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UMC, Taiwan’s 2nd biggest foundry, saw August revenue rise 30.7% year-on-year to NT$25.05 billion, nearly a 47-month high, media report, adding executives cited strong demand for power management chips (PMICs), sensors and microcontrollers were expected to lift 3rd quarter revenue 7%-9% vs the 2nd quarter. $United Microelectronics(UMC.US) #semiconductors
Source: Dan Nystedt
Taiwan’s July export orders rose 61.9% year-on-year to a fresh record high US$97.94 billion and beating the expected 52.7% increase, media report. The US led all others with orders up 88.9% to $40.79B, the fastest pace of growth ever. Orders for IT/communications products, including servers & networking gear, rose 89.5% to $33.27B on strong AI and cloud service demand, while Electronics Products, including semiconductors and chip manufacturing services, rose 71.7% to $41.32 billion. In August, officials see export orders nearing $100B, up 61.4% - 64.8%. $Taiwan Semiconductor(TSM.US) $United Microelectronics(UMC.US) $Advanced Semiconductor Engineering(ASX.US) #Foxconn #Quanta #Wistron
Source: Dan Nystedt
AI is driving strong demand for mature process chip manufacturing, so more price hikes are on the way, media report. Last week, China’s top chip foundry SMIC said it hiked 3rd quarter prices on key technologies. Taiwan media say 15%-20% price increases this year are just the beginning – more are in store for 2027. Taiwan’s UMC, Vanguard International (VIS) and Powerchip all face upside next year as utilization rates continue to rise and AI-related demand remains strong. $United Microelectronics(UMC.US) $GlobalFoundries(GFS.US) $SkyWater Tech(SKYT.US) #semiconductors
Source: Dan Nystedt
Prices for the production of older chips (mature processes) will rise even higher next year than this amid strong AI-related demand, media report, citing Taiwan chip foundries. Vanguard (VIS) said 2027 prices will outpace this year due to AI, and UMC and Powerchip (PSMC) both said they too would continue raising prices. VIS Chairman Leuh Fang said AI is driving strong demand for power management chips (PMICs) and discretes, and the shortage will run into 2027. $United Microelectronics(UMC.US) #VIS #PSMC #semiconductors
Source: Dan Nystedt
UMC, Taiwan’s 2nd biggest chip foundry, has raised its capex to US$2 billion from $1.5 billion as it expands production in Singapore and Tainan, south Taiwan, media report. UMC will expand cleanroom capacity of its Phase 4 facility in Singapore and build a new fab in Tainan. Construction of the new fab is expected to take 20-months. UMC also said it plans to spend at least $5 billion over 3-years, including the $2B this year. $United Microelectronics(UMC.US) $Applied Materials(AMAT.US) $ASML(ASML.US) $Lam Research(LRCX.US) $KLA(KLAC.US) #semiconductors
Source: Dan Nystedt
UMC 2Q26; Mature node foundry cyclical recovery; utilization inflection
- Revenue up 12.7% q/q and up +8.4% y/y to $1.93B ; 9th straight quarter of y/y growth- Wafer shipments: 1.129M (+2% q/q) - Wafer ASP: $1,831 (+2% q/q) - $2B capex in CY26 (up $500M vs prior expectation) - Utilization inflects: 85% in 1Q26; 90%+ in 3Q- 2H>1H in revenue - SiPho/Intel 12nm/advanced packaging new opportunitiesSource: Sravan Kundojjala
BofA: United Microelectronics
Rating & Price Objective Changes> Price Objective (PO): Raised from NT$63 to NT$120 (and ADR PO raised from US$9.96 to US$18.97), based on a 17x target 2027E P/E multiple (up from 15x, sitting in the upper half of its historical 2x–25x range). Earnings & Financial Forecasts> EPS Estimates: Adjusted to NT$5.11 for 2026E, NT$7.09 for 2027E, and NT$9.60 for 2028E, driven by improving capacity utilization and wafer pricing. > Revenue & Margins: Gross margins are projected to lift to 31.9% in 2026 and 36.9% in 2027 (based on 85% and 90% utilization rates, respectively), though analysts note these sit below overly aggressive market expectations of 40–45% GMs at full capacity. Core Investment Thesis & Skepticism> Overhyped Thematic Optimism: While UMC's foundational mature-node business is recovering, BofA believes market expectations are overly inflated regarding:1. Silicon Photonics: Projected to represent only a small fraction (3% in '27 and 6% in '28) of UMC's total sales. Specialty Memory Production: Viewed merely as a cyclical fab filler. 2. Intel Collaboration (12nm): Limited customer traction is anticipated. 3. Traditional Tech Exposure: Over 80% of UMC's sales remain tied to traditional tech products, presenting downside risks if inventory builds moderate and customer pushback on pricing intensifies. Industry & Mature Node Fundamentals> Supply & Demand Dynamics: Mature 12-inch industry utilization (ex-China) is projected to improve from the low-80% range in 2026 to 85–90% in 2027. 8-inch node fundamentals look even more encouraging, moving from high-80% utilization in 2026 to 90–95% in 2027. > Capacity Adjustments: Capacity output is influenced by decoupling trends, TSMC retiring older 6", 8", and mature 12" equipment (-130k WPM through 2025–2027), and Samsung cutting back 8" and selective mature 12" operations. Recent Performance & Near-Term Outlook> 2Q26 Tracking Stronger: Sales grew 13% QoQ, aligning with resilient consumer demand reported by major fabless players. > Caution Ahead: While 3Q26 could see resilient early builds (+10%) as customers try to get ahead of cost hikes, analysts advise caution regarding year-end inventory adjustments and pricing pushback.$United Microelectronics(UMC.US)Taiwan’s semiconductor industry will account for 24.34% of Taiwan’s total power consumption in 2030, up from 17.71% this year, media report, citing state-run Taipower. That means 80 billion kWh by 2030, from 52 billion kWh this year. By 2035, the semiconductor industry’s power use will hit 110 billion kWh, or 30.38% of Taiwan’s electricity. TSMC, the biggest chip maker in Taiwan, operates 19 advanced fabs and packaging plants in Taiwan now, with 13 more under construction across Taiwan. $Taiwan Semiconductor(TSM.US) $United Microelectronics(UMC.US) $Micron Tech(MU.US) $Advanced Semiconductor Engineering(ASX.US) #semiconductors
Source: Dan Nystedt
UMC, Taiwan’s 2nd biggest chip foundry, is looking to expand a fab in south Taiwan due to an overflow of advanced packaging and specialty AI-related orders (silicon interposers, DTC) from Qualcomm, Intel and SanDisk, media report, noting new plans for UMC’s Fab 12A P7 near Tainan, Taiwan, are under evaluation. Orders for power management chips (PMICs) for AI products are also booming.
UMC is working with Qualcomm on silicon interposers, DTC (deep trench capacitors), and wafer-to wafer hybrid bonding, while Intel and UMC have partnered on 12nm FinFET, and the UMC-SanDisk cooperation is for memory chip stacking. The story cites unnamed industry sources. $United Microelectronics(UMC.US) $Qualcomm(QCOM.US) $Sandisk(SNDK.US) $Intel(INTC.US) #semiconductorsSource: Dan Nystedt
TSMC and other high energy users may soon see costs rise: Taiwan lawmakers will on Wednesday (7/22) review a proposal to require major electricity consumers (TSMC is the biggest) to install their own power supply for 5MW or more power contracts, media report, noting around 400 companies in semiconductors, AI data centers, optoelectronics, and more will be affected. The idea is to avoid straining Taiwan’s power grid. $Taiwan Semiconductor(TSM.US) $United Microelectronics(UMC.US) $Advanced Semiconductor Engineering(ASX.US) $Bloom Energy(BE.US) $GE Aerospace(GE.US) #semiconductors
Source: Dan Nystedt
