Jason Wang : I mean, as we said, we continue enhance our product portfolio and the product mix and for those specialty technologies, it will continue helping us to achieving that target. So, from a mix standpoint, it will be benefit from it.
Operator: Thank you. Ladies and gentlemen, we’re running out of time. So, we’re taking the last one and the last question from Gokul Hariharan, JP Morgan. Go ahead, please.
Gokul Hariharan : I just have one question. Given this comment about the depreciation increase next year, could we talk a little bit about what are our — like medium-term gross margin targets? Like do we expect to still remain within the 35% to 40% kind of gross margin range? And especially since you’re also thinking about potentially developing some FinFET nodes, especially the 12 animated nodes in 2025 and beyond, which are likely to be a little bit more expensive. Just wanted to understand what is the margin kind of range that management is comfortable operating in over the next couple of years?
Jason Wang : Yes, of course. Thank you for the question. When Charlie asked about our margin and the outlooks, I kind of adding a comment about, it’s our belief that our structural probability is become much resilient and healthier. And so, it’s also our belief once the loadings return and the probability will also return to a healthier level. When we talk about a healthier level, we believe it’s going to be in a high 30%, 40% range for in a very high loading situation. So, we continue marching into that direction and we have confidence that we — that’s fairly achievable. But given the past few years, we’ve just gone through the super cycle and now we’re going through the down cycle and we want to test that situation, and hopefully that we can report to you more clearly in a later day.
But we while we have a mapping model and model it, we think we have a roadmap to achieve that. And in turn, when can we achieve that? We will be giving let’s give that test and then we’ll report that on a tiny bit.
Chi-Tung Liu: As for 12 – capacity build-up, as Jason mentioned, it has to be justified. So, we will do it with the precondition that it won’t damage to our overall corporate average structure margins. So, we mentioned that it could be coming from some of the conversion of 22, 28 capacity, which will result in a better margin compared to Greenfield, FinFET capacity. But we are also working on other solution too. So, it will be a few years out in terms of massive FinFET capacity. So, we still will have a few more options coming in the pipeline. We’ll definitely keep that discipline. As you can see, for the past few years, we have been keeping that discipline.
Gokul Hariharan: Definitely. Thank you. One last question is on the 8-inch side, it seems like in this downtown 8-inch is facing lot more pressure. Many staple products on 8-inch have already migrated to metro 12 inch, whether it’s 65 nanometer, 55 nanometer, or even 40 nanometer. So how do you see the 8-inch evolution in the next couple of years? Do you feel that 8-inch, at least some of the capacity will start becoming a little bit obsolete in the industry? Given many applications, really high-volume applications that are migrating to mature 12 inch?
Jason Wang: Sure. I mean, the reason 8-inch loading has declined as a result of a demand softness across communication, consumer, and computing segments. We still believe that 8-inch is the mainstream no for PMIC high voltage application. So, we expect that 8-inch loading will improve when the market rebound. The meanwhile, we do see some intensified com competition in the 8-inch landscape, like you said, such as a 12-inch supplier participating in the 8-inch business. Even with some of the question earlier, the Chinese local manufacturing fulfill the demands and for the domestic demands and the pricing pressure as well. So, UMC will continue to strengthen our technology competitiveness, enhance our product and customer portfolio to adjust our — and also adjust our pricing strategy to address the 8-inch competition.
Now, as far as the loading recovery, in the short term, I think the pricing will mitigate sound, the 8-inch business when the demand recovers for the longer term. Well, given the time and the resource required to enhance the fundamental position for the competitiveness solution, where the pricing is not only alternative, and we probably have to do with all above-mentioned effort and focus, and however, we do expect 8-inch loading and product composition will improve to a healthier level. And for the recovery mode, we’ll probably undertake for at least 12 months.
Operator: Ladies and gentlemen, we thank you for all your questions. This concludes today’s Q&A session. I will now turn it over to UMC Head of IR for closing remarks.
Michael Lin: 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 irumc.com. Have a good day.
Operator: Thank you. Ladies and gentlemen, that concludes our conference for 3Q ’23. Thank you for your participation in UMC’s conference. There will be a webcast replay within two hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Goodbye.
