PDF 原檔：報告_Daiwa_聯電2303_20261030_original.pdf
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| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
報告_Daiwa_聯電2303_20261030_001.png |
20KB | 真資料圖 | Share price performance：UMC（左軸 TWD，約 40-180）與相對 TWSE 指數（右軸 %），Oct-25 至 Oct-26；股價 4 月起急升至約 170-180 後回落，近期約 110-120；股價類圖，不嵌公司頁 |
報告_Daiwa_聯電2303_20261030_002.png |
29KB | 真資料圖 | UMC blended ASP trend（USD，1Q05-4Q28E）：自 1Q05 約 1,120 降至 2019-20 谷底約 650-670，2022-23 回升至約 1,000，其後下滑至約 850-900 並預估微升；財務圖，不嵌公司頁 |
報告_Daiwa_聯電2303_20261030_003.png |
26KB | 真資料圖 | 28/22nm 以下營收占比折線（8 吋約當，1Q14-4Q28E）：由 0% 升至 2025 年約 35-40%，預估 2028E 約 50% 以上；財務圖，不嵌公司頁 |
報告_Daiwa_聯電2303_20261030_004.png |
42KB | 真資料圖 | UMC PBR trend（1990-2027）：PBR 折線與 Mean／Mean±s 水平線，標示 2008-2020 區間約 0.6-1.1x、2026 年急升至約 5x 以上（圖上註記 Avg=?）；估值圖，不嵌公司頁 |
報告_Daiwa_聯電2303_20261030_005.png |
41KB | 真資料圖 | 4-quarter forward PER band：Share price 與 10x／15x／20x／25x／30x／35x 本益比帶，Jan-10 至 2027；股價 2026 年急升後位於約 20x-25x 帶；估值圖，不嵌公司頁 |
原始內容
原始內容
United Microelectronics (2303 TT)
Target price: TWD135.00 (from TWD145.00)
Shareprice(30Oct):TWD111.50 | Up/downside:+21.1%
Upgrading: value resurfacing
- Fine-tuning forecasts on broadly intact results and guidance
- Recent stock tumble seemingly not fundamentally justified
- Upgrading by 2 notches to Buy (1), with a lower 12M TP of TWD135
What's new: Following our results memo, we upgrade our rating on UMC by 2 notches to Buy (1) on improved risk/reward profile, despite fine-tuning our forecast. Depicted in our Asia Foundry report (A paradigm shift in specialty nodes, 9 October), UMC stands well to benefit from a paradigm shift in specialty nodes, as a result of a ripple effect from AI scaling and augmented by TSMC's fab optimisation, which should keep UMC's fabs busy and boost its pricing power. Valuation had prevented us from turning positive, but the stock has since tumbled 30% in a month, opening a window of opportunity for bargain-hunting, as the fundamentals remain structurally intact.
What's the impact: Forecast revisions. Given UMC's intact quarterly results and guidance, we only fine-tune our forecasts, trimming our 2027E EPS by 4% to reflect a slightly lower margin trajectory. That said, operating profit has turned around since 1Q26, in terms of YoY growth, accelerating to 68% in 3Q26. We forecast it to sustain at such high levels throughout 2027, thanks to its price hikes as a result of fully loaded operations from 1Q27, in terms of wafer-in, and benefiting from AI demand scaling in breadth and depth and from TSMC's fab optimisation mentioned above (Price hike to go through? Still likely, 31 July).
From volume- to value-driven. At its results call on 28 October, management expected UMC's business growth to shift from volume-driven this year to value-driven in 2027, implying its regaining of pricing power after the COVID cycle, since fab loadings are approaching full capacity on robust demand, driven by AI in connectivity, power and memory integration, benefiting its products such as silicon photonics (SiPh), thin-film lithium niobate (TFLN) modulators, power management, silicon capacitors and field-programmable gate arrays (FPGAs). It targets UMC's 2027 wafer blended ASP to rise by 10% YoY, from both improved product mix and liketo-like price hikes. We model only a 5% YoY increase, preserving upside risk to our forecasts.
What we recommend: Given our forecast revisions, we trim our 12M TP for UMC to TWD135 (previous: TWD145) on our lower ROE-adjusted PBR target of 4.0x (previous: 4.2x) 2027E BVPS, due to a slightly lower ROE trajectory. That said, we upgrade our rating by 2 notches to Buy (1) on improved risk/reward profile, as we find the recent share price tumble not fundamentally justified. Downside risks to our call would be silicon inflation and geopolitical overhangs leading to global inflation and AI capex cut.
How we differ: Our 2027-28E EPS are 6-7% below consensus, likely on our lower assumption of the blended ASP hikes.
3
2
1
Rick Hsu (886) 2 8758 6261
rick.hsu@daiwacm-cathay.com.tw
Sam Weng (886) 2 8758 6255 sam.weng@daiwacm-cathay.com.tw
Forecast revisions (%)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue change | (0.4) | (2.2) | (1.2) |
| Net profit change | - | (4.0) | 2.2 |
| Core EPS (FD) change | 0.1 | (4.0) | 2.3 |
Source: Daiwa forecasts
Share price performance
| 12-month range | 43.85-178.50 |
|---|---|
| Market cap (USDbn) | 43.01 |
| 3m avg daily turnover (USDm) | 678.14 |
| Shares outstanding (m) | 12,570 |
| Major shareholder | United Microelectronics Corp (5.8%) |
Financial summary (TWD)
| Year to 31 Dec | 26E | 27E | 28E |
|---|---|---|---|
| Revenue (m) | 280,688 | 351,023 | 388,471 |
| Operating profit (m) | 62,920 | 95,620 | 118,541 |
| Net profit (m) | 90,826 | 85,685 | 105,829 |
| Core EPS (fully-diluted) | 7.226 | 6.817 | 8.419 |
| EPS change (%) | 118.0 | (5.7) | 23.5 |
| Daiwa vs Cons. EPS (%) | (2.2) | (7.0) | (5.8) |
| PER (x) | 15.4 | 16.4 | 13.2 |
| Dividend yield (%) | 2.3 | 3.6 | 3.6 |
| DPS | 2.6 | 4.0 | 4.0 |
| PBR (x) | 3.6 | 3.3 | 2.9 |
| EV/EBITDA (x) | 10.2 | 7.6 | 6.5 |
| ROE (%) | 23.6 | 21.0 | 23.5 |
Source: FactSet, Daiwa forecasts
UMC: quarterly assumptions and P&L forecasts
| TWDm | 1Q26 | 2Q26 | 3Q26 | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Wafer shipment (000, 12" equ) | 1,021 | 1,129 | 1,212 | 1,233 | 1,233 | 1,356 | 1,438 | 1,423 | 3,872 | 4,594 | 5,450 | 5,981 |
| Capacity utilisation* | 80% | 86% | 91% | 92% | 94% | 99% | 102% | 100% | 75% | 88% | 99% | 101% |
| Blended ASP (USD) | 1,890 | 1,926 | 1,914 | 1,944 | 1,988 | 2,010 | 2,026 | 2,025 | 1,970 | 1,920 | 2,013 | 2,030 |
| Total revenue | 61,038 | 68,733 | 74,239 | 76,679 | 78,424 | 87,211 | 93,178 | 92,210 | 237,553 | 280,688 | 351,023 | 388,471 |
| Total revenue (USDm) | 1,930 | 2,174 | 2,320 | 2,396 | 2,451 | 2,725 | 2,912 | 2,882 | 7,629 | 8,820 | 10,969 | 12,140 |
| COGS | -43,219 | -46,410 | -49,035 | -50,807 | -51,343 | -54,914 | -57,514 | -57,418 | -168,647 | -189,471 | -221,189 | -232,393 |
| Gross profit | 17,818 | 22,323 | 25,205 | 25,872 | 27,081 | 32,296 | 35,664 | 34,792 | 68,906 | 91,218 | 129,834 | 156,079 |
| Opex | -6,542 | -7,373 | -6,562 | -7,821 | -7,960 | -8,503 | -8,852 | -8,898 | -24,958 | -28,298 | -34,213 | -37,537 |
| Operating profit | 11,276 | 14,950 | 18,643 | 18,051 | 19,121 | 23,793 | 26,812 | 25,894 | 43,949 | 62,920 | 95,620 | 118,541 |
| EBITDA | 27,263 | 31,188 | 35,334 | 35,924 | 36,821 | 41,993 | 45,512 | 44,989 | 103,206 | 129,710 | 169,315 | 188,233 |
| Non-op gain/loss | 5,367 | 30,236 | 1,268 | 950 | 850 | 1,320 | 2,005 | 1,912 | 5,699 | 37,822 | 6,087 | 7,445 |
| Pretax profit | 16,644 | 45,186 | 19,911 | 19,001 | 19,971 | 25,113 | 28,817 | 27,806 | 49,648 | 100,742 | 101,707 | 125,986 |
| Income taxes | -527 | -2,962 | -3,522 | -3,040 | -3,195 | -3,767 | -4,611 | -4,449 | -8,113 | -10,051 | -16,022 | -20,158 |
| Net profit | 16,171 | 42,260 | 16,434 | 15,961 | 16,776 | 21,346 | 24,206 | 23,357 | 41,716 | 90,826 | 85,685 | 105,829 |
| FD O/S (m) | 12,579 | 12,577 | 12,570 | 12,570 | 12,570 | 12,570 | 12,570 | 12,570 | 12,588 | 12,570 | 12,570 | 12,570 |
| FD EPS (TWD) | 1.29 | 3.36 | 1.31 | 1.27 | 1.33 | 1.70 | 1.93 | 1.86 | 3.31 | 7.23 | 6.82 | 8.42 |
| Margin | ||||||||||||
| Gross | 29% | 32% | 34% | 34% | 35% | 37% | 38% | 38% | 29% | 32% | 37% | 40% |
| Operating | 18% | 22% | 25% | 24% | 24% | 27% | 29% | 28% | 19% | 22% | 27% | 31% |
| EBITDA | 45% | 45% | 48% | 47% | 47% | 48% | 49% | 49% | 43% | 46% | 48% | 48% |
| Net | 26% | 61% | 22% | 21% | 21% | 24% | 26% | 25% | 18% | 32% | 24% | 27% |
| Growth (QoQ) | ||||||||||||
| Total revenue | -1% | 13% | 8% | 3% | 2% | 11% | 7% | -1% | ||||
| Gross profit | -6% | 25% | 13% | 3% | 5% | 19% | 10% | -2% | ||||
| Operating profit | -8% | 33% | 25% | -3% | 6% | 24% | 13% | -3% | ||||
| EBITDA | -2% | 14% | 13% | 2% | 2% | 14% | 8% | -1% | ||||
| Net profit | 61% | 161% | -61% | -3% | 5% | 27% | 13% | -4% | ||||
| FD EPS | 61% | 161% | -61% | -3% | 5% | 27% | 13% | -4% | ||||
| Growth (YoY) | ||||||||||||
| Total revenue | 5% | 17% | 26% | 24% | 28% | 27% | 26% | 20% | 2% | 18% | 25% | 11% |
| Gross profit | 15% | 32% | 43% | 36% | 52% | 45% | 41% | 34% | -9% | 32% | 42% | 20% |
| Operating profit | 15% | 38% | 68% | 48% | 70% | 59% | 44% | 43% | -15% | 43% | 52% | 24% |
| EBITDA | 14% | 23% | 35% | 29% | 35% | 35% | 29% | 25% | 3% | 26% | 31% | 11% |
| Net profit | 108% | 375% | 10% | 59% | 4% | -49% | 47% | 46% | -12% | 118% | -6% | 24% |
| FD EPS | 108% | 374% | 10% | 59% | 4% | -49% | 47% | 46% | -12% | 118% | -6% | 24% |
Source: Company, Daiwa estimates and forecasts
Note: * wafer shipment divided by capacity, not wafer input or output
UMC: blended ASP trend*
UMC: 28/22nm-and-below revenue contribution*
Source: Company, Daiwa estimates and forecasts
Note: * In 8' equivalent wafer
UMC: PBR trend
Source: Company, Daiwa estimates and forecasts
Note: * Including 14nmFF
UMC: 4-quarter forward PER band
Source: Company, TEJ, Daiwa forecasts
35x
Source: Company, TEJ, Daiwa forecasts
Financial summary
Key assumptions
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Capacity utilisation (%) | 104 | 99 | 68 | 69 | 75 | 88 | 99 | 101 |
| Blended ASP (USD) | 774 | 941 | 994 | 933 | 876 | 853 | 895 | 902 |
| Wafer shipment (8" equ., '000) | 9,860 | 9,946 | 7,190 | 7,754 | 8,712 | 10,337 | 12,262 | 13,457 |
Profit and loss (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Wafer Foundry Revenue | 213,011 | 278,705 | 222,533 | 232,303 | 237,553 | 280,688 | 351,023 | 388,471 |
| New Business Revenue | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Revenue | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Revenue | 213,011 | 278,705 | 222,533 | 232,303 | 237,553 | 280,688 | 351,023 | 388,471 |
| Other income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| COGS | (140,961) | (152,941) | (144,789) | (156,649) | (168,647) | (189,471) | (221,189) | (232,393) |
| SG&A | (7,429) | (8,518) | (6,569) | (8,425) | (7,233) | (9,468) | (12,493) | (13,869) |
| Other op.expenses | (12,935) | (12,954) | (13,284) | (15,616) | (17,725) | (18,830) | (21,720) | (23,669) |
| Operating profit | 51,686 | 104,293 | 57,891 | 51,613 | 43,949 | 62,920 | 95,620 | 118,541 |
| Net-interest inc./(exp.) | (1,387) | 156 | 3,283 | 1,914 | 676 | 900 | 1,684 | 2,837 |
| Assoc/forex/extraord./others | 11,504 | 1,649 | 9,739 | 2,693 | 5,023 | 36,922 | 4,403 | 4,608 |
| Pre-tax profit | 61,803 | 106,097 | 70,912 | 56,220 | 49,648 | 100,742 | 101,707 | 125,986 |
| Tax | (6,691) | (18,079) | (9,472) | (9,113) | (8,113) | (10,051) | (16,022) | (20,158) |
| Min. int./pref. div./others | 668 | (820) | (450) | 105 | 182 | 135 | 0 | 0 |
| Net profit (reported) | 55,780 | 87,198 | 60,990 | 47,211 | 41,716 | 90,826 | 85,685 | 105,829 |
| Net profit (adjusted) | 55,780 | 87,198 | 60,990 | 47,211 | 41,716 | 90,826 | 85,685 | 105,829 |
| EPS (reported)(TWD) | 4.552 | 7.086 | 4.930 | 3.796 | 3.341 | 7.226 | 6.817 | 8.419 |
| EPS (adjusted)(TWD) | 4.552 | 7.086 | 4.930 | 3.796 | 3.341 | 7.226 | 6.817 | 8.419 |
| EPS (adjusted fully-diluted)(TWD) | 4.468 | 6.973 | 4.868 | 3.759 | 3.314 | 7.226 | 6.817 | 8.419 |
| DPS (TWD) | 1.622 | 3.043 | 3.639 | 3.022 | 2.866 | 2.604 | 4.006 | 4.006 |
| EBIT | 51,686 | 104,293 | 57,891 | 51,613 | 43,949 | 62,920 | 95,620 | 118,541 |
| EBITDA | 98,762 | 148,462 | 98,374 | 99,780 | 103,206 | 129,710 | 169,315 | 188,233 |
Cash flow (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Profit before tax | 61,803 | 106,097 | 70,912 | 56,220 | 49,648 | 100,742 | 101,707 | 125,986 |
| Depreciation and amortisation | 47,075 | 44,169 | 40,484 | 48,168 | 59,257 | 66,790 | 73,695 | 69,692 |
| Tax paid | (6,691) | (18,079) | (9,472) | (9,113) | (8,113) | (10,051) | (16,022) | (20,158) |
| Change in working capital | (10,151) | (8,262) | 916 | (2,889) | 1,617 | (12,100) | (7,000) | (4,000) |
| Other operational CF items | (1,685) | 21,935 | (16,840) | 1,488 | (2,545) | (28,689) | (3,803) | (4,008) |
| Cash flow from operations | 90,352 | 145,861 | 86,000 | 93,872 | 99,864 | 116,691 | 148,577 | 167,512 |
| Capex | (48,035) | (80,128) | (91,474) | (88,545) | (47,744) | (63,646) | (51,200) | (52,801) |
| Net (acquisitions)/disposals | (14,290) | 28,229 | (4,678) | 2,625 | (7,670) | 8,411 | 0 | 0 |
| Other investing CF items | 162 | (2,528) | (1,635) | (21) | 2,259 | 0 | 0 | 0 |
| Cash flow from investing | (62,163) | (54,427) | (97,787) | (85,941) | (53,154) | (55,235) | (51,200) | (52,801) |
| Change in debt | 18,818 | (34,087) | 27,377 | (337) | (1,812) | (4,188) | (18,843) | (19,757) |
| Net share issues/(repurchases) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends paid | (19,871) | (37,445) | (45,015) | (37,586) | (35,784) | (32,729) | (50,353) | (50,353) |
| Other financing CF items | 11,439 | 21,296 | (11,840) | 2,438 | (3,454) | 0 | 0 | 0 |
| Cash flow from financing | 10,386 | (50,237) | (29,478) | (35,484) | (41,050) | (36,917) | (69,196) | (70,110) |
| Forex effect/others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in cash | 38,574 | 41,197 | (41,265) | (27,553) | 5,660 | 24,539 | 28,181 | 44,601 |
| Free cash flow | 42,317 | 65,732 | (5,474) | 5,327 | 52,120 | 53,046 | 97,377 | 114,711 |
Source: FactSet, Daiwa forecasts
Financial summary continued …
Balance sheet (TWDm)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Cash & short-term investment | 171,224 | 178,973 | 145,621 | 115,865 | 129,071 | 145,199 | 173,380 | 217,982 |
| Inventory | 23,011 | 31,070 | 35,713 | 35,782 | 37,228 | 38,228 | 41,728 | 41,228 |
| Accounts receivable | 35,190 | 36,975 | 29,586 | 33,343 | 31,274 | 42,274 | 49,274 | 52,774 |
| Other current assets | 3,848 | 5,353 | 5,878 | 4,688 | 7,211 | 5,000 | 5,500 | 5,500 |
| Total current assets | 233,273 | 252,371 | 216,797 | 189,678 | 204,783 | 230,701 | 269,882 | 317,483 |
| Fixed assets | 129,942 | 170,982 | 237,377 | 277,344 | 271,395 | 247,286 | 231,136 | 220,389 |
| Goodwill & intangibles | 28,665 | 44,852 | 30,758 | 30,691 | 27,445 | 24,500 | 27,400 | 27,300 |
| Other non-current assets | 72,547 | 64,847 | 74,255 | 72,487 | 75,373 | 104,198 | 108,000 | 112,008 |
| Total assets | 464,427 | 533,052 | 559,187 | 570,201 | 578,996 | 606,685 | 636,419 | 677,181 |
| Short-term debt | 39,256 | 7,587 | 29,537 | 19,510 | 27,597 | 19,751 | 20,666 | 15,726 |
| Accounts payable | 8,364 | 8,982 | 7,526 | 7,633 | 9,170 | 9,070 | 12,570 | 11,570 |
| Other current liabilities | 57,833 | 91,996 | 61,952 | 48,117 | 50,832 | 73,608 | 81,819 | 91,898 |
| Total current liabilities | 105,454 | 108,565 | 99,015 | 75,260 | 87,598 | 102,429 | 115,054 | 119,194 |
| Long-term debt | 39,830 | 39,877 | 45,236 | 55,533 | 45,372 | 49,029 | 29,272 | 14,454 |
| Other non-current liabilities | 37,941 | 49,159 | 55,358 | 61,222 | 66,170 | 66,000 | 66,500 | 66,000 |
| Total liabilities | 183,224 | 197,601 | 199,608 | 192,016 | 199,141 | 217,458 | 210,826 | 199,648 |
| Share capital | 124,832 | 125,047 | 125,298 | 125,607 | 125,882 | 125,882 | 125,882 | 125,882 |
| Reserves/R.E./others | 156,147 | 210,060 | 233,939 | 252,321 | 253,887 | 263,158 | 299,424 | 351,264 |
| Shareholders' equity | 280,980 | 335,107 | 359,238 | 377,928 | 379,768 | 389,039 | 425,305 | 477,146 |
| Minority interests | 223 | 344 | 341 | 257 | 87 | 187 | 287 | 387 |
| Total equity & liabilities | 464,427 | 533,052 | 559,187 | 570,201 | 578,996 | 606,685 | 636,419 | 677,181 |
| EV | 1,309,640 | 1,270,390 | 1,331,047 | 1,360,991 | 1,345,540 | 1,325,324 | 1,278,399 | 1,214,141 |
| Net debt/(cash) | (92,138) | (131,509) | (70,849) | (40,821) | (56,102) | (76,418) | (123,443) | (187,801) |
| BVPS (TWD) | 22.508 | 26.798 | 28.671 | 30.090 | 30.169 | 30.950 | 33.835 | 37.959 |
Key ratios (%)
| Year to 31 Dec | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|
| Sales (YoY) | 20.5 | 30.8 | (20.2) | 4.4 | 2.3 | 18.2 | 25.1 | 10.7 |
| EBITDA (YoY) | 39.3 | 50.3 | (33.7) | 1.4 | 3.4 | 25.7 | 30.5 | 11.2 |
| Operating profit (YoY) | 134.9 | 101.8 | (44.5) | (10.8) | (14.8) | 43.2 | 52.0 | 24.0 |
| Net profit (YoY) | 91.1 | 56.3 | (30.1) | (22.6) | (11.6) | 117.7 | (5.7) | 23.5 |
| Core EPS (fully-diluted) (YoY) | 93.7 | 56.0 | (30.2) | (22.8) | (11.8) | 118.0 | (5.7) | 23.5 |
| Gross-profit margin | 33.8 | 45.1 | 34.9 | 32.6 | 29.0 | 32.5 | 37.0 | 40.2 |
| EBITDA margin | 46.4 | 53.3 | 44.2 | 43.0 | 43.4 | 46.2 | 48.2 | 48.5 |
| Operating-profit margin | 24.3 | 37.4 | 26.0 | 22.2 | 18.5 | 22.4 | 27.2 | 30.5 |
| Net profit margin | 26.2 | 31.3 | 27.4 | 20.3 | 17.6 | 32.4 | 24.4 | 27.2 |
| ROAE | 21.6 | 28.3 | 17.6 | 12.8 | 11.0 | 23.6 | 21.0 | 23.5 |
| ROAA | 13.3 | 17.5 | 11.2 | 8.4 | 7.3 | 15.3 | 13.8 | 16.1 |
| ROCE | 15.7 | 28.1 | 14.2 | 11.6 | 9.7 | 13.8 | 20.5 | 24.1 |
| ROIC | 23.5 | 44.0 | 20.4 | 13.8 | 11.1 | 17.8 | 26.2 | 33.6 |
| Net debt to equity | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
| Effective tax rate | 10.8 | 17.0 | 13.4 | 16.2 | 16.3 | 10.0 | 15.8 | 16.0 |
| Accounts receivable (days) | 53.5 | 47.3 | 54.6 | 49.4 | 49.6 | 47.8 | 47.6 | 47.9 |
| Current ratio (x) | 2.2 | 2.3 | 2.2 | 2.5 | 2.3 | 2.3 | 2.3 | 2.7 |
| Net interest cover (x) | 37.3 | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
| Net dividend payout | 68.1 | 67.1 | 51.6 | 61.6 | 75.8 | 78.5 | 55.4 | 58.7 |
| Free cash flow yield | 3.0 | 4.7 | n.a. | 0.4 | 3.7 | 3.8 | 6.9 | 8.2 |
Source: FactSet, Daiwa forecasts
Company profile
Incorporated in Taiwan, United Microelectronics Corp (UMC) is one of the leading semiconductor foundries in the world and second largest in Taiwan. UMC offers a series of foundry services from photo-mask, wafer fabrication to wafer probe & test. Its wafer fabs are spread over Taiwan, China and Singapore, with technology offerings ranging from 0.25u and above, 0.18/0.15u, 0.13u, 90nm, 65nm, 45/40nm, 28/22nm to 14nm FF.
ESG analysis
ESG risks
| Risks | Management | Analystcomments |
|---|---|---|
| G Executive/board quality | 1 relative to | UMC's Board of Directors consists of nine members whose expertise covers industry, academia, finance, accounting, and management. Among these directors, six are independent directors, representing 67% of total directors in 2024. The percentage of independent directors is high the regulatory requirement of at least 20% or at least 2 independent directors. Although some of UMC's executive management are also directors, UMC's Chairman and President are not the same person. Considering this and its relative-high percentage of independent directors, we believe the board can perform its functionalities well |
| Capital management | 2 | It kept its dividend payout ratios above 50% in 2017-24, which is at a healthy, sustainable level. Overall, we see the balance between investment and dividend as appropriate. |
| Related party & transaction | 1 | Sales to related parties were around 1-2% of its total revenue each year. The percentage is insignificant and thus we see limited risk for UMC. |
| S Supplychain management | 2 | UMC has constructed an evaluation framework for reviewing the sustainable development of its supply chains based on UMC's GG-026-004-C sustainable supply-chain management review guidelines to ensure its suppliers fulfil environmental protection, social responsibility, labour and human rights, safety & health and sustainable development guidelines. We believe these efforts could reduce its supply-chain risk. |
| E Water&wastewater management | 2 | UMC developed its 'Water Management Policy and Commitment' in 2015 to promote more effective utilisation of water resources. In line with this policy, UMC continues to enhance recycling through increased use of reclaimed and desalinated water, ongoing wastewater treatment R&D, and optimised discharge management. In 2024, the company achieved a 30.3% reduction in water withdrawal per unit product, surpassing its 14% goal and meeting its 2030 target ahead of schedule, which demonstrates UMC's strong commitment to water conservation. |
| E Waste & hazardous materials management | 2 | To achieve the goal of zero pollution, UMC has established a comprehensive new material evaluation process to effectively screen and control new materials introduced into the development of new processes. Through this effort, it can avoid or reduce the use of raw materials and the associated environmental impact. UMC was the first semiconductor manufacturer company in the world to obtain QC-080000 IECQ Hazardous Substance Process Management (HSPM) certification for all its fabs by leading global semiconductor manufacturers in completing the third-party verification and audit of its HSPM system in 2006. |
| E GHGemissions | 2 | UMC was the first semiconductor company in Taiwan to pass integrated environmental protection, safety and health management system certifications in 2001. UMC has established the UMC Low Carbon Commitment as a guide for future carbon reduction projects. Its GHG emission reduction goals include: 1) to reduce fluorinated greenhouse gas emissions intensity by 65% over 2013-25 vs. 2010, and 2) to reduce electricity consumption intensity by 15% in 10 years over 2016-25 vs. 2015. |
Note: Management score represents a company's ability to manage/benefit from certain ESG topics. The scores range from 1 to 3, with 1 being the strongest.
Update Date: 30 Oct 2026
Source: Daiwa, Company