United Microelectronics Corp, Taiwan’s second-largest contract chipmaker, cautioned that the strengthening New Taiwan dollar will directly impact profitability in the second half as every 1 percent the NT dollar gains against the US dollar reduces gross margin by 0.4 percentage points.
CFO Liu Qidong told shareholders Wednesday that the negative impact will be direct and evident on second-half results, with the NT dollar appreciating from historical levels of NT$32.5-33 per US dollar to around NT$30 currently. The company’s entire revenue base is denominated in US dollars, amplifying the currency headwind.
UMC executives emphasized their Intel partnership remains critical, describing it as a project that “must succeed”. The collaboration focuses on 12-nanometer process platform development at Intel’s Arizona facilities, with production scheduled for 2027. The foundry is positioning the alliance as essential for accessing US customers, where revenue currently represents less than 30% of total sales.
The company declined Middle Eastern expansion opportunities, viewing them as purely capacity-driven ventures. Instead, UMC prioritizes Singapore for future growth due to its geopolitical neutrality. First-quarter revenue reached NT$57.86 billion ($1.85 billion), with gross margins compressed to 26.7% from 30.4% in the previous quarter.
