報告_Citi_聯電2303_20260729

PDF 原檔：報告_Citi_聯電2303_20260729_original.pdf

圖片清單（已驗證 2026-07-31）

原始內容

(RIC: 2303.1W, BB: 2303 11)

TWD

175

150

125

100

75

50

25

Prepared for Kevin Lu

29 Jul 2026 12:01:03 ET │ 18 pages

Sep

Dec

Mar

Jun

UMC (2303.TW)

Stronger near-term fundamentals with AI upside in the longer term

CITI'S TAKE

UMC delivered a solid 2Q26, with revenue rising 12.6% QoQ to NT$68.7bn, GM to 32.5%, and UTR up to 85% from 79% in 1Q26. Management guided 3Q26 wafer shipments to grow by high-single-digit %, UTR to reach low90%, and GM improving to mid-30% range, supported by PMIC, sensors and MCUs. More importantly, UMC is repositioning its portfolio toward AIrelated specialty technologies, including silicon photonics, advanced packaging, connectivity and power management. AI revenue is projected to approach US$300mn in 2026 and exceed US$1bn within three years. While consumer demand remains mixed, improving UTR and more constructive pricing trend should support earnings growth, partly offset by higher depreciation from new capacity investments.

Capex shifts toward silicon photonics and advanced packaging -UMC raised its 2026 capex budget from US$1.5bn to US$2bn and approved roughly US$5bn of investment over the next 2-3 years. The new investment targets AI-related specialty opportunities. Singapore expansion will support silicon photonics, powermanagement processes and related specialty technologies, while the new Tainan facility will provide infrastructure for advanced packaging. Unlike a standardized platform such as CoWoS, UMC's strategy is to offer flexible packaging capabilities. This may include interposers, hybrid bonding, chiplet integration and different stacking configurations, including wafer stacking and customized memory integration. While the depreciation cost is expected to rise by a low-teens percentage annually over at least the next two years, the management sees EBITDA on an upward trend due to better mix and robust demand outlook.

AI growth led by silicon photonics and advanced packaging -UMC expects AIrelated revenue to reach US$300mn in 2026 and exceed US$1bn within 3 years, driven by connectivity, silicon photonics, power management and advanced packaging. Silicon photonics should be one of the fastest-growing areas. UMC completed its first production run of a 12-inch silicon photonics IC in 2Q26 and plans to open the platform for broader customer adoption in 2027. UMC is also developing TFLN modulators for next-generation high-speed optical links. In advanced packaging, >10 customer projects are currently active, with several products to tape out in 2026-27 and more contribution from 2028 onward.

Maintain Buy; raise TP to NT$125 -We lift our 2026/27/28 earnings by 59%/44%/52% on better UTR and margin trend. Our TP is at NT$125 (15x 2027 EPS).

Earnings Summary

Source: Powered by dataCentral

See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations.

Price Performance (RIC: 2303.TW, BB: 2303 TT)

Laura (Chia Yi) Chen AC

+886-2-8726-9090 laura.cy.chen@citi.com

Jack Chen +886-2-8726-9091 jack1.chen@citi.com

Nicholas Lai +886-2-8726-9093 nicholas.lai@citi.com

Prepared for Kevin Lu

Figure 1. UMe - 2220 Results Comparison

1Q26

Actual

61,038

17,818

29.2%

11,276

18.5%

16,171

1.29

(NT$mn)

Revenue

Gross profit

Gross margin

Op. profit

OP margin

Net income

EPS (NTS)

68,733

22,323

32.5%

14,950

21.8%

42,260

3.38

Q/Q

13%

25%

*3.3 ppt

33%

*3.3 ppt

161%

161%

C 2026 Citigroun Inc. No redistribution without Citigroun's written nermission..

Prepared for Kevin Lu

2026

Citi

67,299

20,551

30.5%

Diff.

2%

9%

+1.9 ppt

2026

Cons

67,524

20,708

30.7%

Diff.

3Q26

Guidance

Volume •HSD QoQ;

ASP remains firm

2%

8%

+1.8 ppt

10%

Demand, Pricing and Margin Outlook Turn More Constructive -UMC remains constructive on demand, although the recovery is not yet broad based. AI infrastructure remains the key growth engine, supporting demand for compute, memory, connectivity, optical components and power management. Automotive and industrial demand is relatively stable, while smartphones, PCs and other consumer electronics remain mixed. Nevertheless, UMC expects full-year wafer shipments to increase through stronger 22/28nm demand, recovering eight-inch utilization across both AI and non-AI applications. Management also sees pricing conditions becoming more constructive as utilization improves and specialty technologies account for a larger revenue mix. In our view, higher utilization and better mix should support near-term margin expansion, although rising depreciation will constrain the longer-term gross-margin upside.

Positive 2Q26 Results and outlook

UMC delivered a strong 2Q26, supported by improving utilization and broad-based shipment growth. Revenue increased 12.6% quarter on quarter to NT$68.7 billion, while gross margin expanded to 32.5% (vs 29.2% in 1Q26 and consensus of 30.7%). Wafer shipments rose 7.6% sequentially, and utilization improved to 85% in 2Q26 from 79% in 1Q26.

For 3Q26, management expects wafer shipments to rise by a high-single-digit percentage, driven by strong demand for power-management ICs, sensors and microcontrollers. ASP in US-dollar terms should remain broadly stable, utilization is expected to move into the low-90% range, and gross margin is guided to the mid-30% range. Twelve-inch utilization is expected to remain above the corporate average, while eight-inch loading should recover toward approximately 85%.

Figure 1. UMC - 2Q26 Results Comparison

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Citi Research, Bloomberg

GM at mid-30%

Citi

Prior Est.

71,264

22,833

32.0%

Cons

73,222

24,295

33.2%

Figure 4. UMe — sales by application

Figure 2. UMe — sales by node

NTSmn

NT Smn

80,000

80,000

70,000

70,000

60,000

60,000

50,000

50,000

40,000

40,000

30,000

30,000

20,000

20,000

10,000

10,000

• ≤14nm

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

23% 21%

, 18% 17% 16%

9%

9%

10% 12% 9%

49

69

10%

9%

8%

• 15% 14% 19%

39

9%

18% 23%

2%

13%

19%

3%0

46%

9%

39

16%

10

15%

12%

13%

18%

13%

1496

47%

15%

15%

13%

4%

48

2%2

39

36% 33%

33%

15%

15% 17% 18% 17% 16%

17

29

89

9

16%

16%

13%

3%

39

11%

40

37%

35% 34%

7%

18%

11%

12%

40%

17%

12%

35%

18%

12%

3

36%

18%

13%

% 39.

34%

59

37%

Figure s. Ume — sales mix breakdown by application

Figure 3. UMe — sales mix breakdown by node

100%

100%

80%

80%

60%

60%

40%

40%

20%

20%

44% 44%

Figure 4. UMC - sales by application

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, company data

Figure 5. UMC - sales mix breakdown by application

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, company data

Capex Expansion Focused on AI-Related Specialty Technologies

UMC raised its 2026 capex budget from US$1.5 billion to US$2.0 billion and approved approximately US$5 billion of investment to be deployed over the next two to three years. UMC's Singapore facilities are aiming for silicon photonics and specialty products, including power-management technologies. It will also construct a new facility in Tainan to support advanced packaging, including logic and memory stacking. Additional investment will cover customized memory stacking, direct copper-to-copper bonding and selected eight-inch specialty capacity. Management views connectivity, power management, automotive electrification, robotics, satellites and advanced packaging as structural growth opportunities that can meaningfully expand UMC's addressable market over the next five years.

• 0.11/0.13

Prepared for Kevin Lu

Prepared for Kevin Lu

AI Exposure and Revenue Growth Potential

UMC defines AI-related revenue broadly, including products used in AI compute infrastructure, connectivity, power management, silicon photonics and advanced packaging. Management expects AI-related revenue to approach US$300 million in 2026 and exceed US$1 billion within three years, implying that AI could rise from a low-single-digit percentage of sales currently to a much more meaningful contribution over time.

The fastest-growing areas are expected to be silicon photonics and advanced packaging, given their relatively early stage of commercialization. However, existing specialty technologies should also benefit, particularly power-management ICs, connectivity products, embedded high-voltage solutions, interposers and other devices supporting AI data-centre infrastructure. Management stressed that AI growth is no longer limited to processors and memory. Increasing power density, higher bandwidth requirements and more complex system architectures are generating incremental demand for sensing, connectivity, power conversion and packaging. UMC believes this broader AI infrastructure opportunity plays directly to its specialty-process portfolio and could support both revenue growth and customer share gains.

In the longer term, UMC is also developing TFLN, a platform for high-speed optical modulation. The company has already introduced an initial TFLN modulator and is working on higher-speed solutions targeting 400G lanes and 3.2-terabit optical applications. Longer term, UMC intends to combine its 12-inch silicon photonics platform, TFLN technology, photonic integrated circuits and advanced packaging into an integrated optical offering. The eventual ramp of these silicon photonics technologies, with more meaningful capacity contribution likely from 2028 onward.

Advanced Packaging Strategy and Addressable Market

UMC is broadening its advanced packaging capabilities beyond traditional interposer manufacturing. Its offerings now include direct copper-to-copper bonding, wafer-to-wafer stacking, logic-to-memory integration, memory-tomemory stacking and customized memory stacking. The company has already entered production for selected three-dimensional wafer-level hybrid-bonding applications and has more than ten active customer engagements, with several products expected to tape out during 2026 and 2027. Management expects UMC's addressable advanced-packaging market to approximately double by 2030. The new Tainan facility will provide the physical foundation for this expansion, although larger-scale revenue contribution is likely to become more visible during the 2028-2029 period.

Maintaining Buy and raise TP to NT$125

UMC's share price has corrected substantially by over 60% in recent months due to market turbulence on global de-leverage and macro concern. Yet we see the fundamental improvement outlook remains intact. Management remains constructive on demand but does not yet characterize the recovery as fully broad based. AI infrastructure demand remains strong, particularly for compute, memory, connectivity and power-management products. Automotive and industrial demand appears relatively stable, while consumer electronics remain mixed. Handsets, PCs and notebooks could still decline year on year, although UMC

Figure 1. UMe - Forward F/t band

200

150

100

50

0

2010

2012

• UMC

2014

-4.3x

2016

2018

2020

2022

2024

-7.4x

• 10.5x

• 13.6x

2025 Citioroun Inc No redistribution without Citioroun's written nermission

Prepared for Kevin Lu

Figure o. UMe - Forward F/b band & RUt

200

150

100

38%

20%

15%

10%

expects to gain wafer share through its 22/28nm and eight-inch specialty offerings. We lift our earnings projection by 59%/44%/52% thanks to better UTR and margin improvement trend. We think its current valuation at 13x/12x/11x 2026/2027/2028 EPS looks attractive. Maintaining Buy with higher TP at NT$125, still based on unchanged 15x 2027 EPS estimate.

@ 2025 Citiơroun Ine No redistribution without Citioroun's written nermission

Figure 6. UMC - Estimates Revisions

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research

Figure 7. UMC - Forward P/E band

© 2025 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Citi Research, company data

© 2025 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, company data

Figure 9. UMe - Forecast Summary

2025

2Q

58.8

-41.9

16.9

-6.1

-2.3

-4.2

10.8

4Q

61.8

-42.9

19.0

-6.7

-2.4

-4.9

12.2

NT$bn

Revenue

COGS

Gross Profit

Operating Expense

SG&A expenses

R&D expenses

EBIT

Net Interest Income

0.2

1Q

-42.4

15.4

-5.7

-2.2

-4.0

9.8

3Q

59.1

-41.5

17.6

-6.5

-2.3

-4.6

11.1

0.3

0.4

0.1

Figure 9. UMC - Forecast Summary

Pre Tax Profit

Tax Expense/(Credit)

Net Profit

EPS (NT$)

Margins (%)

Gross Margin

Operating Margin

Net Margin

Sequential Growth (%)

Volume (000s)

Revenue

Gross Profit

EBIT

Net Profit

Empl. Bonus-adj. EPS

1QE

80.6

-49.1

31.4

8

-7.

.3

-3.

-5.1

23.6

0.4

1.9

30E

90.6

-54.8

35.8

-8.4

-3.3

-5.8

27.4

0.6

5.2

4QE

88.5

-53.9

34.5

-8.3

-5.5

26.3

0.3

4.1

2025

237.6

-168.6

68.9

-25.0

-9.2

-17.7

43.9

-3.6

9.3

1Q

61.0

-43.2

17.8

-6.5

-2.5

-4.6

11.3

0.1

5.2

2026

2Q

68.7

-46.4

22.3

-7.4

-3.2

-4.7

15.0

0.2

30.1

30E

76.9

-50.0

26.9

-7.5

-2.6

-4.9

19.4

0.5

1.4

4QE

78.0

-49.8

28.2

-7.6

-3.2

-5.0

20.6

0.3

1.6

2026E

284.7

-189.5

95.2

-29.0

-11.5

-19.2

66.2

-4.4

43.8

2027E

345.7

-209.8

135.9

-32.7

-13.5

-21.9

103.2

-5.7

22.9

2028E

146.8

-34.8

-14.3

-23.3

112.0

-6.3

28.8

© 2025 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Citi Research, company data

Prepared for Kevin Lu

Prepared for Kevin Lu

Adding Upside 90-Day Short-Term View on UMC (2303.TW)

Direction:

Upside

Duration:

Within 90 Days

Category:

Thematic driven

We see UMC's improving sales supported by higher UTR and pricing trend to support its share price performance in the coming months.

NT$

180

150

120

90

60

30

Jul 25

A 46% Upside

NT$ 125.00

A 22% Upside

Bull/Bear: UMC (2303.TW)

BASE Assumptions

• Gradual UTR recovery

• Solid 28/22nm demand outlook

BEAR Assumptions

• Lower-than-expected margin outlook

• Weaker-than-expected consumer electronic demand

Prepared for Kevin Lu

NT$ 75.00

• 27% Downside

Prepared for Kevin Lu

UMC

Company description

United Microelectronics Corporation (UMC) is a leading global semiconductor foundry company. It provides high-quality IC fabrication services, focusing on logic and various specialty technologies to serve all major sectors of the electronics industry. UMC's comprehensive IC processing technologies and manufacturing solutions include Logic/Mixed-Signal, embedded HighVoltage, embedded Non-Volatile-Memory, RFSOI, and BCD. Most of UMC's 12-inch and 8-inch fabs with core R&D are located in Taiwan.

Investment strategy

We rate UMC shares a Buy. Overall inventory levels in PC, smartphone, and consumer electronics are currently healthy, and we see limited inventory correction downside. While macro uncertainties may linger, we believe UMC's niche technology offerings will help it outperform its trailing-edge foundry peers. We also expect transfer orders from TSMC and the AI-on-device trend to drive stronger demand, and see better UTR recovery for UMC going forward.

Valuation

Our target price for UMC of NT$125 is based on 15x 2027E EPS, which is higher than the midpoint of its 3-year forward PE. We believe our target multiple is justified by our belief that UMC should benefit from the robust demand in 22/28nm, TSMC's increasing order outflow opportunity, long-term opportunity in advanced packaging and photonics and that its niche technology offerings should help it outperform its trailing-edge foundry peers. Our target price equates to 2026E/27E PB of 3.5x/3.2x.

Risks

Key downside risks to our target price include: 1) a longer-than-expected demand recovery; 2) more competition from peers in 28nm; 3) worse-thanexpected developments from the company's China investment; 4) a significant decline in smartphone end-demand; 5) poor contribution from Novatek's iPhone OLED business; and 6) fiercer ASP competition from Chinese peers.

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Appendix A-1