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UMC registers a 2.1% monthly and 16.67% annual revenue decline in November, anticipates Q4 challenges amid cautious industry production.

Taiwan
u 2303.TW Blue Chip 150 Tech 350 Semicon 75
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Leading wafer foundry, United Microelectronics disclosed a November revenue of 18.787 billion yuan, marking a 2.1% monthly decrease and a substantial 16.67% annual downturn, reaching a six-month low. The cumulative year-to-date revenue for November stands at 205.553 billion yuan, reflecting a year-on-year decrease of 20.25%, yet ranking as the second-highest within the corresponding period of previous years.

UMC’s recent projections for the fourth quarter reveal a forecasted 5% quarter-on-quarter decline in wafer shipments, while average product prices are expected to maintain stability. The capacity utilization rate is slated to decrease from 67% to a range of 61-63%, and the gross profit margin is anticipated to drop to 31-33%. Industry experts suggest that despite a short-term resurgence in demand for computers and communications, customer hesitancy to commence production amid caution may impact UMC’s Q4 operations compared to the preceding quarter.

While there are early signs of inventory correction, customers remain conservative, influencing UMC’s operations. However, the company foresees a gradual recovery in the second quarter of the following year, stabilizing in the latter half. Expectations include an increase in full-year capacity utilization rate and wafer shipments compared to the current year, aligning with a more optimistic industry outlook for the second half of the upcoming year.

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