United Microelectronics Caps Year with Steady Performance, Eyes Strategic Growth

United Microelectronics US9108734057

The semiconductor foundry United Microelectronics Corporation (UMC) concluded its fiscal year with resilient financial results, setting the stage for a significant capital expenditure program. As the company prepares to channel billions into expansion, questions arise about the near-term impact of these investments on its profitability metrics.

For the full 2025 fiscal year, UMC reported revenue of NT$237.5 billion, with earnings per share coming in at NT$3.34. The company closed the final quarter with a solid performance, posting a net profit of NT$10.06 billion. Fourth-quarter revenue reached NT$61.81 billion, marking a sequential increase of 4.5% and a 2.4% year-over-year gain. The gross profit margin for Q4 stood at a healthy 30.7%.

Strategic Investments and Focus Areas

Looking ahead to 2026, UMC’s management has outlined an ambitious growth strategy backed by a capital expenditure budget of USD 1.5 billion. This substantial investment will be directed primarily toward capacity expansion in Singapore, including the completion of Phase 3 at its Fab 12i facility, and the advancement of specialized process technologies.

A key partnership with Intel in the 12-nanometer segment is anticipated to help capture new market share. The company is strategically positioning itself in high-growth areas such as artificial intelligence, silicon photonics, and advanced packaging solutions tailored for the automotive and consumer electronics sectors.

Near-Term Margin Outlook

Despite the robust annual figures and long-term plans, the guidance for the first quarter of 2026 is cautious. Management anticipates wafer shipments to remain flat quarter-over-quarter, with average selling prices holding steady. This, combined with rising depreciation costs from new equipment, is expected to pressure margins.

The gross margin is projected to dip slightly into the high-20 percent range. Factory utilization is forecast to be approximately 75% for the current quarter, with the increased depreciation from capacity expansions likely to affect financial results throughout the coming year.