United Microelectronics Corp (UMC, 聯電), the world’s No.4 foundry service provider, saw its stock price rally about 7 percent yesterday, boosted by stronger-than-expected quarterly earnings last quarter and robust business outlook.
The stock price of UMC yesterday jumped 6.94 percent to close at NT$53.9, hitting the highest level in about two weeks. The stock out-performed the TAIEX, which gained 1.99 percent yesterday. UMC was the top choice of foreign investors, who registered a net buying of 93.24 million shares yesterday.
UMC’s net profits surged 31.8 percent sequentially to NT$13.79 billion last quarter, compared with NT$10.46 billion in the first quarter, the chipmaker told a virtual investor conference on Wednesday. Earnings per share rose to NT$1.11 from NT$0.84, it said.
Photo: Ann Wang, Reuters
Gross margin improved to 35.2 percent last quarter, beating its earlier estimate of 30 percent and up from 30.9 percent in the first quarter, thanks to foreign exchange gains, it said.
For this quarter, the chipmaker expects “to see a mild pickup in communications, consumer and computing segments,” UMC copresident Jason Wang (王石) said.
The chipmaker’s 22-nanometer and 28-nanometer business remains a “promising growth driver” with a number of new chips being launched in the second half of this year for applications including display drivers, connectivity and networking, Wang said.
“However, we have not seen signs of a strong rebound yet as customers remain prudent in managing their inventories,” he said.
The automotive segment remained soft this quarter and might remain so in the next quarter, due to inventory corrections, he said, adding that the segment is expected to return to normalcy from the first quarter of next year when industry inventory becomes healthier.
Wafer shipments are expected to grow by 5 percent this quarter, accelerating from a 2.6 percent increase last quarter, Wang said.
Average selling prices would remain firm, he added.
Gross margin is likely to hover at about 35 percent, dampened by higher utilities and equipment depreciation costs, the chipmaker said.
Factory utilization rate is to rise to about 70 percent this quarter from 68 percent in the prior quarter, Wang said.
UMC has doubled its silicon interposer capacity to 6,000 units this year to cope with customer demand, Wang said.
Silicon interposers are used in advanced packaging technology for artificial intelligence (AI) chips.
UMC is considered one of the potential suppliers of advanced packaging solutions as AI chip designers are seeking to ease tight supply from Taiwan Semiconductor Manufacturing Co’s (台積電) chip-on-wafer-on-substrate solution.
UMC said it is on track to ramp up chip production at an advanced fab in Singapore, which is scheduled to enter production in January 2026, before reaching high-volume production in the second half of 2026.
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