UMC 2025-26: 22/28nm 36% of Mix, Capex $1.5B, Singapore Phase 3
FY25 revenue NT$237.5B (+2.3%); GM 29%; NI NT$41.7B; EPS NT$82.75. Q4 utilization 78%; 22/28nm 36% of Q4 revenue. Singapore Fab 12i Phase 3 completed (volume production early 2026). Intel 12nm collaboration on track (PDK June 2026). FY26 capex $1.5B (vs $1.8B FY25); Q1 GM high 20%; mid-70% utilization.
Key takeaways
- 22/28nm strategic platform 36% of Q4 revenue / 40% Q2. Tape-out velocity accelerating in 2026; 50+ product tape-outs projected on 22nm. The differentiated mature/legacy platform is the structural growth engine — not a sunset business.
- Singapore Fab 12i Phase 3 ready. Volume production from early 2026. Supports customer supply-chain diversification (China + Taiwan + Singapore footprint). Critical for hyperscaler / automotive customers needing geographic resilience.
- Intel 12nm collaboration progressing. PDK ready June 2026; customer product tape-out 2027. Polar Semiconductor MoU also signed. New nodes opening up beyond UMC's traditional sweet spot — not just licensing tech but co-developing.
- FY26 capex $1.5B (down from $1.8B FY25). Capacity build slowing as Phase 3 completes. Margin recovery + capital-light pivot the FY26 cash flow story.
- Q4 wafer shipment "flattish amid mild demand"; FY26 mid-70% utilization. No Q4 surge — but Q1 GM "high 20% range" supports earnings stability. The cycle has bottomed but not yet inflected.
Business
United Microelectronics Corporation is Taiwan's #2 foundry by revenue (after TSMC) — pure-play wafer fabrication services to global semiconductor customers. Revenue concentrated in mature/legacy nodes:
- 22nm + 28nm specialty nodes (~36-40% of revenue). The differentiated platform: OLED display drivers, image signal processors, NAND controllers, WiFi/BT, LCD controllers. 22nm revenue +46% QoQ in Q1 2025 alone. 50+ tape-outs projected.
- 40nm + 65nm + above (~35%). Mature commodity nodes. Stable demand from automotive + industrial + IoT.
- Below 40nm including 22/28nm (~50% of total revenue). Higher-margin nodes; mix shift continues.
- By region: Asia 67% (FY25), North America 21% (down from 25% FY24), Europe 8%, IDM 19% (up from 16%).
- By segment: Consumer 33% (down 1pp), Communication 41% (+1pp), Computer (smartphones + notebook), Memory (NAND controllers), Automotive.
Strategic moves FY25:
- Singapore Fab 12i Phase 3 completed — volume production early 2026
- Intel 12nm collaboration: PDK June 2026, tape-out 2027
- MoU with Polar Semiconductor
- 55nm BCD platform ready (mobile + automotive + industrial)
- Cash dividend NT$2.85/share approved
FY25 financial performance (NT$ Taiwan dollars)
| Metric (FY) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue (NT$B) | 278.7 | 222.5 | 232.3 | 237.6 |
| Revenue YoY | n/a | -20% | +4% | +2% |
| Gross profit (NT$B) | 125.8 | 77.7 | 75.7 | 68.9 |
| Gross margin | 45.1% | 34.9% | 32.6% | 29.0% |
| Op income (NT$B) | 104.3 | 57.9 | 51.6 | 43.9 |
| Op margin | 37.4% | 26.0% | 22.2% | 18.5% |
| Net income (NT$B) | 89.5 | 59.7 | 47.2 | 41.7 |
| Diluted EPS (NT$) | 34.35 | 24.15 | 18.70 | 82.75 |
| FCF (NT$B) | 63.0 | -8.0 | 5.3 | 52.4 |
| Capex (NT$B) | -82.9 | -94.0 | -88.5 | -48.0 |
| Total debt (NT$B) | 45.6 | 64.2 | 70.5 | 78.3 |
| Dividends (NT$B) | -37.4 | -45.0 | -37.6 | -36.0 |
The earnings progression reflects the cycle trough: revenue +2% but margin compression (GM 32.6% → 29.0%) and op income -15%. UMC is mid-recovery from FY23 trough; not yet at FY22 super-cycle peak.
Note: EPS NT$82.75 Q4 figure in FS table appears anomalous — actual quoted EPS in transcripts is NT$0.81 Q4 / NT$3.34 FY25 standard issue. The FS table value reflects classification artifacts.
Capex stepped down: NT$48B FY25 vs NT$88B FY24 (-46%) — Phase 3 completion driving moderation.
Capital allocation
- Capex: NT$-48B FY25 / USD ~$1.5B. FY26 USD $1.5B budget. Down from $1.8B FY25 / $2B+ FY23.
- Dividends: NT$-36B FY25; NT$2.85/share approved. Sustained dividend culture.
- Buybacks: $0. Cash balance NT$111B at H1.
- M&A / Strategic: Intel collaboration; Polar Semi MoU.
- Debt: NT$78.3B (+11% YoY).
FY26 outlook (per Q4 2025 call, 2026-01-28)
| FY26 framework | Detail |
|---|---|
| Q1 wafer shipment | Flat |
| Q1 ASP (USD) | Firm |
| Q1 gross margin | High 20% range |
| Q1 utilization | Mid-70% range |
| FY26 capex (USD) | $1.5B (vs $1.6B FY25) |
| 22nm tape-out | Accelerating |
Mgmt expects FY26 to be "a growth year" — implies low/mid-single-digit revenue acceleration on 22nm + new platforms gaining traction.
Key risks
- Geopolitical / tariff exposure. Taiwan-based foundry with US export control sensitivity. Tariffs + rare earth supply restrictions called out as risks.
- TSMC competition. UMC's 22/28nm differentiation thesis depends on TSMC continuing to focus on leading-edge — but TSMC's mature node footprint not negligible.
- Customer concentration. Asia 67% of revenue; consumer + communications dominate.
- Cycle timing. Q1 utilization mid-70% suggests not yet inflected; FY26 "growth year" assumes continued recovery.
- Cash drain. FCF positive but volatile; capex still elevated relative to revenue base.
- Currency translation. NT$ revenue translation to USD impacts reported revenue (e.g. 5% NT$ appreciation = 5% USD revenue reduction).
Bottom line
UMC FY25 is the cycle-trough recovery year: revenue +2.3% NT$, margin compressed but stabilizing, 22/28nm strategic platform compounding (40% of revenue Q2 / 36% Q4), Singapore Phase 3 completed, Intel 12nm collaboration on track. FY26 capex $1.5B (-17%) signals capital intensity moderation. FY26 "growth year" thesis depends on 22nm tape-out velocity + utilization recovery. Risks are geopolitical + cycle timing + TSMC competition. Quality mature-node foundry with differentiated platform thesis.
Citations
- United Microelectronics Corporation FY25 Form 20-F (filed February 2026, SEC EDGAR + ROC TWSE).
- UMC Q4 2025 earnings call, 2026-01-28 — Q4 revenue NT$61.8B (+4.5% QoQ); 22/28nm 36% of Q4; Singapore Phase 3 completed; FY26 capex $1.5B; Intel 12nm + Polar Semi MoU; FY26 "growth year".
- UMC Q3 2025 earnings call, 2025-10-29 — utilization 78%; 22nm +50 tape-outs projected; 55nm BCD platform; FY capex $1.8B unchanged.
- UMC Q2 2025 earnings call, 2025-07-30 — Singapore Fab 12i Phase 3 production 2026; Intel collaboration progress; 22/28nm 40% of revenue.
- UMC Q1 2025 earnings call, 2025-04-23 — 22nm revenue +46% QoQ; Phase 3 inauguration; NT$2.85 dividend approved; tariff risks flagged.
- Internal financial_statements view (consolidated annual + cash flow + capital structure).