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170 United Microelectronics Corporation Annual Report 2004
Analysis of Operating Results
In thousand NTD
2004 2003 Difference % Change
Sales revenues 115,165,087 81,977,207 33,187,880 40
Sales returns and discounts (1,170,521) (499,177) 671,344 134
Net sales 113,994,566 81,478,030 32,516,536 40
Other operating revenues 3,317,274 3,384,040 (66,766) (2)
Net operating revenues 117,311,840 84,862,070 32,449,770 38
Operating costs (81,443,181) (65,381,657) 16,061,524 25
Gross profit 35,868,659 19,480,413 16,388,246 84
Realized (unrealized) intercompany profit (47,715) (38,144) 9,571 25
Net 35,820,944 19,442,269 16,378,675 84
Operating expenses (11,365,952) (9,505,935) 1,860,017 20
Operating income 24,454,992 9,936,334 14,518,658 146
Non-operating income 14,895,451 9,033,180 5,862,271 65
Non-operating expenses (7,473,153) (4,154,145) 3,319,008 80
Income before income tax 31,877,290 14,815,369 17,061,921 115
Income tax expense (33,909) (795,112) (761,203) (96)
Net income 31,843,381 14,020,257 17,823,124 127
Explanation for significant changes (over 20%) in
operating results include:
(a) Net operating revenues
The increase in net operating revenues primarily resulted
from the recovery of the semiconductor industry and the
increased number of orders received.
(b) Gross profit analysis
The increase in gross profit for 2004 was due primarily to
increases in sales quantity, average selling price, and the
capacity utilization rate, and a decrease in the product unit
cost. Reasons for difference in gross profit are as follows:
Reasons for Difference
In thousand NTD
Gross Profit
Average selling price 9,402,405
Unit cost 1,584,866
Product mix –
Quantity 5,207,845
Others 193,130
Difference 16,388,246
(c) Non-operating income
Mainly resulted from an increase in gain on disposal of investments.
(d) Non-operating expenses
Mainly resulted from an increase in investment loss accounted
for under the equity method and the exchange losses due
to the fluctuations in the exchange rates.
(e) Income tax expense
Through an increase in the taxable income, the Company received
more investment tax credit resulting in a decrease in
income tax expense compared to last year.
Estimated sales quantities
With the industry shifting towards the vertical disintegration
business model, UMC, with its position as an industry
leader and pioneer in 300mm manufacturing and SoC
(System-on-Chip) technologies, should be able to reach a
revenue growth rate higher than that of the overall semiconductor
industry. Based on our capacity and customers'
demand forecast, the estimated sales quantity for 2005 is
approximately 2.99 million 200mm wafer equivalents.