Chi-Tung Liu: First of all, we don’t think the 28 decline rate is higher than corporate average, it’s probably in line. So maybe we can provide you with a detailed calculation later on. But our outlook for 28-nanometer actually is one of the better segments. Maybe Jason will comment further on that.
Jason Wang: Yes. For the 28 loading — well, first of all, like Chi-Tung said, we probably can provide you more detail on that data. But in our view, the loading will gradually improve over the next few months and will soon exceed about 90% of the loadings. And the 28-nanometer application includes the OLED driver, DTV, Wi-Fi 6 and 6E. And we actually foresee a furnace in 22 and 28 demands, which will be fulfilled with additional capacity come online as well. So we actually feel fairly confident about that. The — you also mentioned about the competitive landscape as well, right?
Randy Abrams: Yes. That was more on like the OLED driver part if like your Taiwan and China rivals are making inroads there.
Jason Wang: Well, I mean, for the 28, in general, we actually remain very confident with our 28 and 22 business. You’re talking about the OLED particularly and for our OLED drivers, we believe we deliver much more superior power consumption performance area adventure compared to any industry peers. And so our leading position of 22 and 28 technology will be reflected in our market share in that driver space. And this will actually continue. .
Randy Abrams: Okay. Great. Good to see that area holding up well.
Operator: And next question is from Brett Simpson, Arete Research.
Brett Simpson: I wanted to ask about your recent extended LTA with Infineon. I think you announced this back in March, it was 14-nanometer. It looks quite a sizable agreement. Can you maybe talk more about this agreement and when it maybe starts to ramp up? And how should we think about the size of this deal?
Jason Wang: Well, I mean, we typically don’t comment specific on customers. But they are part of our auto market focus, and we will continue working with the key automotive semi supplier like Infineon and through the JDP and capacity expansion. This recently announced a long-term agreement with the customer on the 40-nanometer nonvolatile memory MCU is serving the auto market. And we actually have — we are actually very excited for such engagement, and we’re looking forward to the growth of that. The LTA specifically, LTA is actually a 2, it also becomes more of a common practice in the semi industry now because the industry is to recognize this — the semiconductor supply is essential. So to plan and future mutual growth the strategic customers are waiting to do this long-term agreement with us to secure the capacity. So for this particular relationship is covered such arrangements.
Brett Simpson: Can you maybe just confirm how your LTA pipeline looks? I think you’ve talked about TWD 18 billion previously. Has that — can you give us an update on what that number looks like today?
Jason Wang: Well, they’re still in a similar range. They didn’t have much changes. Most of our LTA agreement remain intact. We see slightly increase and — but we also see some adjustments. So they still stay in the relatively same range.
Brett Simpson: Okay. And I just had a 2-part question on China, if you don’t mind. One, can you give us an update on the China JV. I think you’ve signaled your intent to buy out the remaining ownership. Have you got approval from this from the Chinese government? Is that still on track? And then the second part of the question is, we saw the U.S. government introduced a new national defense outlay last year, which is likely to trigger U.S. and maybe also European fabless companies moving away from using Chinese foundries. Can you maybe — are you seeing any benefit from this? Have you — are you anticipating any boost from migrations perhaps to use UMC?
Chi-Tung Liu: Yes. For the first question regarding UMC buybacks, we have retained all the necessary approval already. And we are going through the previously agreed contract. So I think it’s moving along smoothly. So we do expect to close the deal in short range of time. So it should be happening this year.
Jason Wang: For your second question about the current geopolitical dynamics. The — first of all, we think this all this dynamics affecting the customers’ supply chain resilience planning. All customers need to looking into this and started evaluating their supply chain resilience. And UMC is definitely part of that consideration. And while we have a very diversified capacity between China, Taiwan, Singapore and Japan, that does give us a much better option to work with our customer. And in that context, we do see actually 2 ways. One is we’re seeing some customer is moving product to other locations outside of China. But at the same time, and we also see some of the customers adding the gift to take advantage of the China gap that creates. So we — given our diversified spaces now across Asia and with the comprehensive technology offering, net-net, our product mix will be balanced between all our fabs.
Operator: Next question, Bruce Lu of Goldman Sachs.
Bruce Lu: The first question is regarding to your ASP. Can you help me to understand that your first quarter the 20 and 40-nanometer revenue contributions lower, but your ASP is 1 notch up. And also, when you guided for second quarter, which is flattish, but you did increase your 28-nanometer capacity in the second quarter, which is supposed to be the blended base ASP should go up. So can you help me to understand the ASP trend, especially when we have a lot of work but someone is cutting the price or you try to offer a lot of like as discounts to your customers, but you didn’t show up on your results
Jason Wang: Well, I mean, like you said, the blended ASP is a result of the product mix and — so any mix change will probably affecting the result of the blended ASP. And as of now, given our current projected product mix and not mix we believe our blended ASP will be burn quarter-over-quarter. It will probably be flat. Now as far as the pricing strategy, our pricing strategy is to closely working with our customers to uphold their competitiveness and relevance in their respective market space and secure their market share. And based on that strategy, our Q2 ASP outlook will remain first. The — in our consideration in pricing, it’s not just based on the pricing only, you also have based on the value proposition, supply chain relevance and so the EO technology offering and so on. So all that is part of the ASP consideration, the pricing consideration. And with all that included, our current ASP outlook will remain firm.
Bruce Lu: I see. But does means that is a like-to-like basis or company average branded ASP for second quarter?
