Navigating Market Dynamics: UMC's Steady Progress Amidst Evolving Semiconductor Landscape
Robust Third-Quarter Performance Surpasses Expectations
Taiwan-based United Microelectronics Corporation (UMC), a leading global semiconductor manufacturer, announced its fiscal third-quarter outcomes on Wednesday. The company's revenue reached $1.94 billion (59.13 billion New Taiwanese dollars), a modest 2.2% reduction from the previous year but an improvement over the analyst consensus of $1.92 billion. On a quarter-over-quarter basis, revenue saw a slight increase of 0.6%. Earnings per American Depositary Share (ADS) were reported at 19.7 cents, also surpassing the analyst estimate of 12 cents.
Advanced Technology Nodes Drive Wafer Production
The company showcased strong advancements in its sophisticated process technologies. Its 22nm and 28nm technologies collectively accounted for 35% of wafer revenue, maintaining stability compared to the previous year, though slightly down from 40% in the preceding quarter. Revenue generated from 40nm technology increased from 13% last year to 17%, showing an uptick from 15% in the second quarter of 2025. Furthermore, capacity utilization saw an improvement, rising to 78% from 71% a year ago and 76% in the prior quarter. However, the gross margin experienced a contraction, decreasing to 29.8% from 33.8% in the corresponding period of the previous year. Capital expenditures for the quarter amounted to $399 million.
Leadership's Perspective on Market Recovery and Future Growth
Jason Wang, UMC's co-president, observed a surge in demand across most market segments during the third quarter, leading to a 3.4% rise in wafer shipments and pushing utilization rates to 78%. He attributed this growth to increased replenishment orders stemming from stronger smartphone and notebook sales. Wang highlighted the competitive advantage of UMC's 22nm technology, which contributed over 10% to the total revenue. The company anticipates more than 50 product tape-outs on its 22nm platforms in 2025, with further contributions expected in 2026. UMC also introduced its 55nm BCD platform, designed to meet the stringent demands of automotive and industrial applications, in addition to mobile and consumer markets. Wang expects wafer shipments in the fourth quarter to remain consistent with third-quarter levels, positioning UMC for low-teens shipment growth by the end of 2025.
Forward-Looking Projections and Investment Strategies
For the upcoming fourth quarter, wafer shipments are projected to hold steady compared to third-quarter 2025 figures, with average selling prices in U.S. dollars anticipated to remain firm. The gross profit margin is expected to stay within the high-20% range, reflecting stable pricing and operational efficiencies. Capacity utilization is forecasted to be in the mid-70% range, aligning with current production patterns. The company's capital expenditure for 2025 remains on target at $1.8 billion, underscoring its ongoing commitment to investing in advanced process technologies and expanding capacity.