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United Microelectronics Corp. (UMC)
NYSE: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 78 (OpenAI - 4o)
Rating:78Outperform
Price Target:
$8.00
▲(10.19% Upside)
United Micro's overall stock score is driven by its strong financial performance and attractive dividend yield, which are significant strengths. The technical analysis and earnings call provide a mixed outlook, with some positive momentum but also challenges from foreign exchange impacts and market uncertainties. The valuation is balanced, with a reasonable P/E ratio and a strong dividend yield. These factors together position UMC as a solid investment within the semiconductor industry, albeit with some caution due to external market conditions.
Positive Factors
Strong Financial Position
A robust cash position enhances UMC's ability to invest in growth opportunities, manage debt, and withstand market volatility, supporting long-term stability.
Advanced Technology Revenue Growth
Growth in advanced technology revenue indicates UMC's competitive edge in high-demand segments, driving future profitability and market share.
Strategic Merger
The merger is expected to enhance operational efficiency and competitiveness, potentially expanding UMC's business areas and reducing costs.
Negative Factors
Decline in Gross Margin
A declining gross margin can pressure profitability, indicating potential challenges in cost management and pricing power.
Foreign Exchange Impact
Adverse FX impacts can erode revenue and profit margins, complicating financial forecasting and strategic planning.
Negative Free Cash Flow Growth
Negative free cash flow growth may limit UMC's ability to fund new projects or return capital to shareholders, impacting long-term growth.

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

United Micro Business Overview & Revenue Model

Company DescriptionUnited Microelectronics Corporation operates as a semiconductor wafer foundry in Taiwan, Singapore, China, Hong Kong, Japan, the United States, Europe, and internationally. The company provides circuit design, mask tooling, wafer fabrication, and assembly and testing services. It serves fabless design companies and integrated device manufacturers. United Microelectronics Corporation was incorporated in 1980 and is headquartered in Hsinchu City, Taiwan.
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:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance with positive developments in wafer shipments, advanced technology revenue, and a strong cash position. However, significant challenges due to foreign exchange impacts and lower gross margins compared to the previous year were evident, alongside uncertainties in market conditions.
Q2-2025 Updates
Positive Updates
Increased Wafer Shipments
Wafer shipments in Q2 2025 increased to 967,000, up about 6.3% quarter-over-quarter, primarily driven by communications in imaging signal processors, NAND controllers, WiFi, and LCD controllers.
Growth in Advanced Technology Revenue
Revenue from 22- and 28-nanometer technology reached a record high, now accounting for 40% of total sales, driven by market share gains in wireless communications.
Strong Financial Position
Cash remained over TWD 100 billion, reaching approximately TWD 111 billion at the end of the first half of 2025.
Stable ASP and Product Mix
ASP edged up slightly in Q2 2025 due to a better product mix, with a low single-digit increase driven by the higher 22 and 28 product mix.
Negative Updates
Foreign Exchange Impact
The unfavorable foreign exchange movement of the NT dollar reduced the gross margin by nearly 3 percentage points, affecting revenue growth.
Decline in Gross Margin Year-over-Year
Gross margin for the first half of 2025 was 27.7%, compared to 33.1% in the same period of 2024, attributed to increased depreciation and foreign exchange impacts.
Uncertain Market Conditions
Adverse foreign exchange movements and geopolitical risks, including potential U.S. tariffs, are expected to impact Q3 2025 revenue.
Company Guidance
During UMC's second quarter 2025 earnings call, the company provided guidance for the third quarter, highlighting several key financial metrics. UMC reported a consolidated revenue of TWD 58.8 billion for Q2 2025, with a gross margin of 28.7% and a net income attributable to shareholders of TWD 8.9 billion. Wafer shipment increased by 6.3% quarter-over-quarter, resulting in a utilization rate increase from 69% in Q1 to 76% in Q2. For the third quarter, UMC expects wafer shipments to increase by a low single-digit percentage, although adverse foreign exchange movements could lead to a decline in NT dollar-denominated revenue. The gross margin for Q3 is anticipated to be approximately equal to that of Q2, assuming the current foreign exchange rate remains stable. UMC also maintained its 2025 CapEx budget at USD 1.8 billion and plans a capacity increase from their facility in Xiamen. The call emphasized UMC's focus on expanding its 22- and 28-nanometer technology offerings, which now represent 40% of the company's total revenue.

United Micro Financial Statement Overview

Summary
United Micro's financial performance is strong, with robust profitability and a solid balance sheet. The company shows consistent revenue growth and effective cash flow management, although there are concerns about the decline in free cash flow growth.
Income Statement
85
Very Positive
United Micro's income statement shows strong profitability, with a consistent gross profit margin and robust net profit margin. The TTM shows a gross profit margin of 31.16% and a net profit margin of 18.91%. The revenue growth rate from 2023 to TTM is 5.38%, indicating solid growth. However, the slight decline in net income suggests potential challenges in maintaining profit momentum. Overall, the company's profitability and revenue growth are commendable, but maintaining net income growth will be crucial.
Balance Sheet
88
Very Positive
The balance sheet of United Micro is solid, with a low debt-to-equity ratio of 0.15 and a strong equity ratio of 68.17% in the TTM period. The return on equity (ROE) stands at 11.40%, indicating effective use of equity to generate profits. The company's financial stability is underscored by a significant equity base and prudent leverage practices, positioning it well for future growth. However, a slight increase in total liabilities warrants monitoring.
Cash Flow
80
Positive
United Micro's cash flow statement highlights a strong operating cash flow, with a healthy operating cash flow to net income ratio of 2.18 in the TTM period. Free cash flow growth rate is negative from 2023 to TTM, which is a concern, but the free cash flow to net income ratio remains positive. The company efficiently generates cash from operations, but the decrease in free cash flow suggests potential challenges in capital expenditure management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue237.49B232.30B222.53B278.71B213.01B176.82B
Gross Profit71.10B75.65B77.74B125.76B72.05B39.00B
EBITDA77.52B97.35B105.85B153.72B102.08B71.97B
Net Income39.65B47.21B59.69B89.48B51.25B22.86B
Balance Sheet
Total Assets548.14B560.17B546.58B533.05B464.43B377.52B
Cash, Cash Equivalents and Short-Term Investments123.74B115.24B144.88B178.60B170.90B109.57B
Total Debt53.77B70.47B64.16B45.61B46.82B41.41B
Total Liabilities211.10B194.46B202.86B197.60B183.22B141.74B
Stockholders Equity336.87B365.45B343.38B335.11B280.98B235.66B
Cash Flow
Free Cash Flow32.84B5.33B-8.02B62.98B40.39B37.39B
Operating Cash Flow96.25B93.87B86.00B145.86B90.35B65.75B
Investing Cash Flow-60.84B-85.94B-97.79B-54.43B-62.16B-40.11B
Financing Cash Flow-39.68B-39.20B-29.09B-57.25B12.49B-25.60B

United Micro Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.26
Price Trends
50DMA
6.95
Positive
100DMA
7.22
Positive
200DMA
6.70
Positive
Market Momentum
MACD
0.04
Negative
RSI
68.33
Neutral
STOCH
95.54
Negative
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 7.26 is above the 20-day moving average (MA) of 6.82, above the 50-day MA of 6.95, and above the 200-day MA of 6.70, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 68.33 is Neutral, neither overbought nor oversold. The STOCH value of 95.54 is Negative, 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
78
Outperform
$17.92B14.4210.98%6.77%5.46%-26.72%
73
Outperform
7.49B38.537.08%7.18%-60.59%
68
Neutral
20.89B47.655.87%-17.93%-75.83%
67
Neutral
24.39B23.3511.59%3.11%4.86%6.44%
67
Neutral
24.62B40.533.66%1.10%-22.97%-78.58%
54
Neutral
18.19B-156.97-1.01%-0.65%-114.26%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UMC
United Micro
7.26
-0.90
-11.03%
ASX
ASE Technology Holding Co
11.46
1.72
17.66%
ON
ON Semiconductor
51.50
-18.24
-26.15%
STM
STMicroelectronics
28.52
0.93
3.37%
TSEM
Tower
69.55
27.37
64.89%
GFS
GlobalFoundries Inc
33.17
-6.18
-15.71%

United Micro Corporate Events

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.

UMC Reports Strong Q2 2025 Results and Strategic Developments
Jul 30, 2025

On July 30, 2025, UMC announced several key developments following its board meeting. The company approved its consolidated financial statements for Q2 2025, reporting a revenue increase to NT$58.76 billion and a net income of NT$8.90 billion. The board also approved a capital budget execution plan amounting to NT$5,370 million for capacity deployment. Additionally, UMC announced the cancellation of restricted shares to employees due to non-fulfillment of vesting conditions. The company highlighted its record high revenue from its 22/28nm business, which accounted for 40% of Q2 sales, and its plans for a new facility in Singapore to enhance supply chain resilience. UMC also received accolades at the 2025 Asia Responsible Enterprise Awards, recognizing its commitment to sustainability and leadership.

United Microelectronics Corporation Releases Mid-Year Financial Statements
Jul 30, 2025

On July 30, 2025, United Microelectronics Corporation released its consolidated financial statements for the six-month periods ending June 30, 2025, and 2024. The review, conducted by independent auditors, confirmed that the financial statements fairly present the company’s financial position and performance. This announcement is significant as it assures stakeholders of the company’s stable financial health and compliance with the financial reporting standards in Taiwan.

United Microelectronics Announces Leadership Changes at Xiamen Subsidiary
Jul 28, 2025

On July 28, 2025, United Microelectronics Corporation announced the resignation of Hsu Chih-Ching from his roles as Director and Vice Chairman at its major subsidiary, United Semiconductor (Xiamen) Co., Ltd. This change is part of a broader restructuring effort, as the subsidiary also plans to hold an extraordinary shareholders’ meeting on August 12, 2025, to discuss the release of a director from non-competition restrictions and elect a new board member. These developments indicate a strategic shift within the subsidiary, potentially impacting its governance and operational focus.

UMC Announces Software Acquisition and Upcoming Financial Events
Jul 22, 2025

On July 14, 2025, UMC announced the acquisition of software for production from Synopsys International Limited, Taiwan Branch, for a total transaction price of NT$534,029,918. This acquisition is expected to enhance UMC’s production capabilities. Additionally, UMC will hold an investor conference on July 30, 2025, to discuss its Q2 2025 financial and operating results, and a board meeting is scheduled for the same day to review the Q2 2025 consolidated financial report.

UMC Reports Significant Share Trading and Pledging Activities in June 2025
Jul 10, 2025

On July 9, 2025, United Microelectronics Corporation reported significant trading activities involving its directors, executive officers, and major shareholders for June 2025. The report highlighted a decrease in the number of shares held by these stakeholders, indicating a potential shift in their investment strategies. Additionally, there was a notable pledge and clearance of UMC common shares, reflecting changes in the company’s internal financial maneuvers. These developments could impact UMC’s market perception and investor confidence.

United Microelectronics Reports Strong June Sales Growth
Jul 7, 2025

On July 7, 2025, United Microelectronics Corporation reported a 7.26% increase in net sales for June 2025 compared to the same month in 2024, reflecting a positive trend in the company’s sales performance. The announcement also highlighted the company’s financial stability, with no funds lent to other parties and a consistent level of endorsements and guarantees, indicating a strong operational footing and potential positive implications for stakeholders.

United Microelectronics Acquires Siemens Software to Boost Production
Jun 30, 2025

On June 26, 2025, United Microelectronics Corporation announced the acquisition of software for production from Siemens Industry Software Limited, Taiwan Branch. The transaction, valued at NT$745,363,123, was finalized after a price negotiation based on market prices. This strategic acquisition is expected to enhance UMC’s production capabilities, potentially strengthening its position in the semiconductor industry.

United Microelectronics Announces Supplement to 2025 Bond Issuance
Jun 20, 2025

On June 18, 2025, United Microelectronics Corporation announced a supplement to its unsecured straight corporate bond issuance, initially authorized by a Board of Directors resolution on April 23, 2025. The issuance, totaling NT$5,200 million, includes a 5-year NT$2,000 million Green Bond and a 5-year NT$3,200 million bond, both at fixed coupon rates. The funds raised will be allocated for green environmental expenditures and debt repayment, signaling the company’s commitment to sustainable practices and financial stability.

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: Sep 16, 2025