Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you explain the factors behind the gross margin guidance of above 25% for Q1 2025, considering the mid-single-digit ASP decline? A: Chi-Tung Liu, CFO: The Q1 margin is impacted by a one-off ASP decline and increased depreciation expenses. Additionally, the recent earthquake affected margins by a low single digit, but this will be compensated through insurance. We will continue aggressive cost management to offset these impacts.
Q: What is the expected growth for depreciation in 2025, and how will it affect the first half of the year? A: Chi-Tung Liu, CFO: Depreciation is expected to grow by high 20% in 2025. The peak of depreciation will not occur until 2027, so we anticipate a gradual increase over the next couple of years.
Q: How does UMC plan to manage cash dividends given the improved cash flow from lower CapEx? A: Chi-Tung Liu, CFO: UMC aims to maintain a better-than-average dividend yield and ensure stable and consistent cash dividends. We will balance business growth with shareholder returns.
Q: What is UMC's outlook for the semiconductor market in 2025, and how does it plan to capture growth opportunities? A: Jason Wang, President: We expect the semiconductor industry to grow by 10% in 2025, driven by AI servers and increased semiconductor content in electronics. UMC plans to outgrow its addressable market by investing in technology innovation and expanding its advanced packaging offerings.
Q: How is UMC addressing pricing pressures in the market, especially with the upcoming renewal of LTA contracts? A: Jason Wang, President: Our pricing strategy remains unchanged, with a one-off adjustment at the beginning of the year. We expect a flattish pricing outlook after this adjustment. We are working closely with customers to navigate market dynamics and maintain competitiveness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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