,242,553 | ||||||||||||||
INFOSHINE TECHNOLOGY LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
OAKWOOD ASSOCIATES LIMITED | British Virgin Islands | Investment holding | USD | 354,000 | USD | 354,000 | - | 100.00 | $23,950,390 | $1,242,553 | $1,242,553 | ||||||||||||||
OMNI GLOBAL LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (NEW YORK) | USA | Research & Development | USD | 950 | USD | 950 | 0 | 100.00 | $29,286 | $18 | $18 | ||||||||||||||
UNITED MICROTECHNOLOGY CORPORATION (CALIFORNIA) | USA | Research & Development | USD | 1,000 | USD | 1,000 | 0 | 100.00 | 35,107 | 1,122 | 1,122 | ||||||||||||||
ECP VITA PTE. LTD. | Singapore | Insurance | USD | 9,000 | USD | 9,000 | 9,000 | 100.00 | 543,566 | 25,079 | 25,079 | ||||||||||||||
UMC TECHNOLOGY JAPAN CO., LTD. | Japan | Semiconductor manufacturing technology development and consulting services | JPY | 35,000 | JPY | 35,000 | 4 | 100.00 | 8,668 | (204) | (204) | ||||||||||||||
GREEN EARTH LIMITED | |||||||||||||||||||||||||
Investee company | Address | Main businesses and products | Initial Investment | Investment as of September 30, 2020 | Net income (loss) of investee company | Investment income (loss) recognized | Note | ||||||||||||||||||
Ending balance | Beginning balance | Number of shares (thousand) | Percentage of ownership (%) | Carrying amount | |||||||||||||||||||||
UNITED MICROCHIP CORPORATION | Cayman | Investment holding | USD | 974,050 | USD | 974,050 | 974,050 | 100.00 | $8,935,010 | $(2,604,175) | $(2,604,175) |
111 |
ATTACHMENT 11 (Investment in Mainland China as of September 30, 2020) | |||||||||||||||||||||||||||||||||||
(Amount in thousand; Currency denomination in NTD or in foreign currencies) | |||||||||||||||||||||||||||||||||||
Investee company | Main businesses and products | Total amount of paid-in capital | Method of investment (Note 1) | Accumulated outflow of investment from Taiwan as of January 1, 2020 | Investment flows | Accumulated outflow of investment from Taiwan as of September 30, 2020 | Percentage of ownership | Investment income (loss) recognized (Note 2) | Carrying amount as of September 30, 2020 | Accumulated inward remittance of earnings as of September 30, 2020 | |||||||||||||||||||||||||
Outflow | Inflow | Net income (loss) of investee company | |||||||||||||||||||||||||||||||||
UNITRUTH ADVISOR (SHANGHAI) CO., LTD. | Investment Holding and advisory | (USD | $23,240 800) | (ii)SOARING CAPITAL CORP. | (USD | $23,240 800) | $- | $- | (USD | $23,240 800) | $(92) | 100.00% | $(92) (iii) | $9,872 | $- | ||||||||||||||||||||
EVERRICH (SHANDONG) ENERGY CO., LTD. | Solar engineering integrated design services | (USD | 21,788 750) | (ii)EVERRICH ENERGY INVESTMENT (HK) LIMITED | (USD | 21,788 750) | - | - | (USD | 21,788 750) | 1,996 | 100.00% | 1,996 (iii) | 39,543 | (USD | 127,588 4,392) | |||||||||||||||||||
UNITED LED CORPORATION | Research, manufacturing and sales in LED epitaxial wafers | (USD | 2,440,200 84,000) | (ii)UNITED LED CORPORATION HONG KONG LIMITED | (USD | 588,263 20,250) | - | - | (USD | 588,263 20,250) | (RMB | (88,079) (20,739)) | 25.14% | (RMB | (22,144) (5,214)) (ii) | (RMB | 90,983 21,423) | - | |||||||||||||||||
HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | Sales and manufacturing of integrated circuits | (RMB | 13,358,064 3,145,294) | (ii)OAKWOOD ASSOCIATES LIMITED | (USD | 8,979,413 309,102) | - | - | (USD | 8,979,413 309,102) | (RMB | 1,254,649 295,420) | 99.9985% (Note 4) | (RMB | 1,254,628 295,415) (ii) | (RMB | 23,219,623 5,467,300) | - | |||||||||||||||||
UNITEDDS SEMICONDUCTOR (SHANDONG) CO., LTD. | Design support of integrated circuits | (RMB | 127,410 30,000) | (iii)HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | - | - | - | - | (RMB | 45,307 10,668) | 99.9985% | (RMB | 45,307 10,668) (iii) | (RMB | 266,058 62,646) | - | |||||||||||||||||||
UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. | Sales and manufacturing of integrated circuits | (RMB | 53,927,531 12,697,794) | (ii)UNITED MICROCHIP CORPORATION and (iii)HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. | (USD | 28,032,262 964,966) (Note5) | - | - | (USD | 28,032,262 964,966) (Note5) | (RMB | (5,099,245) (1,200,670)) | 65.22% | (RMB | (3,325,584) (783,043)) (ii) | (RMB | 11,513,120 2,710,883) | - | |||||||||||||||||
Accumulated investment in Mainland China as of September 30, 2020 | Investment amounts authorized by Investment Commission, MOEA | Upper limit on investment | |||||||||||||||||||||||||||||||||
$37,644,965 (USD 1,295,868) | $61,810,193 (USD 2,127,718) | $132,456,874 | |||||||||||||||||||||||||||||||||
Note 1 : The methods for engaging in investment in Mainland China include the following: | |||||||||||||||||||||||||||||||||||
(i) Direct investment in Mainland China. | |||||||||||||||||||||||||||||||||||
(ii) Indirectly investment in Mainland China through companies registered in a third region (Please specify the name of the company in third region). | |||||||||||||||||||||||||||||||||||
(iii) Other methods. | |||||||||||||||||||||||||||||||||||
Note 2 : The investment income (loss) recognized in current period, the investment income (loss) were determined based on the following basis: | |||||||||||||||||||||||||||||||||||
(i) The financial report was reviewed by an international certified public accounting firm in cooperation with an R.O.C. accounting firm. | |||||||||||||||||||||||||||||||||||
(ii) The financial statements were reviewed by the auditors of the parent company. | |||||||||||||||||||||||||||||||||||
(iii) Others. | |||||||||||||||||||||||||||||||||||
Note 3 : Initial investment amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rates at the financial report date. | |||||||||||||||||||||||||||||||||||
Note 4 : The Company indirectly invested in HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. via investment in BEST ELITE INTERNATIONAL LIMITED, an equity investee. The investment has been approved by the Investment Commission, MOEA | |||||||||||||||||||||||||||||||||||
in the total amount of USD 383,569 thousand. As of September 30, 2020, the amount of investment has been all remitted. | |||||||||||||||||||||||||||||||||||
Note 5 : The investment to UNITED SEMICONDUCTOR (XIAMEN) CO., LTD. (USCXM) from HEJIAN TECHNOLOGY (SUZHOU) CO., LTD. and indirectly invested in USCXM via investment in GREEN EARTH LIMITED. | |||||||||||||||||||||||||||||||||||
The consent to invest in USCXM's investment has been approved by the Investment Commission, MOEA in the total amount of USD 1,722,349 thousand. As of September 30, 2020, the amount of investment USD 499,993 thousand has not yet been remitted. |
112 |
ATTACHMENT 12 (Information of major shareholders as of September 30, 2020) | |||||
UNITED MICROELECTRONICS CORPORATION | |||||
Name | Number of shares | Percentage of ownership (%) | |||
JPMorgan Chase Bank, N.A. acting in its capacity as depositary and representative to the holders of ADRs | 633,479,015 | 5.18 | |||
113 |