United Microelectronics Corporation (UMC) expects a moderate recovery in end-market demand, projecting a 4% to 6% increase in wafer shipments for the third quarter, according to co-general manager Jason Wang. Despite facing profit pressures, UMC anticipates maintaining a gross profit margin between 34% and 36%, with an average selling price (ASP) holding steady. The company’s capacity utilization rate is also set to rise from 68% to approximately 70%.
Mr. Wang disclosed these insights during an online briefing on July 31. He highlighted that demand in the communications and computer sectors is improving, helping to drive up capacity utilization. This positive outlook led to a slight uptick in UMC’s stock price, which closed at 50.4 yuan, while its American Depositary Receipts (ADRs) saw a 7% increase in early trading.
Despite the optimistic shipment forecast, UMC anticipates some profit pressure in the latter half of the year. Factors such as the expansion of production capacity at the Tainan 12A P6 and Singapore 12i P3 factories have led to increased depreciation and electricity costs. Nonetheless, UMC remains confident in its ability to navigate these challenges and maintain steady profitability.
UMC’s long-term pricing strategy focuses on competitive pricing to help customers gain market share. The company is particularly optimistic about the 22/28nm process, which is expected to drive revenue growth with applications in display driver ICs, communications, and networking.
Capital expenditure for the year remains at US$3.3 billion, with the new 12i P3 factory in Singapore set for trial production in January 2026 and mass production in the latter half of the same year. Additionally, UMC is expanding its advanced packaging solutions, including 3D IC, WoW Hybrid bonding, and silicon interposer technologies, to meet rising customer demand.
Mr. Wang also touched on the future of AI, predicting that applications like Industry 4.0, ADAS, and robotics will drive significant growth. UMC is optimistic about long-term demand in the semiconductor industry, particularly as AI progresses from cloud-based to edge computing applications.
In summary, UMC is poised for moderate growth in wafer shipments amid improving market conditions, despite ongoing cost pressures. The company’s strategic investments and focus on advanced technologies position it well for sustained profitability and market expansion.
