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United Microelectronics (UMC)
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United Micro (UMC) AI Stock Analysis

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UMC

United Micro

(NYSE:UMC)

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Outperform 76 (OpenAI - 4o)
Rating:76Outperform
Price Target:
$8.50
▲(15.18% Upside)
UMC's overall stock score reflects strong financial performance and attractive valuation, supported by robust earnings call insights. While technical indicators are neutral, the company's strategic positioning in advanced technology and solid dividend yield provide a compelling investment case.
Positive Factors
Advanced Technology Leadership
UMC's leadership in 22nm technology positions it strongly in the semiconductor market, driving significant sales and expected growth into 2026.
Strong Balance Sheet
A low debt-to-equity ratio indicates conservative financial management, providing UMC with stability and flexibility for future investments.
Strategic Capacity Expansion
The 55nm BCD platform readiness enhances UMC's product offerings, targeting diverse applications and strengthening its competitive position.
Negative Factors
Decline in Net Income
A decline in net income indicates potential profitability challenges, which could impact UMC's ability to reinvest in growth and innovation.
Gross Margin Pressure
Persistent gross margin pressure due to high depreciation and currency impacts may limit UMC's profitability and competitive pricing flexibility.
Revenue Growth Challenges
Sluggish revenue growth suggests potential market saturation or competitive pressures, which could hinder UMC's long-term expansion efforts.

United Micro (UMC) vs. SPDR S&P 500 ETF (SPY)

United Micro Business Overview & Revenue Model

Company DescriptionUnited Microelectronics Corporation (UMC) is a leading global semiconductor foundry headquartered in Taiwan. Established in 1980, UMC specializes in the manufacturing of integrated circuits and offers a wide range of advanced technology processes, including CMOS, bipolar, and RF ICs for various applications. The company serves diverse sectors such as consumer electronics, automotive, industrial, and communications, positioning itself as a key player in the semiconductor industry with a strong focus on innovation and quality.
How the Company Makes MoneyUMC generates revenue primarily through its semiconductor foundry services, which involve manufacturing chips for customers on a contract basis. The company's revenue model is largely based on the production of chips using various technology nodes, with pricing influenced by the complexity of the designs and the technology used. Key revenue streams include wafer fabrication, testing, and packaging services. UMC also benefits from long-term partnerships with major semiconductor design companies and OEMs, which provide a steady flow of orders. Additionally, the company has been investing in advanced manufacturing technologies and expanding its capacity to meet the growing demand for semiconductors across multiple industries, thus enhancing its earnings potential.

United Micro Earnings Call Summary

Earnings Call Date:Oct 29, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Jan 28, 2026
Earnings Call Sentiment Neutral
UMC demonstrated strong revenue growth and capacity utilization, particularly in its 22-nanometer technology, and successfully expanded its North American market share. However, challenges such as increased depreciation costs, a decline in net income, and pressure on gross margins due to unfavorable currency exchange rates tempered these achievements.
Q3-2025 Updates
Positive Updates
Revenue Growth and Improved Gross Margin
UMC reported consolidated revenue of TWD 59.13 billion in Q3 2025, with a slight increase in gross margin to 29.8% due to better capacity utilization. Year-over-year revenue growth for the first three quarters was 2.2%.
Increased Capacity Utilization and Wafer Shipments
Capacity utilization rate climbed to 78% with wafer shipments reaching 1 million 12-inch equivalent wafers, driven by demand growth across market segments.
Strong Performance in 22-nanometer Technology
22-nanometer technology accounted for more than 10% of total sales in 2025, with expectations of over 50 product tape-outs and continued revenue contribution growth into 2026.
Geographic Revenue Growth
North American revenue increased to 25% of total revenue in Q3 2025, up from 20% in the previous quarter.
Strategic Technology Developments
UMC announced the readiness of its 55-nanometer BCD platform, targeting mobile, consumer, automotive, and industrial applications.
Negative Updates
Decline in Net Income
Net income for the first three quarters of 2025 decreased to TWD 2.54 per share compared to TWD 3.12 in the same period of 2024.
Challenges with Depreciation Costs
UMC faced over a 20% increase in annual depreciation expenses, impacting gross margin despite favorable market conditions.
Decline in Revenue from Asia
Revenue from Asia decreased by nearly 4 percentage points to 63% of total revenue in Q3 2025.
Gross Margin Pressure
Despite improvements, gross margin is expected to remain in the high 20% range due to continued high depreciation and unfavorable foreign exchange impacts.
Company Guidance
During UMC's 2025 third-quarter earnings call, the company provided guidance for the fourth quarter of 2025. UMC anticipates wafer shipments to remain flat compared to the third quarter, with an ASP in U.S. dollars expected to stay firm. The gross margin is projected to be in the high 20% range, while the capacity utilization rate is forecasted to be in the mid-70% range. Additionally, UMC's 2025 cash-based CapEx budget is set to remain unchanged at USD 1.8 billion. The company also highlighted that the 22-nanometer technology platform continues to be a differentiator in the market, with significant growth expected in 2026.

United Micro Financial Statement Overview

Summary
United Micro demonstrates strong profitability with a consistent gross profit margin and a solid balance sheet with low leverage. However, challenges in sustaining revenue growth and moderate cash flow conversion slightly temper the overall financial performance.
Income Statement
75
Positive
United Micro's income statement shows strong profitability with a consistent gross profit margin around 30% and a net profit margin of approximately 17% in the TTM period. However, there is a noticeable decline in revenue growth from previous years, indicating potential challenges in maintaining growth momentum. The EBIT and EBITDA margins remain robust, reflecting efficient operations.
Balance Sheet
80
Positive
The balance sheet is solid with a low debt-to-equity ratio of 0.20, indicating conservative leverage. The return on equity is healthy at 11.28%, although it has decreased from previous years. The equity ratio is strong, showcasing a stable financial position with significant equity backing the assets.
Cash Flow
70
Positive
Cash flow analysis reveals a significant improvement in free cash flow growth at 60.69% in the TTM period, although the free cash flow to net income ratio is moderate at 0.33. The operating cash flow to net income ratio is slightly below 1, suggesting room for improvement in cash generation relative to earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue236.13B232.30B222.53B278.71B213.01B176.82B
Gross Profit68.29B75.65B77.74B125.76B72.05B39.00B
EBITDA73.37B97.35B105.85B153.72B102.08B71.97B
Net Income40.12B47.21B59.69B89.48B51.25B22.86B
Balance Sheet
Total Assets555.40B560.17B546.58B533.05B464.43B377.52B
Cash, Cash Equivalents and Short-Term Investments113.68B115.24B144.88B178.60B170.90B109.57B
Total Debt0.0070.47B64.16B45.61B46.82B41.41B
Total Liabilities0.00194.46B202.86B197.60B183.22B141.74B
Stockholders Equity0.00365.45B343.38B322.47B264.15B235.66B
Cash Flow
Free Cash Flow37.72B5.33B-8.02B62.98B40.39B37.39B
Operating Cash Flow78.90B93.87B86.00B145.86B90.35B65.75B
Investing Cash Flow-36.92B-85.94B-97.79B-54.43B-62.16B-40.11B
Financing Cash Flow-27.54B-39.20B-29.09B-57.25B12.49B-25.60B

United Micro Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.38
Price Trends
50DMA
7.19
Positive
100DMA
7.26
Positive
200DMA
6.88
Positive
Market Momentum
MACD
0.09
Positive
RSI
59.90
Neutral
STOCH
47.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UMC, the sentiment is Positive. The current price of 7.38 is below the 20-day moving average (MA) of 7.47, above the 50-day MA of 7.19, and above the 200-day MA of 6.88, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 59.90 is Neutral, neither overbought nor oversold. The STOCH value of 47.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UMC.

United Micro Risk Analysis

United Micro disclosed 46 risk factors in its most recent earnings report. United Micro reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

United Micro Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$18.92B14.9510.97%6.27%5.87%-20.93%
$9.52B48.967.41%7.18%-60.59%
$20.48B46.735.72%-17.93%-75.83%
$35.07B15.228.40%2.22%104.60%123.50%
$37.18B12.37-10.20%1.83%8.50%-7.62%
$22.08B43.023.00%1.42%-17.33%-76.71%
$19.68B-1.01%-0.65%-114.26%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UMC
United Micro
7.71
0.96
14.22%
ASX
ASE Technology Holding Co
16.01
6.65
71.05%
ON
ON Semiconductor
50.08
-19.42
-27.94%
STM
STMicroelectronics
24.47
-1.19
-4.64%
TSEM
Tower
85.17
44.14
107.58%
GFS
GlobalFoundries Inc
35.60
-0.41
-1.14%

United Micro Corporate Events

UMC Reports Q3 2025 Financial Results and Strategic Developments
Oct 29, 2025

On October 29, 2025, United Microelectronics Corporation announced several key developments following its board meeting. The board approved the third quarter consolidated financial statements, revealing a revenue of NT$59.13 billion, a slight increase from the previous quarter, but a 2.2% decrease year-over-year. The company also reported a net income of NT$14.98 billion, with a gross margin of 29.8%. UMC’s 22nm technology continues to show strong market traction, contributing significantly to the company’s sales. Additionally, the board approved a capital budget execution of NT$1,551 million for capacity deployment and the cancellation of restricted shares due to non-fulfillment of vesting conditions. UMC’s strategic focus on specialty technologies and its commitment to climate action, including a pledge for net zero greenhouse gas emissions by 2050, positions it well for future growth and industry leadership.

United Microelectronics Reports Stable Financial Performance for Q3 2025
Oct 29, 2025

On October 29, 2025, United Microelectronics Corporation released its consolidated financial statements for the nine-month periods ending September 30, 2025, and 2024. The report, reviewed by independent auditors, indicates that the company’s financial position and performance remain stable, with no significant issues identified. This financial stability reinforces UMC’s position in the semiconductor industry, providing confidence to stakeholders about the company’s operational health and future prospects.

United Microelectronics Announces Key Resolutions from Shareholders’ Meeting
Oct 28, 2025

On October 28, 2025, United Microelectronics Corporation’s major subsidiary, United Semiconductor (Xiamen) Co., Ltd., held an Extraordinary Shareholders’ Meeting where important resolutions were passed. The key resolution approved amendments to the company’s ‘Asset Acquisition and Disposal Procedures,’ indicating a strategic move to potentially enhance operational efficiency and asset management, which could impact stakeholders by aligning the company’s asset strategies with its growth objectives.

United Microelectronics Subsidiary Calls Extraordinary Shareholders’ Meeting
Oct 27, 2025

On October 27, 2025, United Microelectronics Corporation announced that its major subsidiary, United Semiconductor (Xiamen) Co., Ltd., resolved to convene an extraordinary shareholders’ meeting on October 28, 2025. The primary agenda for this meeting is to discuss amendments to the company’s ‘Asset Acquisition and Disposal Procedures,’ which could potentially impact the company’s operational strategies and stakeholder interests.

United Microelectronics Announces Q3 Board Meeting and New Bond Issuance
Oct 21, 2025

On October 21, 2025, United Microelectronics Corporation announced the date for its Q3 2025 Board Meeting, scheduled for October 29, where the consolidated financial report will be reviewed. Additionally, the company supplemented its April 2025 resolution with details on a NT$5,000 million unsecured straight corporate bond issuance, set at a fixed rate of 1.70% for three years, aimed at debt repayment. This financial maneuver is expected to strengthen UMC’s fiscal stability and enhance its market position.

United Microelectronics Schedules Q3 2025 Investor Conference
Oct 15, 2025

On October 15, 2025, United Microelectronics Corporation announced that it will hold its Q3 2025 Investor Conference on October 29, 2025, via an online teleconference to discuss its financial and operating results. Additionally, the company reported changes in the trading and pledging of its common shares by directors, executive officers, and major shareholders for September 2025, indicating a decrease in shares held by some executives.

United Microelectronics Reports September Sales Growth
Oct 7, 2025

On October 7, 2025, United Microelectronics Corporation reported its financial performance for September 2025, highlighting a 5.20% increase in net sales compared to the same period in 2024, reaching NT$19,927,175 thousand. The announcement also detailed the company’s endorsements, guarantees, and financial derivative transactions, indicating a stable financial position with no funds lent to other parties and a slight decrease in endorsements and guarantees compared to the previous month. These results reflect UMC’s continued growth and stability in the semiconductor industry, providing positive implications for stakeholders.

United Microelectronics Announces Strategic Software Acquisition
Sep 22, 2025

On September 16, 2025, United Microelectronics Corporation, through its subsidiary United Semiconductor Japan Co., Ltd., announced the acquisition of software for production from Siemens Electronic Design Automation Japan K.K. This transaction, valued at NT$346,853,518, is a strategic move to enhance the company’s production capabilities. The acquisition signifies a non-related party transaction, emphasizing UMC’s commitment to advancing its technological infrastructure and maintaining its competitive edge in the semiconductor industry.

United Microelectronics Corporation Announces Investor Conference Participation and Shareholder Trading Activities
Sep 10, 2025

On September 8, 2025, United Microelectronics Corporation announced its participation in the ‘Taiwan Summit 2025’ investor conference, scheduled for September 15-17, 2025, at the W Hotel Taipei, organized by UBS. Additionally, on September 10, 2025, UMC reported trading activities involving its directors, executive officers, and significant shareholders for August 2025, highlighting changes in shareholdings and pledges, which could impact stakeholder perceptions and market dynamics.

United Microelectronics Reports August 2025 Financials
Sep 4, 2025

On September 4, 2025, United Microelectronics Corporation reported its financial performance for August 2025, highlighting a 7.20% decrease in net sales compared to the same period in 2024. Despite this decline, the company saw a year-to-date increase of 1.86% in net sales. The report also noted no funds lent to other parties, a slight increase in endorsements and guarantees, and minimal activity in financial derivatives, indicating stable financial management. This announcement reflects the company’s ongoing efforts to maintain its market position amidst fluctuating sales figures.

United Microelectronics Announces Subsidiary Merger with PURIUMFIL
Aug 13, 2025

On August 13, 2025, United Microelectronics Corporation announced that its subsidiary, Tera Energy Development Co., Ltd., will merge with PURIUMFIL Inc., with Tera as the surviving entity. The merger, set to be effective on October 3, 2025, aims to integrate resources, improve operational performance, and enhance competitiveness. The transaction will be conducted in cash, with Tera acquiring PURIUMFIL shares at NT$17 each. This strategic move is expected to expand business areas and reduce costs without significantly impacting shareholder interests.

United Microelectronics Announces Key Subsidiary Developments and Capital Reduction
Aug 12, 2025

On August 12, 2025, United Microelectronics Corporation announced several key developments involving its major subsidiary, United Semiconductor (Xiamen) Co., Ltd. These include the election of a new board member, Lin Wei-Sheng, and the resolution to release him from non-competition restrictions. Additionally, UMC reported a capital reduction due to the cancellation of the RSA, with minimal impact on financial statements. The trading activities of directors and executive officers in July 2025 were also disclosed, highlighting changes in shareholdings.

United Micro Reports July 2025 Financial Results
Aug 6, 2025

On August 6, 2025, United Microelectronics Corporation reported its financial performance for July 2025, indicating a 4.10% decrease in net sales compared to July 2024, amounting to NT$20,040,049 thousand. Despite this monthly decline, the year-to-date net sales showed a positive growth of 3.27% over the previous year. The report also highlighted that there were no funds lent to other parties, and the endorsements and guarantees balance decreased from the previous month. Additionally, the company engaged in financial derivatives transactions, with a noted loss from fair value adjustments but a realized profit from written-off trading contracts. These financial activities reflect the company’s ongoing efforts to manage its financial operations and market positioning.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 30, 2025