管理層發言
Welcome, everyone, to UMC's 2024 Fourth Quarter Earnings Conference Call. 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 is 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. Mr. Lin, please begin.
Thank you, and welcome to UMC's conference call for the fourth quarter of 2024. I'm joined by Mr. Jason Wang, President of UMC; and Mr. Chi-Tung Liu, the CFO of UMC. In a moment, we will hear our CFO present the fourth quarter financial results followed by our President's key message to address UMC's focus and first quarter 2025 guidance. Once our President and CFO complete their remarks, there will be a Q&A session. UMC's quarterly financial reports are available at our website, www.umc.com, under the Investors, Financial section. During this conference, we may make forward-looking statements based on 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 a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and ROC security authorities. During this conference, you may view our financial presentations material, which is being forecast live through the Internet. Now I would like to introduce UMC's CFO, Mr. Chi-Tung Liu, to discuss UMC's fourth quarter 2024 financial results.
Thank you, Michael. I'd like to go through the 4Q '24 investor conference presentation material, which can be downloaded or viewed in real-time from our website. Starting on Page 4, the fourth quarter of 2024, consolidated revenue was TWD 60.4 billion, with gross margin at 30.4%. Net income attributable to the stockholder of the parent was TWD 8.5 billion, earnings per ordinary share was TWD 0.68. Utilization rate in Q4 was 70%, slightly down from the previous quarter of 71%. On the quarterly income statement, operating revenue was basically flat, around TWD 60.4 billion and gross margin rate maintained at 30.4% or TWD 18.3 billion. Due to mark-to-market loss of the investment portfolio, for both UMC and UMC Capital, we registered a TWD 1.4 billion loss of nonoperating income in Q4 '24. The result is the net income attributable to the shareholder of the parent reached TWD 8.49 billion or TWD 0.68 EPS per share.
For the cumulative whole-year 2024 performance on a year-over-year comparison, revenue increased 4.4% Y-o-Y to TWD 232.3 billion. Gross margin rate was around 32.6% or TWD 75.6 billion. Operating expenses are under control around 10.9%, similar to the 10.7% in 2023. The net income for 2024 was TWD 47.2 billion or TWD 3.8 per share. EPS per ADS is USD 0.58. On the balance sheet, our cash on hand is over TWD 100 billion, and total equity for the company at the end of 2024 reached TWD 378 billion. ASP last quarter at Q4 was flat, around flat to quarter-over-quarter. And let's go down to Page 9 for revenue breakdown. For Q4 2024, the Asia sales represent about 61%, which declined 4 percentage points from the previous quarter, while Europe increased from 5% to 11% in Q4 2024. For the whole year, the Asia part of the revenue increased from 57% in 2023 to 63% in 2024. Europe declined about 3% to 8 percentage points from 11% in the previous year, while North America didn't really change that much from 27% to 25%.
For the quarterly, IDM revenue remained flattish from 15% to 16%. For the full year, it declined from 22% in 2023 to 16% in 2024. In terms of application breakdown, we see Consumer segment decline about 2% to 29%, and Communication also declined about 3% to 39%. Others, including Automotive and Industrial in this single quarter, due to customers' order modulation and wafer ship difference increased from 14% to 19%. On Page 14, our full-year application breakdown, Communication is around 42%, and Consumer is about 28%. On Page 15, our technology breakdown, our 22 and 28-nanometer shipment continue to increase and right now represent about 34% of the total revenue and 40-nanometer also see some increase from 13% in the previous quarter to 16% in this quarter. For the whole year, 28 and 22 represent about 34% of our total revenue while 14-nanometer remains constant around 14%. Capacity continued to increase, mainly from our 12A Tainan P6 operation.
It will somewhat decline a little bit because of the Chinese New Year holiday schedule and also annual maintenance schedule in Q1 of 2025. CapEx budget for 2025 currently stands around TWD 1.8 billion. The actual CapEx number for 2024 was a bit over USD 2.8 billion. The above is a summary of UMC results for Q4 2024. 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.
Well, thank you, Chi-Tung. Good evening, everyone. Here, I would like to share UMC's fourth quarter results and guidance. With wafer shipments and utilization slightly exceeding expectations. For full-year 2024, revenue grew 4.4% year-on-year, reflecting a steady improvement in demand across Communication, Consumer, and Computer segments. Our 22/28-nanometer portfolio remains the largest contributor with revenue increasing 15% in 2024. Notably, customers are showing strong interest in migrating to our 22-nanometer specialty platform for next-generation networking and display driver applications, which offers significant power savings and performance advantages over the 28-nanometer solution. Tape-outs for 22-nanometer products are accelerating, and we expect to see higher revenue contribution from 2025 onwards. Looking into 2025, the semiconductor market is poised for another year of growth, driven by strong demand for AI services as well as increasing semiconductor content in smartphones, PCs, and other electronic devices.
To capture opportunities in the fast-moving market, UMC continues to invest in technology and innovation, developing industry-leading specialty solutions to ride the next wave of system upgrades and stay ahead of the competition. Building on our technology foundation, UMC is also actively expanding our advanced packaging offerings to help unleash the potential of AI in upcoming years. In conjunction with technology development, our key capacity expansion projects are progressing as planned. Our new Singapore Phase 3 fab will enhance customer supply chain resilience, while the 12-nanometer collaboration with our U.S. partner will offer customers a migration path beyond 22 nanometers. Now let's move on to first quarter 2025 guidance. Our wafer shipments will remain flat. ASP in U.S. dollars has decreased by mid-single-digit percentage. Gross margin will be higher than 25% despite the impact of the January 21 earthquake.
Capacity utilization rate will be approximately 70%. Our 2025 cash-based CapEx will be budgeted at USD 1.8 billion. That concludes my comments. Thank you all for your attention. Now we are ready for questions.
分析師問答
And our first question will be coming from Sunny Lin at UBS.
So my first question is on gross margin. And so this above 25% gross margin guidance for Q1, could you help us understand what are some of the major factors? Because if we look at Q1 2024, your blended ASP was also down by about mid-single-digit, but you were able to keep your gross margin. I wonder why there is a meaningful decline for Q1 this year. And then maybe the second part for gross margin is how should we think about the full year? With this above 25%, should we consider that a fair assumption for the full year? Or would you expect some recovery in the coming few quarters? Maybe let me stop here, and I have a few follow-ups.
Thank you. First of all, the earthquake earlier this morning does have an impact on our Q1 margins, maybe about low single digit. However, a large part of the loss will be compensated through insurance in the later stage. Secondly, the Q1 margin is impacted by both ASP decline, which is one-off, as well as the increased depreciation expenses. So we don't expect anything structural in terms of our profitability change. The one-off pricing adjustment and depreciation plus earthquake this morning lead to this higher than 25% gross margin guidance. We will continue to deploy aggressive cost management to offset the headwind cost focusing on multi-sourcing strategy, streamlining process flow, supply chain, pricing management, and power reduction measures on facilities and tools. Of course, we will continue to invest for the future, including the automation transformation. So as for the rest of the year, we will provide guidance on a quarterly basis.
Got it. If I could follow up on the depreciation increase, what's your current guidance for the growth of depreciation for 2025? And how much will depreciation increase going to Q1? Should we assume most of the depreciation increase to happen in the first half because you have completed your 28-nanometer expansion in Taiwan, and therefore, the depreciation increase will start to moderate going into the second half?
The depreciation increase in 2024, as we guided, was low 20%. As a matter of fact, it's very close to 20%. For 2025, the guidance will be high 20% for the whole year. We don't really have a full quarterly breakdown yet for the depreciation expenses because it varies according to tool installation, etc. But the peak of the depreciation, we will see way down until maybe 2027 to see pickup. So it's still another year or two to go in terms of depreciation increase.
Got it. My second question is on your cash dividend. How should we think about your policy? Obviously, I think last year, business was through the trough, but on the other hand, your cash flow should start to improve substantially given the lower CapEx. I understand the cash dividend still needs to go through the approval from the Board, but any color on your strategy would be very helpful.
Yes. We understand UMC needs to maintain a somewhat better than average dividend yield in order to attract our investors. We will strike a dedicated balance between business growth and shareholder returns. Most importantly, we want to ensure shareholders receive a stable and consistent cash dividend.
Also, in the last 3 years, you paid $3 or above cash dividend. And so when you mentioned sustainability, should we consider that from an absolute amount point of view?
It's both. It's blended. So you should blend the absolute dollar concept along with the dividend yield and also the payout ratio.
Got it. No problem. My last question is for Jason. I want to get your view on the overall semi-cycle, more specifically into 2025. How do you think about UMC's adjustable foundry market growth for this year? Are you seeing any green shoots from consumer restocking or supply chain prebuild?
Sure, of course. Yes. For the semi-outlook, I mean, it's our view that the semiconductor industry is expecting to see a 10% growth in 2025, mainly driven by the high demand for AI servers and moderate growth in consumer electronics and increases in semiconductor content from the AI smartphone and AI PC notebook replacements. So the predominantly dominant growth still remains in the AI server area. For the foundry, we expect the 2025 foundry market will grow in mid to high teens percentage. Again, that includes the AI momentum. For the UMC adjustable market, we have observed that inventory for consumer electronics has been digested to a healthy level and the demand for this product is expected to grow moderately while we see the increase in semiconductor content as well. These factors will be the main driver for the low-single-digit growth in the mature normal market. So I think for UMC adjustable, we're projecting low-single-digit growth for 2025. And for UMC, it's our goal that we will outgrow our adjustable market while maintaining our structural profitability.
Maybe one more follow-up. Customers have started to see some upside from the supply chain preview, ahead of potential tariffs in the first half of this year and provide this guidance of low-single-digit growth for 2025. Have you considered some upside from that regard?
Can you say that again? I missed the beginning. Sorry.
No problem. Sorry about that. So just one quick follow-up. When you mentioned this low-single-digit growth for your adjustable market for 2025, I wonder have you considered some upside from the potential supply chain preview ahead of tariffs? Because in recent few months, we have started to hear from fabless indicating that some rush orders are coming through from China ahead of the tariff.
Yes, I got it. Okay. Well, for Q1, our guidance is somewhat better than the traditional seasonality. We guided shipment will be somewhat flat. The short-term visibility still remains limited, partly due to non-fundamental factors like the U.S. tariff. We certainly hope that Q2 will grow sequentially. While the current projection is not 100% including those, due to the lack of visibility, unless the Q2 can be sustainable, otherwise, we still project that will be low single digit. In other words, that low single digit is not including the tariffs, but we did see better than the traditional seasonality Q1 projection, yes.
Next one, Gokul Hariharan, JPMorgan.
First question on pricing, Jason, what are we assuming? Are we basically taking a one-time price reduction across the spectrum, about 5% or something like that? Also, I wanted to understand, do you feel that you can hold off on any further price declines throughout the course of the year given there seems to be both price pressure from your larger competitors in Taiwan as well as price pressure from a lot of the new capacity on 28-nanometer in China as well?
Certainly. We have seen this trend over the past few years. Our pricing strategy remains consistent, but we will continue to align with market prices, as previously mentioned. At the start of each year, we plan for a one-time pricing adjustment, and we anticipate that the pricing outlook for 2024 will follow a similar pattern, likely resulting in a stable year after that adjustment. To address market pressures, we will enhance our product portfolio, and we expect significant contributions from 22- and 28-nanometer revenues to continue increasing, likely reaching the high 30% range for us. The growing momentum in 22-nanometer capabilities will help counter potential competition in 28-nanometer. Looking ahead to 2025, we plan to distinguish ourselves from our industry competitors in the mature foundry market, aware of the ongoing competition. The geopolitical situation impacting the semiconductor industry is unprecedented compared to the last year and into 2024.
Some initiatives are already underway to improve supply chain resilience in light of the current oversupply in the industry. UMC is one of the few foundry suppliers capable of supporting global fabrication operations. We recognized the necessity for a diverse manufacturing strategy years ago, believing that our technological differentiation is key to our competitiveness. In summary, our pricing strategy remains the same as last year, and we are gaining market share. UMC's varied manufacturing capabilities and competitive technology will continue to differentiate us from competitors. That is our perspective.
Got it. So just one more question on pricing. I remember that a lot of LTA contracts were negotiated back in '21, which came into force in 2022. Many of them were 3- to 4-year contracts. I presume a lot of them are coming up for renewal this year and probably next year. How does that influence pricing? I'm sure clients are going to be asking for lower prices given the current situation compared to back in 2021, 2022. So I just wanted to understand, not just for this year, but like going forward a couple of years, do we think that the price curve is generally going to be downward sloping given this pressure?
I believe pricing is an important factor. The concept of LTA represents a mutual commitment between both the customer and UMC to improve capacity, while customers remain engaged with UMC for future growth. This fundamental aspect has not changed. However, market dynamics are currently placing some pressure on those LTAs. We all acknowledge the influence of market prices. We are working closely with our customers to navigate this situation and help them remain competitive in their markets. Ongoing discussions are taking place with our LTA partners, with the objective of continuing our collaboration and supporting their competitive efforts moving forward.
Well, Gokul, did you mute yourself?
Yes. Sorry. Sorry about that. So maybe one last question. Could you talk a little bit about the capacity ramp for the Singapore fab? Are you taking a little bit of a slower cohort of action? How much capacity do you expect to come online for the Singapore fab this year and potentially next year? And this CapEx kind of moderation down to TWD 1.8 billion from TWD 3 billion, is that where we should expect it over the next couple of years? Or is it just a 1-year thing?
Sure. I mean, the capacity expansion in 2025, our Singapore, the P3 production win is still on track, starting from January 26. That milestone remains unchanged. However, the volume has somewhat adjusted. Given the current market dynamics and customer alignment, we are adjusting that ramp profile, but the timing did not change. The 2024 CapEx, mainly spending in the P3 building facility, is the major portion, which is already complete and deployed. For the CapEx projection going forward, we do not expect there will be any upticks on the current level.
Okay. Understood. Lastly, with regard to the gross margin, considering Chi-Tung's guidance on depreciation and the anticipated revenue growth in the high 20s, it appears that we are expecting mid-single-digit growth. Can we expect that gross margin will remain around this mid-20s level throughout the year? Is that an accurate assessment of the margins?
It's difficult to guide the full year, especially on quarterly patterns for the gross margin right now. I think all we can say is we try very hard, at least from an EBITDA margin point of view, to have intact structure EBITDA margin. Of course, the depreciation numbers will go up continuously over the next 2 years. But our goal is really to have intact structure profitability. Hopefully, we will see more 22-nanometer shipment along with a recovering capacity utilization rate to offset the increased cost side of the equation.
Next one, Brad Lin, Bank of America.
I have 2 questions. One is on the silicon interposer business outlook. Would you please share the latest updates and expansion plans for UMC's silicon interposer business? And also beyond AI applications, do you foresee non-AI applications adopting this kind of so-called CoWoS technologies as well?
Sure. For the silicon interposer existing capacity, there's no plan to expand. Some of the products are already migrating to the next generation, and we do have a product pipeline that's coming into this, but there is a caveat between that. For the application being associated with the interposer as well as advanced packaging, we continue to see quite a bit of momentum on that. I can probably give you a bit of detail on that front: our customers are seeing increased requirements for communication bandwidth and energy efficiency, particularly in the AI application. We foresee there will be increasing need for the integrated memory, logic, and even sensors' chiplet for better AI performance. We have broadened our packaging technology offering beyond the interposer, including the 2.5D interposer, which will allow us to develop a new system architecture with multiple partners, enlarging our addressable market. That's where we stand on the current interposer, and there will be no expansion on that. Meanwhile, we're expanding our broader knowledge of advanced packaging offerings for future engagement.
That's pretty clear. It sounds like despite limited expansion, we should see more value addition and high utilization rate for this business line. Am I correct? So my second question would be on the geopolitical impacts on the customer orders. Have you observed any significant share gains from overseas clients due to the rising geopolitical dynamics? When does the management expect this to drive revenue growth meaningfully? And conversely, do you anticipate any downside risk from the so-called China-for-China trend here?
We don't see any downside. In fact, we don't perceive various directions. Some products are moving into certain regions while others are moving out. There are various dynamics and adjustments from our customer sourcing strategy. UMC's diversified manufacturing provides supply resilience to meet different customer needs. We believe we are well-positioned and are eager to take advantage of any opportunities from our customers. Right now, there are many ongoing projects that are expected to materialize after 2025.
Next question, Charlie Chan, Morgan Stanley.
First of all, Happy New Year. The earthquake is a little bit unfortunate and hope your financial damage will be fully recovered later this year. First of all, I wasn't very clear about your comments about second-quarter seasonality, Jason. Can I double confirm that you said Q2 you're expecting fab utilization to go a little bit higher and above the seasonal? Can you clarify your comments about second quarter growth?
Thank you, and Happy New Year to you too. We will navigate through this earthquake situation quickly, allowing us to recover and assist our customers with their deliveries and wafer shipments. Regarding Q2, it's too early to provide guidance. We usually offer quarterly guidance and outlook projections. I mentioned earlier that our Q1 2025 performance is better than seasonal expectations. Short-term visibility is limited due to factors such as U.S. tariffs. We hope to see sequential growth in Q2, but currently, visibility remains low. We will wait for more clarity before providing further guidance. In the meantime, we are confident in our current 22-nanometer product pipeline, which will begin production this year and contribute to our growth in the second half of 2025. We expect revenue growth in 2025, largely based on the anticipated launch of the 22-nanometer products in the latter half of the year.
Yes, you were accurate about last year's industry growth, noting single-digit growth, which turned out to be around 6% for the overall foundry sector. I agree that inventory levels are healthy and the increase in semiconductors for PCs and smartphones may improve this year compared to last. Moving on to the advanced packaging business, you mentioned interposer during the last call, but there has been recent news about moving towards wafer-on-wafer technology for a U.S. customer. Could you elaborate on these developments? Additionally, how does your wafer-on-wafer or hybrid bond technology compare to industry peers like TSMC or SPIL? I believe SPIL focuses more on chip-level 3D packaging, so how does your 3D-IC technology measure up against TSMC?
Sure. Yes. First of all, you talked about projection. I do want to clarify inventory projection on our side. We can see the DOI decrease as expected in the third quarter of 2024 with what we have in the quarter in the past. That indicates a stable demand in the end market. In terms of application, the DOI inventory for consumer electronics is approaching a healthy level. However, the DOI remains relatively high in the automotive and industrial sectors, which we believe will still take more time to digest. Coming back to advanced packaging, first of all, we typically do not comment on any market speculation and specific customers. However, we are broadening our packaging technology offering beyond the 2.5D interposer, which we have shipped in the past. The wafer-on-wafer bonding is one of the capabilities of technology that we provide. In addition to that, there is also the interposer with TTC, discrete TTC, and so on. Multiple technology offerings - more like a toolbox for us. We do see the market direction where products will require a higher bandwidth and more efficiency in many different applications. Engaging with our customers with those technology capabilities, we can tailor their solution needs. Our current stage is to equip ourselves to be capable of doing so, and then we will be able to broaden our solutions and serve our customers to enlarge our addressable market.
I see. What about applications related to optics, specifically photonic integrated circuits? I recall you mentioned the need for hybrid bonding in both photonic ICs and electronic ICs. Is UMC considering entering the CPO supply chain as well? It seems that NVIDIA is not the only player in this space, as other customers like Broadcom and Marvell are also pushing for these CPOs. Does UMC have any plans to participate in this market?
Well, certainly, we are not going to miss out any potential growth opportunity. When we talk about the increase in communication bandwidth and efficiency, it applies to many different applications, not limited to the current GPUs and processors. There are others that require integrating memory logic, like the GPU, but in different bandwidth and capability. So yes, we do see various applications that require such technologies. Again, we believe by broadening our technology offerings, it will help us to enlarge our addressable market without missing out.
Yes. And last one from me is really your key partner, Intel. There was an organizational change. I'm not sure if you are comfortable commenting on shares. What does that mean for your partnership with Intel, any positive or negative given the recent senior management and CEO change at Intel?
Well, what I can share with you is this: the strategic cooperation is definitely the right thing for both companies. Our partner and us are both very committed to bringing this most competitive 12-nanometer solution to the Western footprint. We are seeing strong customer interest. We have been working closely and diligently to accelerate the delivery schedule since day one. At the moment, we are verifying the silicon performance already for the pilot line, and we expect the early PDK will be ready for the first wave of customers by 2026 as planned. Therefore, we believe this cooperation will be beneficial for the industry, our customers, and both companies. I do not foresee any changes in this cooperation. Our key focus is on WiFi connectivity, high-speed interface SoC products. In addition to collaborating on the 12-nanometer larger process, we are also exploring potentials in the specialty technology solution to further complement our portfolio with diverse product applications. We remain very excited about the engagement and are very committed, and we see very good progress at this point.
Next one, Bruce Lu, Goldman Sachs.
Jason, the first question is a quick one. The Europe business went up quite a lot in the fourth quarter. But application-wise, we see that others' application went up a lot in the fourth quarter. Can you tell us a little bit more detail? Do you have any market share gains there or any project win? What is the application that drives the Europe growth in the fourth quarter?
Chi-Tung actually commented about this earlier. The pickup in Q4 automotive business really reflects customers' modulation for their inventory management. We see this one-off uptrend, and then we will align that to the end market demand, which I also touched on the inventory situation, the automotive and industrial sectors even though it remains high and will still take more time to digest. So it's more of inventory.
Okay, the next question is about your average selling price, which saw a mid-single digit decline in the first quarter. Is this due to a product mix issue, or is it mainly a one-off situation? Is the decline fairly uniform across different categories, or are there specific categories experiencing greater price erosion, such as 28 or 8-inch compared to 12-inch?
Right. I mean, you're absolutely right. It is the blended base. The one-off mid-single digit is at a blended base. Some nodes that actually went social are commodity-like solutions; they have deeper erosion. However, we have a differentiated technology that has a lower erosion, and then combining it with the product mix for the quarter, then we'll try to manage that at a one-off at a mid-level, mid-single-digit adjustment.
Can I assume your 28 is a differentiated node with lower than mid-single-digit erosion?
Yes. I can't comment on every single node, but I can tell you that not only 28 and 22 but also some other specialty technologies have a blended basis that is better than average, and some are even higher.
Lower erosion means that the ASP erosion is less than the corporate average of mid-single digits for 28 and 22.
Yes. If the blended is 5%, I mean some are smaller than 5%, some are higher than 5%, right?
Okay. One last question is whether you consider, as you mentioned, that you are the only one who can manufacture the wafer in different geographical locations, and if TSMC could clarify that they charge a premium in non-Taiwan capacity. Do you think about charging a premium for your Singapore or Japan fabrication facilities with higher pricing?
I mean the pricing is an important topic, right? We will continue aligning with our customers with the angle that we need to help them to compete in their marketplace. We will respect and follow that market pricing. From a strategy point of view, we are unchanged. But from a competitiveness point of view, we will continue aligning with our customers to maintain that. It's important to note that we look at this market in a way that we believe our market is growing in a low single digit, and we want to position ourselves to gain share in our adjustable market while striking a balance between growth and profitability, which we have shown consistently in our financial performance and with a resilient track record in the past. We believe that with a healthy financial structure, we have the flexibility to continue investing in technology development and broaden our offerings for future growth. We want to stay competitive. Meanwhile, we want to manage that balance.
Next one, Jason Zhang, CLSA.
My first question is in terms of your target utilization rate. As you are a competitor in China, I think their utilization rate already reached a very high level. So I just want to know which kind of levels of your utilization rate is more reasonable for UMC this year or in the coming year?
We consistently aim to improve our utilization rate, but we won't do so at an unreasonable cost. Currently, our overall utilization rate is projected to be around 70%. Some facilities have higher utilization, while others are lower. For example, our 8-inch loading is still in recovery mode, and we are working to enhance our offerings to improve that in the long run, although it currently falls below the corporate average. On the other hand, our 28 and 22 processes are performing above the corporate average. We are observing strong momentum in tape-outs. Generally speaking, as I mentioned to Bruce, I believe a 70% utilization rate is a reasonable target for maintaining the right balance at this time. We will continue to strive for even better utilization rates.
Got it. So my second question is in terms of your competition. Your Chinese competitor now already has a very high utilization rate. So have you seen lower competition from those Chinese players this year?
I cannot comment on the behavior of our competitors. However, it's essential for us to remain competitive in various areas. Our average selling price, solutions, and manufacturing performance all need to be on par with the competition. We view this as a long-term commitment, not just a short-term situation. Looking ahead to 2025, we anticipate that we will grow faster than our addressable market, regardless of whether pricing pressures increase or decrease. We are actively pursuing several new initiatives to foster future growth by enhancing our current offerings and expanding our addressable market. For instance, we are progressing with our specialty technology roadmap, exemplified by the launch of the industry-first 22-nanometer high-voltage technology in May 2024, which positions us well for next-generation handsets. Additionally, our high-voltage platform has already found adoption in OLED displays for next-generation tablets and laptops.
We plan to advance our roadmap into the 14 high-voltage solutions to further solidify our leadership. There are still growth opportunities in this expanding industry. With enhancements to our existing portfolio, we can tap into a larger addressable market by implementing the right financial model to support our future investments aimed at capturing these growth opportunities. Our goal is not solely to compete based on current utilization rates; rather, we aspire to maintain a balanced and healthy corporation that continues to invest for the future and remains relevant in the industry.
Okay. Okay. Got it. My last question is in terms of the demand side. In terms of your application portfolio, which segments did you see as having a better demand, such as computers, consumer, or smartphone? Have you seen the demand recovery after the Chinese government's subsidy in Q1 or in Q4?
For Q1 outlook, we expect the revenue contribution in the consumer segment will increase due to our strength in WiFi, digital TV, set-top box, and display drivers. The rest of the segment is either flat or slightly declining. We talked about the Q1 outlook, despite that the consumer is stronger, but we think it could be triggered by either the tariff or the subsidy because we see Q1 has better than traditional seasonality behavior. However, we're just hoping that Q2 can sustain that. At this point, due to the limited visibility, we couldn't give you the Q2 guidance, but Q1 is better than the seasonality.
And ladies and gentlemen, we are taking the last question. The last one, Brad Lin, Bank of America.
One follow-up. As Jason highlights, advanced packaging is a key business growth driver for UMC to outpace the industry and also for future growth while eyeing on the disciplined CapEx number itself. Should we also expect a higher portion of the CapEx spend by UMC in the future to increase for this advanced packaging kind of service like our industry leader?
In our business, it's actually two major investments. One is investment in technology development, and the second is investment into CapEx. Once the technology is developed and the customer aligns in place, we'll certainly deploy the capacity investment. The CapEx will have that. Given our past few years of CapEx investment, given the current market dynamics, I think those advanced packaging CapEx would not affect the major trend of our CapEx projection. I think it will still be within our current trend.
And we thank you for all your questions. That concludes today's Q&A session. I'll turn things over to UMC Head of IR for closing remarks.
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, and we will also take this moment to wish everyone a Happy New Year. Happy Chinese New Year. Thank you.
Ladies and gentlemen, that concludes our conference for 4Q '24. Thank you for your participation in UMC's conference. There will be a webcast replay within 2 hours. Please visit www.umc.com under the Investors, Events section. You may now disconnect. Thank you, and goodbye.