Welcome, everyone, to UMC's 2021 Q1 Earnings Conference Call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question-and-answer session. Please follow the instructions given at that time if you would like to ask a question. For your information, this conference call is now being broadcast live over the Internet. Webcast replay will be available within an hour after the conference has finished. Please visit our website, www.umc.com, under the Investor Relations, Investors, Events section. And now, I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. And Mr. Lin, please begin. Thank you, and welcome to the UMC's conference call for the Q1 of 2021. I'm joined by Mr. Jason Wang, the President of UMC, and Mr. Chitung Liu, the CFO of UMC. In a moment, we will hear our CFO present the Q1 financial results, followed by our President's key message to address UMC's focus and the Q2 2021 guidance. Once our President and the CFO complete their remarks, there will be a Q&A section. UMC's quarterly financial reports are available at our website, www.umc.com, under the Investor's Financial section. During this conference, we may make forward-looking statements based on the management's current expectations and beliefs. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including the risks that may be beyond the company's control. For these risks, please refer to UMC's filing with the SEC in the U.S. and the Overseas Securities Authority. Now, I would like to introduce UMC's CFO, Mr. Chitung Liu, to discuss UMC's Q1 2021 financial results. Thank you, Michael. I would like to go through the Q1 2021 Investor Conference presentation material, which can be downloaded from our website. Starting on page three, the Q1 of 2021, consolidated revenue was 47.1 billion NT, with gross margin at 26.5%. The net income attributable to the stockholder of the parent was 10.43 billion NT, and the earnings per ordinary shares were 85.10 NT dollars. In the Q1, the capacity utilization rate was 100%, a further improvement from 99% in the previous quarter. Please go to page four. For sequential comparison, Q1 revenue 47.1 billion represents about 4% quarter-over-quarter growth, which contributed both from ASP increase of 3% plus, as well as wafer shipment, which is also 3% plus. It was somewhat offset by the stronger NT dollars. Gross profit margin continued to grow to 26.5%, or 12.5 billion NT. The operating income margin rate in Q1 was 16.2%, increased by 35.7% sequentially. The net income as reported was around NT 0.85, whereas for per ADS, it's about $0.149. Year-over-year comparison on page five, revenue grew by 11.4% despite the stronger, much stronger NT dollar exchange rate. Gross margin improved by nearly 7 percentage points to 26.5%, compared to 19.2% the same period of last year. Operating margin improved to 16.2% from 8.1% in Q1 of 2020. EPS will show a pretty significant growth from 0.19 in Q1 2020 to 0.85 this past quarter. On page six, our cash is around NT 107 billion dollars, and the total equity is about close to NT 250 billion dollars. Like I mentioned earlier, the Q1 revenue growth contributed both from ASP growth as well as wafer shipment growth. On page seven, you can see there's more than 3% uptake in our blended ASP for Q1 of 2021. In terms of revenue breakdown on page eight, Asia continued to grow, and right now it represents about 63% of our total revenue. Europe and Japan also showed mild growth in Q1 of 2021. For page nine, IDM still unchanged, around 14%. On page ten, we see some more balanced distribution among three major segments. Consumer now represents about 27%, and communication is about 46%. For page 11, 28- or 22-nanometer technology represents about 20% of our total pie in Q1 2021. The 40-nanometer represents another 20% for Q1 2021. On page 12, our capacity breakdown for Quarter Two, we will see some 4% quarter-over-quarter capacity growth, mainly coming from 12-inch capacity expansion at both 12A as well as 12X in Xiamen. And on page 13, we revise our annual CapEx budget, mainly due to a new project in Thailand, which we will go into details later. And for the new updated CapEx for 2021, it's now $2.3 billion. So the above is a summary of UMC results for Q1 2021. More details are available in the report, which has been posted on our website. I will now turn the call over to President of UMC, Mr. Jason Wang. Thank you, Chitung. Good evening, everyone. Here, I would like to update the Q1 operating result of UMC. Amid the semiconductor component shortage, we are working with our customers, suppliers, and partners to alleviate the capacity tightness across the supply chain. In Q1, robust wafer demand led to a full utilization in our manufacturing site, bringing overall wafer shipments to 2.37 million 8-inch equivalents. For the quarter, our gross profit grew 15.2% quarter-over-quarter to TWD 12.49 billion, which is probably reflected higher contribution from our 28-nanometer technology. During the Q1, we continue to see an increase in 28-nanometer wafer shipments, driven by strong wafer demand associated with digital TV, set-top box, and connectivity chips designed into smartphones. As a result, 28-nanometer revenue grew 18% quarter-over-quarter, representing 20% of our wafer business. Furthermore, we have started to ship 22-nanometer products to fulfill consumer demand, leading to a recognition of 22-nanometer wafer revenue in Q1 2021. We foresee a significant pickup in 22-nanometer product payouts that will increase our 22-28-nanometer product pipeline, optimize overall product mix, and enhance UMC foundry share. Looking into the Q2, market demand will continue to outpace supply, which will lift wafer shipments and blended ASP in U.S. dollars. Recent market dynamics have provided our customers an opportunity to reinforce our CapEx strategy within our high boundary while trying to alleviate the long-term capacity constraint in the supply chain. Therefore, our board of directors have approved an investment plan which will expand the capacity at UMC Fab 12A, Phase Six, in Taiwan's Tainan Science Park through an innovative win-win partnership model with several leading global customers. The Phase Six expansion is scheduled for production in the Q2 of 2023, with total investment for the project earmarked at NT 100 billion. In addition to UMC's previously announced 2021 CapEx of $1.5 billion, the bulk of which is allocated towards equipment for the company's Fab 12A P5 site, adjacent to Phase Six. Total UMC investment in the Tainan Science Park will reach approximately NT 150 billion over the next three years. The Phase Six program is supported by a multi-year product alignment between UMC and the involved customers that includes a loading protection mechanism that will ensure the Phase Six capacity is maintained at a healthy loading level. We look forward to leveraging our number one worldwide foundry market position in multiple areas, such as 28-nanometer OLED driver IC production, so we may further strengthen UMC's semiconductor industry relevance and capture new market opportunities down the road. Now, let's move on to the Q2 2021 guidance. Our wafer shipments will increase by 2%. ASP in U.S. dollars will increase by 3%-4%. However, the surging NT dollar headwind may potentially offset benefits on Q2 shipments increase and ASP growth. Gross profit margin will challenge 30%. Capacity utilization rate will be at 100%. Our 2021 cash-based CapEx will be budgeted at $2.3 billion, as Chitung mentioned earlier. That concludes my comments. Thank you all for your attention. Now, we are ready for questions. Yes. Thank you, President Wang. And ladies and gentlemen, we will now begin our question-and-answer session. If you have a question for any of today's speakers, please press 01 on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press 02 to cancel the question. Thank you. And now, please press 01 to ask the question. Thank you. Our first question is coming from Randy Abrams, Credit Suisse. Go ahead, please, Randy. Okay. Yes. Thank you. Congratulations on the result and margin improvement. First question, I wanted to ask on the capacity expansion. Could you discuss the amount of capacity for the Fab 12A Phase Five with the CapEx raised, and also how much capacity is planned for Phase Six with the 100 billion TWD plan? And if there's a framework for total CapEx, if you also expect any spending to continue in China or other facilities, if there's a view the current year spend may continue around this level for the next couple of years. Randy, for Phase Six alone, the total CapEx is around TWD 100 billion, and the spending is likely to spread out over the next three years. Starting from later part of this year, bulk of that in 2022, and also nearly one-third in 2023. That will be the key part of CapEx over the next three years. For the original budget of TWD 1.5 billion, the bulk of that will go to the 10,000 wafer 28-nanometer capacity per month at P5. That's already ongoing, and we are seeing the contribution earlier, maybe as early as next year. Now, for Xiamen, we are also already reaching to the target, closing to the target level of 25,000 wafer per month. If you recall, it was about 17,000-18,000 wafers by about the same time last year, but through the expansion, now it's close to the full capacity right now. Maybe Jason, you want to add a few more? I think the other data point is for the Tainan facility. After the P5, we'll see about 90,000 wafer capacity total for the Taiwan site, the 12A. And by adding the P6, we'll be on top of the 90K. So we're approaching about 120,000. It's also 10-K from P5. Right. Yeah. Okay. And to clarify, it's 90K to 10K P5. P6 is 20K. So that brings it to 120. Okay. And the second question, it gets back to the mechanism and this new expansion schedule. If you could talk on how the pricing and margins, as you expand and grow the business with the new capacity, how would that impact relative to your current margins where they're getting to 30%? And if you could give an updated view of the depreciation, where it was originally on that kind of nice downtrend the next two years, but now you'll get more growth, but how does the depreciation profile change? I mean, without going into specifics about the actual pricing, I can update. First, our discipline, our outline-driven strategy, did not change, so this program will not affect that strategy. Starting in 2023, this program will support our top-line growth, like you said, with multiple years of margin accretion, so financially, we believe this is justifiable. As we stated earlier in the P6 press release, this P6 expansion will run at Q2 2023, and in the meantime, the near-term downward depreciation trend remains unchanged. Even post-2023, UMC's total depreciation at a percentage of the revenue will be well-controlled and managed, mainly because after a few years, our light CapEx depreciation curve rolled off together with our gross margin improvement. This effort will have strengthened our financial position to capture this market opportunity, so I think our customers also recognize part of the market structural changes. So they perceive this arrangement is meaningful to them, but also beneficial to them. Yeah. Okay. One last question. The blended pricing start of the year was, I think, kind of a minimum plus 5%. If there's an updated view with ASP up 3%-4% in the Q2, but also there's a lot of talk in the market, there's further rounds with the capacity tightness. If you could give a view on pricing, and is there an initial view how 2022, if you're already contracting out and may see some movement up on pricing into next year? We will continue aligning with our customers. From the recent market dynamics, our forecast for the four-year ASP growth will be in a high single-digit year-over-year now, and it could approach 10%, and the 10% of the pricing will also include our product mix improvement, and therefore, the current ASP lift mainly reflects the value of overall market position, but it's more aligned to the market price and market position, so at this point, we see the entire 2021 will be approaching about 10% year-over-year growth on ASP. Okay, and is there any talk on 2022 yet, or is that normally as scheduled or in second half, but are you starting early given the constraints? They are ongoing discussion, as I said earlier. Hopefully, we can wrap up not only just the pricing, also capacity support alignment early before mid of the year, and so that is still ongoing at this point. Okay. Great. No, thanks a lot. Sure. The next question is coming from Bruce Lu, Goldman Sachs. Go ahead, please. Hi. Thank you for taking my question. It's very brief. Can you give us a little bit more color about your innovative business model for the new fab? Because I don't really see any details. But the problem from the investor is that when TSMC, who dominates in 28-nanometer global capacity, the chairman is talking about double booking and oversupply in 28, and we are building additional 28-nanometer capacity. How can we ensure that the newly added capacity is fully loaded? What kind of mechanism we can have? Because we have seen so many long-term contracts in many, many industries, and a lot of customers just don't honor the contract at the end of the day. So how can we ensure that we can get our desired returns? That's actually a very good question. And it can be a short answer and a long answer. Let me see if I can maybe start off giving a bit of the background of this decision. The recent market dynamics lead to a supply-demand imbalance, as everyone knows, particularly in the mature node. Some of our peers in the market also mentioned about that too. In the past few years, we have seen most of CapEx capacity expansion focused on advanced technology. However, the company did not significantly address the mature 12-inch and 8-inch capacity over a period of time due to the challenging market conditions. Within those mature 12 and 8-inch nodes, there are many critical components that play vital roles in the semi-supply chain. Therefore, we believe this event has structurally changed our role and position as a foundry service provider. And I think our customers recognize that. And so at this time, this situation is providing us and our customers an opportunity to work closely. And we have to solve the supply shortage together in this mature node. So the behavior of this towards this agreement with the customer is different than just reporting a CapEx for them. And we call this an innovative win-win collaboration model because this arrangement is supported by multi-years of product alignment. So this is a multiple-years agreement between UMC and the customers. And under the alignment, there's also a loading protection mechanism to ensure the capacity to maintain a healthier loading level. So in other words, this P6 program is well protected with a commitment and obligation on both sides. Now, when you talk about the cyclical risk, this P6 only accounts for about 10%-15% of our operations. With all the P6, the rest of the other capacity offerings will be more vulnerable to the industry's cyclicality. So I think the P6 program itself is set up well protected. Our focus is more on the base of our capacity. And at the end of the day, our goal to protect our base capacity is we have to continue our relentless enhancement in the technology competitiveness and our manufacturing excellence. And with predictable yield stability, our service, and the sizable capacity offering. So those are the fundamental solutions to cope with the industry's cyclicality. And so the bottom line is I think the P6 program itself is more well-structured, well-protected, but the market ups and downs, it will happen. But from our current economic methodology, based on our best effort, we've seen the demand and supply imbalance situation with those mature nodes will stay for some time. The conventional concern of inventory correction or the market ups and downs probably won't happen within one to two years. But beyond that, we have to still go back to focus on our fundamentals. So that's sort of how we view about this. But that creates actually a bigger problem. For example, like 28, right? Your current capacity is like 50,000-60,000 wafers a month. So the additional 20,000 is well protected in 2023 onward, but the remaining 50 is not protected. So if the customer is having capacity in both sides, they will fulfill the P6, but they can cut their orders from the original previous 50,000 wafers a month capacity. Is that right? Yeah. I mean, so one thing is from a competitive standpoint, whether we have a P6 or P5, we have to deal with the same situation, and in order to protect or compete in that space, our competitiveness advantage is not going to be based on this imbalance or even people talk about geopolitical or trade issues or so on and so forth. Our core competence will result from our focus in our addressable market segment, which we have been doing for the past few years. In other simple words, to put it, we focus on a selective market area within our addressable market segment, and we deliver comprehensive technology within that segment, and then we start aligning with the customer and strengthen our portfolio, and as a result, we actually start seeing a market gain on that as well. So we have to continue executing that to protect the baseline. And so I think we march into the direction we feel comfortable, and we feel that we have been staying focused in a select area. We have been executed, and we've become more relevant. So at this point, and we think we have to continue executing that. And the market risk is continuous. And we don't have the confidence to say the market will never happen in this cyclical situation. But you have to prepare yourself to compete in that situation. I see. Okay. One clarification for the P6 investment. You mentioned that the ROE target or return-driven target is unchanged. But for me, it's like the current wafer price for the 28 cannot justify the return. How can this P6 return being secure, or how can we ensure that it will not be margin diluted for this incremental revenue, or how can we ensure that the incremental ROE is not diluted? Because the current program has a predetermined pricing for the P6 program, and based on that, the program not only supports the top-line growth, they also support our multi-years margin accretion. I see. I see. So this P6 wafer price will be different compared to your existing 28-nanometer capacity? It is different, yes. I understand that, but can we disclose somehow the price premium? We can't. Fine. Thank you. I'll go back to the queue. Sure. Thank you. The next question is coming from Gokul Hariharan, J.P. Morgan. Go ahead, please. Thanks for taking the question. Firstly, for this new capacity arrangement, could we talk a little bit about what level of involvement do the customers have? Do you consider any potential co-investment from the customers? And any thinking on why you accept co-investment or why you don't accept any co-investment? Just wanted to understand that part. And when we talk about ROI boundary, could we put some numbers around it so that it's clear for us to communicate to investors also in terms of what is kind of the ROI boundary that is kind of a hard stop in terms of where UMC will not invest? Well, first of all, in addition to what I just mentioned earlier, it has a predetermined pricing arrangement for P6. And there's also a guarantee to their commitment by committing to the capacity deposit as well as the loading protection. Okay? So there's a structural mechanism to protect the P6 program. And I kind of highlighted earlier in the background of this current market situation because the market dynamics, so this group of customers is willing and recognizes the possible structural changes. So they participated with us jointly. So I would say this is a joint program between us and some of the key customers. And so financially, based on that arrangement, we're not affecting UMC's bottom lines and also provide UMC's top-line growth. And we have spent lots of time discussing this and sharing many data. And we both agree. We both agree this is the right thing to do to solve the shortage issues without affecting UMC's discipline, the ROI-driven strategies. I can't elaborate more about the specific ROI numbers, but I can tell you that under our board of directors' review and our team's review, we see the bottom line with the margin accretion, and that meets our financial target, and again, I also mentioned earlier, with the P6 program, the near-term downward depreciation trend remains unchanged even post 2023 after production stopped ramping, so we feel this is a well-structured program for us. Got it. Understood. One other question. Is there any change in terms of the shipment outlook? I think we did talk about limited ASP being up maybe about 10% this year compared to previously. I I think we were expecting a little bit more like mid-teens. Shipment growth or capacity growth outlook for this year, are we still roughly looking at 3%-5% capacity growth this year, or is it a little bit better now? Yes. Capacity growth is the same for the year. Yeah. Understood. Thank you very much. I'll go back to the queue. All right. Thank you. The next one is from Roland Shu, Citigroup. Go ahead, please. Hi. First question to Jason. Jason, in your prepared remark, you said the Q1 gross profit growth was partly reflects higher contribution from 28-nanometer revenue, so the question is, how about the 28-nanometer gross margin compared to the corporate average in Q1? Are we seeing a 28-nanometer gross margin above corporate average already? We don't give out any breakdown by node. Okay? So the 28 becomes a meaningful node to us now on both sides, both on the top line and our margin contributions. If I may, the 28 is actually compared to itself over the past few quarters. So the gross margin of current 28-nanometer is actually much better than the past few quarters. Okay. Yeah. Then how about the overall 8-inch and 12-inch gross margin? I think previously you also said 12-inch gross margin would be lower compared to average. Then after this price adjustment, how about your 8-inch and 12-inch gross margin look like? Yeah. Price adjustment is really a reflection of our market value. It comes from both absolute price increase as well as part of mix increase. So it doesn't really change too much about the dynamic between 8-inch and 12-inch. And 8-inch, as you can understand, that represents much less, carry much less depreciation. So on our accounting point of view, the number is always higher than that of 12-inch. But if we're talking about EBITDA margin, then that may not necessarily be the case. So overall, we were happy with the progression that 12-inch, especially 28-nanometer, has improved from a profit margin point of view. Understood. Yeah. And you also talked about you starting to ship 22-nanometer product because of customer's demand. So for this 28 to 22-nanometer migration, how about the margin or profitability change? Is this 22-nanometer carrying a much higher ASP and carrying a better gross margin than 28-nanometer? I mean, typically, we provide the blended gross margin number without breaking down by detail. So it's hard to pinpoint on each node. But I also like to add the gross margin is a result, not just the product mix. The 12-inch wafer shipment contribution, 8-inch pricing justification, as well as the continuous cost reduction effort and our productivity improvement. So this is more of a blended result on everything. And it's not just associated with one particular node or fact. So we're happy that we start challenging the 30% in the upcoming quarter. I think given what we have done and we have confidence, we'll continue to improve on that too. Yeah. Okay. Thanks. Last question from me. I think a couple of months ago, you were comfortable with the total wafer supply, and have you changed your view recently due to this increasing wafer demand, so are you able to secure enough raw wafer from your suppliers? Yeah. We had that issue a while back, and we have been diligently working on that and closely aligned with our supplier and managing the supply assurance. So we haven't seen any problem right now. No. Okay. So you have secured all of these wafer also. How about for the wafer price change? Do you see a meaningful wafer price change recently? We see the pricing dynamics across the supply chain, and I can't tell you what's going to happen tomorrow, but at the current stage, based on the alignment with our supplier, we're okay with the current pricing structure. Yeah. So do you see the pricing going up or? I don't have that visibility going up at this point, but I don't know whether that changes tomorrow or not. Yeah. Okay. Understood. Okay. Thank you. Yeah. Sure. The next one is from Szeho Ng, China Renaissance. Go ahead, please. Hi. Good afternoon, gentlemen. I have two questions. The first one regarding the 40-nanometer strategy. Because some of the 28-nanometer products have plans to go into the 40-nanometer, I'm not sure if UMC would start assessing the 40-nanometer expansion possibility. Yes. The P6 program, the arrangement with option to migrate into 14, and the possible timeframe will be sometime in 2024. But there's no plan before that. Yeah. I see. Gotcha. And regarding the collaborative expansion with the customer, the company will have some sort of a loading protection mechanism. So I just wonder how long would that protection clause last in general? It lasts entirely the program. Yeah. Thank you very much. Yeah. Great. Sounds. And the next question comes from Charlie Chan, Morgan Stanley. Go ahead, please. Thanks. Good afternoon, gentlemen, and congratulations for a very strong results. So my first question is also regarding the P6 project. So I saw some news flow, so I just want to clarify. Is there any equipment consignment from customers? Can you clarify the points? No. The answer is no. There's no true consignment from customer. Customer will guarantee their commitment by providing the capacity deposit. Okay. So it's almost all from your balance sheet? Yes, it is. Okay. So with that, do you need to increase the kind of debt ratio or do some fundraising to sponsor the future CapEx? Yeah. Our current cash on hand is about a little bit more than $100 billion as well. And we just announced this exchangeable bond project, which will likely raise another $600 million for us by disposing of our non-core assets. So I think from a financial standpoint of view, we even can maintain our current high dividend payout ratio in light of this new P6 project. So there's pretty much no impact on our financial structure. Okay. Thanks, Chitung. So back to the P6 business, you mentioned that there are several types of demand, including OLED driver IC, wireless connectivity, set-top box, etc. So for that kind of P6 or kind of long-term demand, which customer or which product type is a major driver for this P6? Or the demand comes from, even from the current projects? Well, I mean, first of all, all of them are global leading semi companies, and I can't really name names. And the customer's product and our technology roadmap has been well aligned, and it's also our existing customers. At the same time, this customer, along with their demand outlook in their addressable market segment, in our view, will outpace the semiconductor industry projection. So it's in a high-growth area. And so we believe this is a more well-positioned program to secure the P6 capacity as well as a few of their future growth. Yeah. Okay. So it seems like the future demand comes across from the different customers, not just a single or a few products. Is that the right interpretation? Yes. It's a multiple customer with multiple products. Yes. Okay. Thanks. And then a minor question is about the trend of the 8-inch semiconductor project migrate to 12-inch. I'm not sure if that is happening within your fab, but you see that trend of those, for example, large panel driver IC, power IC, sensors. Those products used to use the 8-inch as a major foundry source. But going forward, do you think that those might migrate to 12-inch? And maybe a year or two years later, do you think 12-inch is more efficient for those kind of specialty semi products? I mean, every application, the most of it is migrating from 8-inch to 12-inch due to, like you said, the performance reason or cost advantage. There's a continued product pipeline within different applications, including what you mentioned. We continue to align with the customer on that. We don't observe any 8-inch demand overflow to 12-inch because the overflow of 8-inch is high. We haven't really seen that. We continue seeing that on a by-application basis because of the product performance reason, because of the cost reason, and they continue migrating to a 12-inch. Even within the 12-inch, they continue migrating into different zones. Okay. Thanks very much. So I think does that mean that 8-inch foundry supply shouldn't see a structural shortage? I mean, because there's a kind of alternative, right, to use a 12-inch? Is that right understanding? I think the advanced 8-inch has a structural shortage issue. The demand continues being very strong. However, due to the market challenges on building a greenfield at 8-inch facilities, it's very difficult, so we see that come online as not as fast as the demand grows, so at least for the foreseeable couple of years, I think the 8-inch will remain challenging, and we're still under structural constraints. Yeah. Okay. Yeah, and last question, maybe back to Chitung. So can you help us to understand your gross margin trend into the next few years? I know you don't give a next year margin guidance, but just based on management's comments just now, it seems to suggest that the P6 wouldn't dilute your gross margin even though the CapEx is from your own balance sheet. Right? So can you help me to understand what gives you that confidence into next year's gross margin will continue to go up? Is that because of the further price hike or the old equipment depreciation going down? Because I feel like now you are running at 1% utilization already, right? So the margin benefit from the higher utilization doesn't seem to be the answer to that. Can you help us to understand? Thank you. Yeah. First of all, we didn't say the gross margin will go up sequentially in 2022. We didn't say that. Okay? We say the gross margin is a collective effort of cost reduction, ASP reflecting the market, and also product mix adjustment. So we are doing all of that, and hopefully, we can continue to improve our gross margin. But we will keep our gross margin guidance quarter by quarter. And for the P6, it's going to represent about 10%-15% of the overall operation and with the prefixed price and with our EBITDA target. So if we plug into our current base, that's the basic assumption to mention that we don't expect this P6 project will dilute our gross margin. And because it's going to be profitable from the very beginning, it's actually going to be an added driving force to our overall ROE performance. Yeah. So I remember last quarter, you gave us some depreciation trend, right? Yeah. Depreciation trend-wise, for 2021 and as well as 2022, we are still looking for somewhat less than 5% annual decline in the full-year depreciation expenses, and beyond 2023, when the P6 numbers start to kick in in the mid of 2023, the number still will be well under control, and the trend will not be reversed. Okay. Sorry. I missed that. So one last one is auto semi production. I mean, how much is the revenue contribution? I'm not sure why you start to disclose that auto semi exposure. And I guess the global investors are really keen to get your sense about when does the auto semi output will go up from your side. And also, when do you think the shortage will ease? I mean, the shortage right now is across the board, and we just have to work with our customer closely. Along with the productivity improvement as well as the new capacity expansion, the auto segment itself, we haven't really broken down in our pipeline. It's categorized under the others. Right now, the others account about 11%. For our automotive market, it's within that numbers. Okay. Okay. Okay. Understood. Thanks very much for your time. Thank you. Sure. The next one is from Sunny Lin, UBS. Go ahead, please. Hi. Thank you for taking my questions and congratulations for your great results. My first question is also on your P6 expansion. I think you just put out a press release saying that the factory has been completed, but the mass production will only start from the Q2 of 2023. So I wonder if that's because of the equipment supply constraint that we are now seeing in the industry, or is there any possibility that the mass production could actually start earlier than expected? Well, I mean, we are working with our suppliers, and at this point, we'll foresee there's a lead time for the overall equipment. So we project the P6 will be ready for production in the Q2 of 2023. That's what we're targeting. But we're still confirming with our suppliers to ensure that that will happen. So that's the current. Got it. Maybe a follow-up to your 28 expansion. Since most of your capacity is built several years ago, and therefore, depreciation starts to come down, if we compare the production cost for the new capacity versus your current capacity, I wonder if you could share with us any color in terms of the cost increase? Let me see. Well, first of all, I don't think there's a cost increase. So once you reach to a certain economic scale, the overall cost is actually coming down. So we don't see building a factory now compared to what we're building the capacity six years ago. It's higher, and it's actually lower. Okay? And in terms of the CapEx budget that we presented, we don't generalize this figure, given that our P6 program has the flexibility by converting into a 22-nanometer as well as a 14-nanometer. That was the earlier question if we consider a 14-nanometer. And the answer is yes. So the entire program has certain flexibility converting into the 14-nanometer. And so we want to make sure when we plan this, we have that flexibility. Okay? And so we can't really generalize this figure to what six years ago. But in general, the current 28 cost is lower than what we built six years ago. Got it. Thank you. That's very helpful. My second question is on the overall supply demand imbalance, and that's now, I think, driving several foundries to accelerate the CapEx for their trailing edge, so I just want to get your sense if in the medium term, this could lead to overexpansion or more volatility for the whole industry. Thank you. I mean, I kind of touched this earlier as well. But once the new capacity becomes available, we anticipate the supply imbalance issue will be addressed. Okay? But nonetheless, the structural shortage in the materials we think will remain unchanged until 2023, okay, given the lead time consideration. Okay? Based on our research and study, we think there's a good chance they won't have any excess capacity. Okay? It's probably not likely to happen within the next one to two years. Okay? In addition to that, consider the lead time, capacity build-out lead time, and also the uncertainty of the geopolitical tensions. We have pretty good confidence this tightness will probably continue for at least one to two years. Got it. Thank you very much. The next question comes from Stephen Chin, Elisha Capital. Go ahead, please. Hi. Thank you for taking my question. And I have two questions here. First is, I'm just wondering, because we see for some emerging technology, we don't really see clients have the same product using dual sourcing. I'm just wondering, if you look at the 28-nanometer now, do you think clients usually use only one foundry for the same product? Or for the same product, a client could still use dual sourcing? This is my first question. Well, I mean, this is several different perspectives on this. Okay? One, based on the customer's perspective. If the customer believes they need a multiple sourcing strategy to ensure their supply chain, and they have the design resources, I think the customer is capable to do so to enable multiple sourcing. If they believe single source and enable their supply assurance, and without double the design effort, they probably don't need to. So one perspective is from the customer's perspective as far as supply chain. And from the design and the product specific, and that's a different consideration. They're very customized. So they're very hard to have multiple sources because of the characteristics of the product itself. So can you talk about the advanced node? Because we don't serve the very bleeding edge node. So I can't really give you a comment about UMC specifically. But I can tell you as a general sense, design into an advanced node is very costly. So if you want to enable multiple sources, that will be a very significant investment. So I think that is one of the important factors here. Yeah. Yeah. Understood. So actually, the question was, if the comment you just made also applies to 28-nanometer? If you look at the 28 capacity, I think most of the product, they'd be able to enable multiple sources, I think, as long as the customer wants it to do it. There will be some differentiation on the technology side. For UMC, we have a leading market position on some of the technology solutions. And for those, I think we're still ahead in the market. So we probably will enjoy better customer stickiness on that. Understood. Thank you. Another question is that, although just very quickly, so we understood that for the mature node, like 200-millimeter, 300-millimeter mature node, they are all in short supply, high demand shortage now. But if we really need to do a comparison between the two, do you think it is tighter or the bigger shortage in 200-millimeter or in 300-millimeter? Well, this is an interesting question. Okay? From our view, what we see, they're severely constrained on both the 200-millimeter as well as the 300-millimeter mature node. But there's a possibility also the customer is a double booking on that to ensure they'd be able to secure supply. So how to judge the overbooking is very difficult. But I can tell you at this point, I think on the industry-wise, we are under severe shortage across the board on the mature node. Yeah. Thank you. So just a very quick follow-up on your last comment. So you mentioned about probably due to possible overbooking. So previously, you also mentioned you see the tightness will continue probably for another one to two years. So can we assume when you make the major comment regarding supply tightness, sustainability, you already try to consider the possible overbooking? Oh, absolutely. I mean, this is the Planning 101, so we have to consider that, and based on our research and study, we actually go into that all the way to the end market, entire pipeline into supply chain too. Analyze that, so I think that there's a few mega trends in this space driving the demands from 5G smartphones, the automotive, EV adoptions, as well as the smart home, all-smart home space, and so those demands are real, okay? And if you look at the past years, there's this lack of CapEx in the mature node space, so structurally, they're just not enough, and so that's why we believe even with the P6 or even with any announced capacity today in the foundry space, we still believe the structural shortage will probably remain. Yeah. Thank you. Very clear and very good result. Thank you. Thank you. Ladies and gentlemen, we're running out of time. So we're taking the last question. And the last one is from Bruce Lu, Goldman Sachs. Go ahead, please. Okay. Thank you for taking my question. Can I have a question about the ASP? For the Q1, ASP on the blended basis improved by 1.3% only, which is pretty much driven by more 28-nanometer power mix improvement. So where is the price hike the market is talking about? And also for the Q2, the capacity is growing by 4%. Consumption is growing by 3%. But I'm assuming that the new capacity addition is mainly for 28-nanometer capacity, which is supposed to have a much higher ASP. The ASP guidance for the Q2 is also like 3%-4% only, which is, again, pretty much driven by 28. So as a like-to-like-based ASP, do we see any improvement? There is a possible correction. The Q1 ASP growth was actually more than 3%, not 1 point something. So as I mentioned, some of that comes from price increase, so less than 3.2%. And some of that comes from product mix improvement. So overall, quarter one, ASP growth was more than 3%. I see. What is the FOREX assumption in Q1? Because it's using like. FOREX was 28.3, so there was nearly 2% negative impact on FOREX. I see. Understand that. So for the Q2, what is the ASP? What is the assumption for the ASP expansion driven by the product mix improvement? Still similar. I would say both are key factors which contribute nearly 50/50 each. So we normally don't give the detailed numbers, but you should expect to see a similar driving force for this 4% growth for quarter two in ASP. I see. Okay. Last question. I just did a very quick math for the P6 28-nanometer wafer price. It seems to me that if you want to have a similar return, the wafer price for that 28 has to be like 50% plus higher than the current market price. That seems too good to be true from my simple math. So is there anything I'm missing, or is that math sounds correct? I can't really comment on percentage, but there is a predetermined pricing arrangement with the customers. It's actually a very diversified customer portfolio. I mean, bottom line, the mechanism works. I mean, the math works. Okay? The math. So my math works. So yeah, I can't comment about the percentage of that. I think the net effect of the total ROI calculation. We also factor in the benefit of economy of scale and also the cost reduction effort, etc., etc. All the factors that Chitung just mentioned. So again, it's a collective effort. I see. Understand. Thank you. Thank you. Thank you, and ladies and gentlemen, we thank you for all your questions. That concludes today's Q&A session. I'll turn it over to UMC head of IR for closing remarks. Thank you. Yes. Thank you for attending this conference today. We appreciate your questions. As always, if you have any additional follow-up questions, please feel free to contact UMC at ir@umc.com. Have a good day. Thank you, and ladies and gentlemen, that concludes our conference for Q1 2021. Thank you for your participation in UMC's conference. There will be a webcast replay within an hour. Please visit www.umc.com under the Investors Events section. You may now disconnect. Goodbye.