United Microelectronics (NYSE:UMC) reported fourth-quarter 2025 results that management said were in line with prior guidance, with sequential revenue growth supported by foreign exchange movements and continued expansion in 22- and 28-nanometer offerings. Executives also provided first-quarter 2026 guidance calling for flat wafer shipments, firm U.S. dollar ASPs, a gross margin in the high-20% range, and utilization in the mid-70% range.
Fourth-quarter financial results
Chief Financial Officer Chih-tung Liu said consolidated revenue for the fourth quarter of 2025 was TWD 61.81 billion, with gross margin of about 30.7%. Net income attributable to shareholders of the parent was TWD 10.06 billion, and earnings per ordinary share were NT$0.81. Utilization was about 78%, unchanged from the previous quarter.
Full-year 2025 performance and balance sheet items
For full-year 2025, Liu reported revenue of TWD 237.5 billion, up 2.3% year over year, with gross margin of about 29% (TWD 68.9 billion). Net income attributable to shareholders for 2025 was TWD 41.7 billion, which Liu said represented a 17.6% net income rate. Full-year EPS was NT$3.34, down from NT$3.8 in 2024.
On the balance sheet, Liu said cash exceeded TWD 110 billion at the end of 2025, and total equity was TWD 379.8 billion. He also noted that blended ASP remained at a similar level through 2025.
In geographic revenue mix, management highlighted a shift away from North America. Liu said North America represented about 21% of fourth-quarter revenue, and on a full-year basis North America declined from 25% in 2024 to 22% in 2025.
Technology mix, capacity, and capital spending
Management repeatedly emphasized 22-nanometer as a key growth driver. Liu said 22- and 28-nanometer revenue in the fourth quarter represented 36% of total revenue. President Jason Wang added that 22-nanometer revenue increased 31% quarter over quarter to a record high and accounted for more than 13% of fourth-quarter revenue.
On a full-year basis, Liu said the combined 22- and 28-nanometer share increased by 3 percentage points year over year, and 14-nanometer rose by about 2 percentage points.
Liu said capacity was flat quarter over quarter but would decline by roughly 1% due to annual maintenance. He also provided an updated 2026 CapEx plan of about $1.5 billion, slightly down from $1.6 billion in 2025.
First-quarter 2026 outlook and margin drivers
For the first quarter of 2026, Wang guided to:
- Wafer shipments: flat
- ASP (U.S. dollars): firm
- Gross margin: approximately in the high-20% range
- Capacity utilization: mid-70% range
- 2026 cash-based CapEx budget: $1.5 billion
In Q&A, Wang and Liu cited utilization, product mix, depreciation, and foreign exchange as key variables for gross margin. They said the high-20% gross margin view for the first quarter reflected higher costs, particularly higher depreciation. Liu said the company was looking for a “low teens” annual increase in full-year depreciation expense, and suggested depreciation could peak either in 2026 or 2027 at similar levels.
Market conditions, pricing, and growth initiatives
Asked about the 2026 market outlook, Wang said AI-related segments were expected to remain the primary semiconductor growth driver and that the overall semiconductor industry was projected to grow in the mid-teens in 2026. He added that the foundry market was projected to grow in the low 20% range, while UMC estimated its addressable market would grow in the low single digits and that UMC expected to outperform that average.
On pricing, Wang said UMC anticipated a more favorable ASP environment in 2026 than in 2025, citing disciplined pricing, product mix optimization, loading improvement, and reduced exposure to more commoditized segments. He also told analysts that pricing actions would be mixed across customers, with some receiving upward adjustments and others receiving a one-time downward adjustment intended to support competitiveness and market share expansion.
Discussing near-term demand, Wang said first-quarter trends were in line with normal seasonality for UMC’s addressable market and that the company had not seen significant changes due to inventory restocking. By application, he said UMC expected consumer revenue contribution to increase, driven by Wi-Fi, DTV, and set-top box, while communication and automotive were expected to decline due to softer demand for ISP and DDI products. For the full year, Wang said UMC expected 2026 to be a growth year and that the second half would be better than the first half, supported by new projects across specialty technologies (including embedded high voltage, non-volatile memory, power management IC, and RFSOI) ramping in the second half.
Wang also discussed strategic initiatives, including completion of a Phase 3 facility at Singapore Fab 12i in 2025 to support supply-chain diversification. He said UMC was expanding its U.S. footprint via partnerships, including a 12-nanometer collaboration with Intel and an MOU with Polar Semiconductor. On the Intel partnership, Wang said UMC and Intel remained on schedule to deliver a PDK and associated IP to customers in 2026, with product tape-outs expected to start in 2027. He noted target applications including digital TV, Wi-Fi connectivity, and high-speed interface products, but said the company could not comment on the business model details.
Regarding UMC’s Xiamen fab, Wang said it was an important part of the company’s geographically diverse footprint, was running at full utilization, and continued to see customer engagement.
On emerging growth areas, Wang described advanced packaging and silicon photonics as future catalysts. He said UMC was working with more than 10 advanced packaging customers and expected more than 20 new tape-outs in 2026, with 2027 anticipated to be a “significant” revenue year for advanced packaging. On silicon photonics, he said UMC’s collaboration with imec aimed to deliver an industry-standard PDK to customers in 2027, and he indicated a 12-inch PIC programmable product was expected to ramp “this year.”
In specialty technologies, Wang said specialty revenue represented about 50% of overall revenue, with high voltage about 30% of specialty revenue and the remainder a combination of non-volatile memory and BCD.
About United Microelectronics (NYSE:UMC)
United Microelectronics Corporation (UMC) is a Taiwan-based semiconductor foundry that provides wafer fabrication and related manufacturing services to a global customer base. Founded in 1980, the company operates as a pure-play foundry, producing integrated circuits for a range of customers including fabless semiconductor companies and integrated device manufacturers. UMC is publicly listed (NYSE: UMC) and focuses on high-reliability manufacturing rather than branding consumer products.
UMC’s core services encompass wafer fabrication using a portfolio of process technologies, with particular emphasis on mature and specialty nodes that support analog, power-management, radio-frequency (RF), and mixed-signal applications.
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