United Microelectronics Corporation (NEW)
UMC · NYSE
Next quarter
Reports Nov 4, 2026.
Consensus is $0.23 EPS for Sep 2026 across 1 estimates, ranging $0.23 to $0.23.
UMC Jun 2026
- 237.50%
- +10.70%
- $0.16
- $0.54
- —
- —
Highlights
- Earnings beat: Reported EPS was $0.54 versus consensus of $0.16, a 237.5% surprise; the Taiwan filing reported basic EPS of NT$3.39 versus NT$0.71 a year earlier.
- Associate contribution: Q2 share of profit from associates and joint ventures jumped to NT$23,606 million from NT$446 million a year earlier and NT$2,815 million in Q1, driving most of the earnings acceleration.
- Investment gains: Other gains reached NT$6,054 million, versus a NT$522 million loss a year ago and NT$2,114 million in Q1, primarily from fair-value gains on financial assets.
- Core operations improved: Revenue rose 17.0% year over year to NT$68,733 million and 12.6% sequentially; operating income increased 38.2% year over year to NT$14,950 million.
- Margins expanded: Gross margin was 32.5%, up from 28.7% a year ago and 29.2% in Q1; operating margin was 21.8%, versus 18.4% and 18.5%, respectively.
- Net income surged: Q2 net income attributable to UMC shareholders was NT$42,260 million, up from NT$8,903 million a year ago and NT$16,171 million in Q1.
- Cash generation remained strong: First-half operating cash flow was NT$55,679 million, up from NT$45,924 million a year earlier, while first-half capital expenditure was NT$21,349 million.
- Balance sheet strengthened: Cash and cash equivalents reached NT$124,706 million at June 30, up from NT$110,660 million at year-end 2025 and NT$111,994 million a year earlier.
Analysis
UMC delivered a much stronger-than-expected June quarter. Reported EPS of $0.54 was more than three times the $0.16 consensus estimate, while the Taiwan filing showed basic EPS of NT$3.39, versus NT$0.71 in the year-ago quarter and NT$1.29 implied by the first-half result less Q2. Revenue of NT$68,733 million increased 17.0% year over year and 12.6% sequentially, and operating income rose 38.2% year over year to NT$14,950 million. Net income attributable to shareholders reached NT$42,260 million, compared with NT$8,903 million a year ago and NT$16,171 million in Q1.
The defining feature of the print was not only better foundry execution but a substantial contribution from UMC’s investment portfolio. Share of profit from associates and joint ventures contributed NT$23,606 million, up from NT$446 million a year ago and NT$2,815 million in Q1. Fair-value gains added another NT$6,054 million, compared with a loss of NT$522 million a year ago. Core profitability nevertheless improved: gross margin expanded to 32.5% from 28.7% a year ago and 29.2% in Q1, while operating margin reached 21.8%. The quarter also included NT$30,467 million of other comprehensive income, led by equity-market gains, making total comprehensive income NT$72,691 million.
Quarterly operating performance
UMC’s underlying wafer-foundry business improved on both growth and margins. Q2 operating revenue was NT$68,733 million, up 17.0% from NT$58,758 million a year earlier and 12.6% from approximately NT$61,038 million in Q1. Wafer revenue accounted for NT$66,440 million, compared with NT$56,494 million a year ago. Gross profit rose 32.3% year over year to NT$22,323 million, and operating income increased 38.2% to NT$14,950 million.
- Gross margin: 32.5% in Q2, compared with 28.7% a year ago and approximately 29.2% in Q1.
- Operating margin: 21.8%, versus 18.4% in Q2 2025 and approximately 18.5% in Q1.
- Cost growth: Operating costs rose 10.8% year over year to NT$46,410 million, below the rate of revenue growth; research and development expense increased to NT$4,747 million from NT$4,194 million.
Associate earnings contribution
Equity-method investments transformed the reported earnings profile. UMC recorded NT$23,606 million of profit from associates and joint ventures in Q2, compared with NT$446 million in the year-ago quarter and approximately NT$2,815 million in Q1. For the first half, the contribution reached NT$26,421 million versus NT$238 million a year earlier. The largest listed equity-method holdings include Silicon Integrated Systems, Faraday Technology and Unimicron, while investments in Hsun Chieh Investment and Yann Yuan also increased materially in carrying value.
- Investment carrying value: Equity-method investments stood at NT$96,474 million at June 30, up from NT$48,643 million at December 31, 2025 and NT$41,692 million a year earlier.
- Listed holdings: The fair value of quoted equity-method investments was NT$232,714 million, compared with a carrying amount of NT$30,031 million.
- Concentration: The auditors noted that reviewed associates contributed NT$21,273 million of Q2 equity-method profit, representing 47.1% of pretax income.
Fair-value investment gains
Non-operating investment gains provided a second major boost. Other gains were NT$6,054 million in Q2, compared with a NT$522 million loss in the year-ago period and approximately NT$2,114 million in Q1. Virtually all of the Q2 amount came from NT$6,067 million of gains on financial assets and liabilities measured at fair value through profit or loss. These gains, along with the associate contribution, explain why net income expanded much faster than revenue or operating income.
- First-half effect: Fair-value gains totaled NT$8,193 million in the first half, versus a NT$1,084 million loss in the first half of 2025.
- Other comprehensive income: Q2 OCI was NT$30,467 million, including NT$13,802 million of unrealized gains on equity instruments and NT$17,290 million from associates and joint ventures.
- Portfolio reclassification: During Q2, bondholders exchanged USD192 million of UMC’s exchangeable bonds for 11 million Novatek shares at an exchange price of NT$479.8 per share.
Cash flow and capital
Cash generation supported investment and shareholder distributions. Operating cash flow was NT$55,679 million in the first half, up 21.2% from NT$45,924 million a year earlier. Investing cash outflow increased to NT$28,775 million, including NT$21,349 million of property, plant and equipment purchases, broadly similar to the NT$21,696 million spent in the prior-year period.
- Liquidity: Cash increased by NT$14,046 million during the first half to NT$124,706 million at June 30.
- Capital commitments: Construction contracts for expansion totaled approximately NT$18,200 million, with roughly NT$12,000 million not yet recognized.
- Shareholder returns: UMC paid NT$32,704 million of cash dividends during the first half and repurchased NT$3,096 million of treasury stock for employee transfers.
Balance sheet and debt
The balance sheet remained liquid despite dividend payments, investment purchases and capital spending. Total assets were NT$665,973 million at June 30, up from NT$578,996 million at year-end and NT$548,144 million a year earlier, while total equity rose to NT$443,924 million from NT$379,855 million at year-end. Debt declined in several categories, although bonds payable remained the principal funding source.
- Short-term loans: NT$2,807 million at June 30, down from NT$8,409 million at December 31, 2025.
- Bonds payable: NT$39,640 million including the current portion, down from NT$50,228 million at year-end, mainly because of exchangeable-bond conversions and bond redemption.
- Inventory: NT$37,917 million, up modestly from NT$37,228 million at year-end and 11.5% above the year-ago level.
