United Microelectronics Corp (NYSE:UMC), Taiwanese chipmaker, stock rose 2.07% (As on January 17, 11:26:21 AM UTC-4, Source: Google Finance) after the company in the fourth quarter of FY 22 has reported a 14.8% year-on-year rise in fourth-quarter revenue to T$67.84 billion ($2.24 billion), although that was 10% down compared to the previous quarter with wafer shipments falling 14.8% quarter on quarter. The company is implementing strict cost controls because of soft demand and a weak outlook, in a further sign of pain facing the tech industry. The demand has slumped in recent months as soaring inflation, rising interest rates and a gloomy world economic outlook have led consumers and businesses to tighten spending. Consolidated gross margin for 4Q22 was 42.9%. Net income attributable to the shareholders of the parent was NT$19.1 billion, with earnings per ordinary share of NT$1.54. COGS declined 2.6% to NT$38.71 billion, which included 7.5% sequential decrease in depreciation.
Moreover, Revenue from Asia-Pacific declined to 54% while business from North America was 30% of sales. Business from Europe was 9% while contribution from Japan increased to 7%. Revenue contribution from 22/28nm grew to 28% of the wafer revenue, while 40nm contribution was 17% of sales. Revenue from the communication segment represented 45%, while business from computer applications decreased to 12%. Business from consumer applications was 25% as other segments increased to 18% of revenue.
In 4Q22, cash inflow from operating activities was NT$40.96 billion. Cash outflow from investing activities amounted to NT$36.05 billion, which included NT$36.32 billion in capital expenditure, resulting in free cash flow of NT$4.63 billion. Cash outflow from financing was NT$9.19 billion, primarily from a NT$8.08 billion in bank loans and a NT$2.54 billion in redemption of bonds. Net cash outflow in 4Q22 totaled NT$6.83 billion. Over the next 12 months, the company expects to repay NT$ 2.49 billion in bank loans. Cash and cash equivalents slightly decreased to NT$173.82 billion. Days of inventory increased by 6 days to 72 days. Current liabilities slightly increased to NT$108.57 billion. Long-term credit/bonds decreased to NT$39.88 billion. Total liabilities decreased to NT$197.60 billion, leading to a debt to equity ratio of 59%.
The company’s 2022 capital spending was $2.7 billion, less than the $3 billion previously planned, with 2023 spending set at $3 billion, adding new capacity would come online in the third quarter in the southern Taiwanese city of Tainan.