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United Microelectronics Corp. (UMC)
NYSE:UMC
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United Micro
(NYSE:UMC)
71Outperform
Positive Factors
Innovation and technology roadmap
Continued innovation with new specialty offerings strengthens UMC’s technology roadmap.
Shipment and UTR guidance
Stronger shipment and UTR guidance were better than expected, driven by increased consumer electronics demand, likely boosted by tariff and China’s trade-in programs.
Negative Factors
Financial performance
Higher depreciation expenses are expected to increase by 27-29% in 2025, which could impact financial performance.
United Micro (UMC) vs. S&P 500 (SPY)
Market Cap
$17.13B
Dividend Yield5.16%
Average Volume (3M)14.52M
Price to Earnings (P/E)11.5
Beta (1Y)0.75
Revenue Growth1.28%
EPS Growth-25.39%
CountryUS
Employees19,833
SectorTechnology
Sector Strength45
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)0.59
Shares Outstanding2,512,143,300
10 Day Avg. Volume18,041,763
30 Day Avg. Volume14,522,767
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.51
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.30Price Target Upside-5.55% Downside
Rating ConsensusHold
Number of Analyst Covering4
United Micro Business Overview & Revenue Model
Company DescriptionUnited Microelectronics Corporation (UMC) is a global semiconductor foundry company headquartered in Hsinchu, Taiwan. It specializes in providing high-performance integrated circuit (IC) manufacturing services for various sectors, including communications, consumer electronics, computing, and more. UMC offers a comprehensive range of IC fabrication processes and technologies, serving a wide array of clients in different industries.
How the Company Makes MoneyUMC makes money primarily through its semiconductor manufacturing services, offering foundry services to design houses and electronics companies that require high-quality IC production. The company generates revenue by leveraging its technological expertise and manufacturing capacity to produce ICs based on customer specifications. UMC operates through a combination of advanced production facilities and strategic partnerships with key technology companies. Its revenue streams include wafer fabrication, technology licensing, and long-term service agreements with major clients seeking cost-effective and reliable semiconductor solutions.
United Micro Financial Statement Overview
Summary
United Micro demonstrates strong profitability and a solid balance sheet with low leverage, which are commendable strengths. However, revenue decline and negative Free Cash Flow growth are notable weaknesses that could impact future financial performance. The company should focus on revitalizing sales growth and improving cash flow to sustain its financial health.Income Statement
United Micro showcases a strong performance in its income statement with healthy profitability metrics. The TTM Gross Profit Margin stands at 32.0%, and the Net Profit Margin is 22.3%, reflecting solid cost management and profitability. However, the Revenue Growth Rate from the previous annual period shows a decline of 20.0%, indicating potential challenges in expanding sales.75
Positive
Balance Sheet
The company's balance sheet is robust with a Debt-to-Equity Ratio of 0.26, showcasing low leverage and financial stability. The Equity Ratio is 64.1%, indicating a strong capital structure. However, the Return on Equity (ROE) is 13.7%, which is moderate and suggests room for improvement in generating returns on equity.80
Positive
Cash Flow
United Micro's cash flow statement indicates some concerns. The Free Cash Flow has decreased over the last period, showing a negative Free Cash Flow Growth Rate. The Operating Cash Flow to Net Income Ratio is 1.78, suggesting efficient cash generation relative to net income, but the decline in Free Cash Flow requires attention.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 226.87B | 222.53B | 278.71B | 213.01B | 176.82B | 148.20B | Gross Profit |
| 72.60B | 77.74B | 125.76B | 72.05B | 39.00B | 21.31B | EBIT |
| 50.09B | 57.89B | 104.29B | 51.69B | 22.01B | 7.55B | EBITDA |
| 103.22B | 105.85B | 155.58B | 98.62B | 69.70B | 57.13B | Net Income Common Stockholders |
| 50.61B | 59.69B | 89.48B | 51.25B | 22.86B | 6.13B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 144.88B | 144.88B | 178.60B | 170.90B | 109.57B | 96.22B | Total Assets |
| 559.19B | 546.58B | 533.05B | 464.43B | 377.52B | 370.19B | Total Debt |
| 80.17B | 64.16B | 45.61B | 46.82B | 41.41B | 65.93B | Net Debt |
| -52.39B | -68.39B | -128.20B | -85.80B | -52.64B | -29.56B | Total Liabilities |
| 197.78B | 202.86B | 197.60B | 183.22B | 141.74B | 162.97B | Stockholders Equity |
| 359.24B | 343.38B | 335.11B | 280.98B | 235.66B | 206.80B |
| Cash Flow | Free Cash Flow | ||||
| -3.48B | -8.02B | 62.98B | 40.39B | 37.39B | 35.94B | Operating Cash Flow |
| 89.84B | 86.00B | 145.86B | 90.35B | 65.75B | 54.90B | Investing Cash Flow |
| -95.78B | -97.79B | -54.43B | -62.16B | -40.11B | -31.68B | Financing Cash Flow |
| -28.79B | -29.09B | -57.25B | 12.49B | -25.60B | -9.87B |
United Micro Technical Analysis
Neutral
6.67
Price Trends
6.29
Positive
6.63
Negative
7.48
Negative
Market Momentum
0.13
Negative
56.27
Neutral
68.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UMC, the sentiment is Neutral. The current price of 6.67 is above the 20-day moving average (MA) of 6.51, above the 50-day MA of 6.29, and below the 200-day MA of 7.48, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 56.27 is Neutral, neither overbought nor oversold. The STOCH value of 68.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UMC.
United Micro Risk Analysis
United Micro disclosed 46 risk factors in its most recent earnings report. United Micro reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
United Micro Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $171.41B | 17.23 | 41.96% | 2.16% | 12.13% | 36.17% | |
75 Outperform | $2.65T | 36.41 | 119.18% | 0.03% | 114.20% | 146.26% | |
74 Outperform | $785.82B | 25.14 | 29.96% | 1.08% | 29.98% | 35.76% | |
73 Outperform | $156.59B | 96.32 | 2.89% | ― | 13.69% | 91.75% | |
71 Outperform | $17.13B | 11.47 | 12.65% | 5.16% | 1.28% | -25.39% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
48 Neutral | $85.65B | ― | -18.31% | 2.51% | -2.08% | -1212.72% |
* Technology Sector Average
Performance Comparison
UMC
United Micro
6.62
-1.36
-17.04%
AMD
Advanced Micro Devices
100.79
-94.00
-48.26%
INTC
Intel
20.68
-22.10
-51.66%
NVDA
Nvidia
115.74
24.88
27.38%
QCOM
Qualcomm
153.10
-12.82
-7.73%
TSM
TSMC
177.17
36.60
26.04%
United Micro Earnings Call Summary
Earnings Call Date: Jan 21, 2025 | % Change Since: 6.21% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment with positive aspects such as revenue growth and advanced packaging expansion, but also highlighted challenges like declining utilization rates, nonoperating income loss, and geopolitical pressures affecting pricing. Despite these challenges, UMC maintains a strong financial position, which supports future growth initiatives.Highlights
Revenue Growth
For full-year 2024, UMC's revenue grew 4.4% year-on-year, reflecting improvement in demand across Communication, Consumer, and Computer segments.
22/28-nanometer Portfolio Growth
The 22/28-nanometer portfolio remains the largest contributor, with revenue increasing 15% in 2024.
Strong Financial Position
UMC's cash on hand is over TWD 100 billion, and total equity at the end of 2024 reached TWD 378 billion.
Advanced Packaging Expansion
UMC is broadening its advanced packaging technology offering to capture AI opportunities, developing new system architectures with multiple partners.
Lowlights
Decline in Utilization Rate
Utilization rate in Q4 2024 was 70%, down from the previous quarter's 71%.
Nonoperating Income Loss
UMC registered a TWD 1.4 billion loss of nonoperating income in Q4 2024 due to mark-to-market loss of the investment portfolio.
Geopolitical and Pricing Pressures
UMC faces ongoing pricing pressure from competitors and geopolitical dynamics, particularly with new capacity on 28-nanometer in China.
Gross Margin Impact
Q1 2025 gross margin is guided to be higher than 25%, impacted by a one-off ASP decline and increased depreciation expenses.
Company Guidance
During the UMC earnings call for the fourth quarter of 2024, several key metrics and guidance for the first quarter of 2025 were discussed. The consolidated revenue for Q4 2024 was TWD 60.4 billion with a gross margin of 30.4%, and net income attributable to shareholders was TWD 8.5 billion. For the full year 2024, revenue grew by 4.4% year-over-year to TWD 232.3 billion. The guidance for Q1 2025 includes flat wafer shipments, a mid-single-digit decrease in ASP in U.S. dollars, and a gross margin exceeding 25%. Capacity utilization is expected to be approximately 70%, and the CapEx budget for 2025 is set at USD 1.8 billion. The company highlighted the increasing demand for their 22/28-nanometer technology and advanced packaging solutions, with projections of continued growth driven by AI and semiconductor content in electronic devices.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.