United Microelectronics Corp. Q4 FY2025 earnings call

• 4Q 2025 results were in line with guidance with flattish wafer shipments amid mild demand. Revenue grew 4.5% quarter-over-quarter. 22- and 28-nanometer business showed sequential growth, improving product mix. - Completed the new Phase III facility at Singapore Fab 12i, which supports customer supply chain diversification. - Collaborating with Intel on 12-nanometer and has an MoU with Polar Semiconductor. - Advanced packaging and silicon photonics identified as new growth catalysts. - First quarter 2026 guidance: wafer shipment flat, ASP in USD firm, gross margin high 20% range, capacity utilization mid-70% range, 2026 CapEx budget USD 1.5 billion.

Consolidated revenue in Q4 2025 was TWD 61.81 billion with a gross margin around 30.7%. Net income attributable to the stockholder of the parent was TWD 10.06 billion and earnings per ordinary shares were TWD 0.81. Utilization rate in Q4 was around 78%. For the full year 2025, revenue grew by 2.3% to reach TWD 237.5 billion, gross margin rate was around 29%, and net income attributable to the shareholder of the parent was TWD 41.7 billion. Revenue breakdown by region: North America represented about 21% in Q4 2025, IDM in Q4 revenue still about 20%, and 22- and 28-nanometers revenue in Q4 '25 accounted for 36% of total revenue. Full year 2025 saw North America's revenue share drop from 25% in 2024 to 22% in 2025, and IDM's revenue share increased to 19% from 16% in 2024.

• First quarter 2026: wafer shipment remains flat, ASP in USD firm, gross margin approximately in the high 20% range, capacity utilization rate in the mid-70% range. - 2026 expected to be a growth year with tape-out on 22-nanometer platform accelerating and other new solutions gaining traction. - 2026 cash-based CapEx budget is USD 1.5 billion, slightly declined from USD 1.6 billion in 2025.

Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including risks beyond the company's control. For a more detailed description, refer to recent and subsequent filings with the SEC and ROC security authorities.

Q: Thoughts on overall market outlook for 2026, semi vs foundry, and UMC's growth vs addressable market?

A: Jason Wang said AI-related segment is primary growth driver in semi-industry, foundry market growth driven by AI demand, UMC's addressable market expected to grow low single-digit and UMC's growth to outperform.

Q: Pricing outlook for mature foundry and UMC through 2026?

A: Jason Wang anticipated more favorable ASP environment in 2026, reflecting disciplined pricing strategy, product mix optimization, etc.

Q: Industry supply vs demand for mature nodes and client engagement?

A: Jason Wang viewed landscape shift as opportunity to optimize product mix, improve ASP and margin.

Q: Singapore expansion, capacity ramp, and product differentiation?

A: Capacity increase around 1.2% YOY in 2026, Singapore facility expansion starts 2H 2026, geographically diverse manufacturing with coverage of most nodes.

Q: Like-for-like pricing environment, passing on costs?

A: Jason Wang said pricing discussion ongoing, some customers have adjusted pricing upward, some have onetime price adjustment downward.

Q: Impact of inventory restocking on first quarter outlook?

A: Jason Wang said Q1 in line with addressable market seasonality, consumer segment revenue to increase, communication and automotive to decline.

Q: Seasonality and 2026 shipment outlook?

A: Jason Wang said 2026 second half will outperform first half, driven by new projects in specialty technologies.

Q: Future growth drivers, advanced packaging and silicon photonics?

A: Jason Wang talked about advanced packaging enablers and extenders, silicon photonics solutions in development, ramping in 2027.

Q: Involvement in advanced packaging solutions and Interposer capacity?

A: Jason Wang said UMC has capabilities in advanced packaging, working with over 10 customers, capacity planning aligned with customer ramp.

Q: Geographic split of revenues, Intel 12-nanometer progress, Xiamen fab strategy?

A: Jason Wang said Intel project progresses smoothly, tape-out in 2027, Xiamen fab part of geographically diverse footprint, running at full utilization.

Q: Revenue contribution of non-volatile memory and power management ICs?

A: Jason Wang said specialty revenue represents about 50% of overall revenue, high voltage about 30% of that, rest non-volatile memory and DCB.

Q: Gross margin trend, advanced packaging revenue contribution?

A: Chi-Tung Liu said gross margin dependent on multiple variables, advanced packaging revenue expected to grow significantly in 2027.

Q: Silicon photonics addressable market, competitive advantage?

A: Jason Wang said Singapore facility part of strategy, 12-inch advantage, combining with advanced packaging know-how for value.

Q: Intel project next steps, collaboration on 7-nanometer?

A: Jason Wang said focus on 12-nanometer now, will consider expanding collaboration if makes sense.

Q: Market dynamics comparison to 2021, pricing flexibility?

A: Jason Wang said AI momentum continues, pricing discussion ongoing, flexible based on market dynamics.

Q: Pricing alignment with supply-demand changes?

A: Jason Wang said pricing strategy consistent, flexible based on changed conditions.