UMC downgraded to Neutral at Goldman amid slower than expected recovery

As previously reported, Goldman Sachs analyst Bruce Lu downgraded UMC (UMC) to Neutral from Buy with a price target of $7.40, down from $9.70. Given the intensifying competition from companies in mainland China, as well as the weaker than expected end demand recovery, the firm now sees incremental downside towards its overall pricing outlook into 2025 and beyond, the analyst tells investors. The firm now models UMC’s gross margin to decline to 31.0% in 2025 from 33.5%.