UMC downgraded to Neutral at JPMorgan on margin pressures

JPMorgan downgraded UMC (UMC) to Neutral from Overweight with a price target of NT$44, down from NT$62. The cyclical recovery in semis is getting pushed out, leaving utilizations in the 65%-70% range, at the same time that pricing pressure is increasing, the analyst tells investors. With no imminent recovery in utilizations in the next two quarters, the firm believes consensus EPS revisions are likely to still move down over this period, adding that it believes UMC may not be able to maintain low- to mid-30% gross margins in 2026.