United Microelectronics ((UMC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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UMC’s recent earnings call painted a picture of robust revenue growth and strategic market expansion, particularly in its 22-nanometer technology and North American market share. However, this positive sentiment was somewhat dampened by challenges such as increased depreciation costs, a decline in net income, and pressure on gross margins due to unfavorable currency exchange rates.
Revenue Growth and Improved Gross Margin
UMC reported a consolidated revenue of TWD 59.13 billion for Q3 2025, marking a slight increase in gross margin to 29.8% due to enhanced capacity utilization. The company also noted a year-over-year revenue growth of 2.2% for the first three quarters.
Increased Capacity Utilization and Wafer Shipments
The capacity utilization rate climbed to 78%, with wafer shipments reaching 1 million 12-inch equivalent wafers. This growth was driven by rising demand across various market segments, showcasing UMC’s operational efficiency.
Strong Performance in 22-nanometer Technology
UMC’s 22-nanometer technology accounted for over 10% of total sales in 2025. The company anticipates more than 50 product tape-outs and continued revenue growth from this technology into 2026, highlighting its strategic importance.
Geographic Revenue Growth
Revenue from North America saw a significant increase, rising to 25% of total revenue in Q3 2025, up from 20% in the previous quarter. This growth underscores UMC’s successful expansion in the North American market.
Strategic Technology Developments
UMC announced the readiness of its 55-nanometer BCD platform, aimed at mobile, consumer, automotive, and industrial applications. This development positions UMC to capture new market opportunities.
Decline in Net Income
Despite revenue growth, UMC experienced a decline in net income for the first three quarters of 2025, with earnings per share dropping to TWD 2.54 from TWD 3.12 in the same period of 2024.
Challenges with Depreciation Costs
UMC faced a significant challenge with over a 20% increase in annual depreciation expenses, which impacted its gross margin despite favorable market conditions.
Decline in Revenue from Asia
Revenue from Asia decreased by nearly 4 percentage points, accounting for 63% of total revenue in Q3 2025. This decline highlights regional market challenges that UMC needs to address.
Gross Margin Pressure
Despite improvements, UMC’s gross margin is expected to remain in the high 20% range due to ongoing high depreciation costs and unfavorable foreign exchange impacts.
Forward-Looking Guidance
Looking ahead, UMC provided guidance for Q4 2025, anticipating flat wafer shipments compared to Q3, with a firm ASP in U.S. dollars. The gross margin is projected to remain in the high 20% range, and the capacity utilization rate is expected to be in the mid-70% range. The company’s cash-based CapEx budget for 2025 remains unchanged at USD 1.8 billion, with significant growth expected in its 22-nanometer technology platform in 2026.
In summary, UMC’s earnings call highlighted a mix of strong revenue growth and strategic advancements, tempered by challenges such as increased depreciation costs and pressure on gross margins. The company’s focus on expanding its technology platforms and market presence, particularly in North America, positions it well for future growth despite these hurdles.