United Micro Electronics - ADR

Q1 2025 Financial Performance: UMC reported consolidated revenue of NT$57.86 billion with a gross margin of 26.7%. Net income attributable to shareholders was NT$7.78 billion, equating to an EPS of NT$0.62. While revenue was flat sequentially, it increased by 5.9% year-over-year, driven by a 12% rise in wafer shipments compared to Q1 2024. However, net income demonstrated a considerable year-over-year decline of 25%.

Q2 2025 Guidance: For the second quarter, UMC anticipates wafer shipment to increase by 5% to 7% sequentially, with ASP remaining flat in U.S. dollar terms. Gross margin is expected to rebound to approximately 30%. Capacity utilization is forecasted to return to the mid-70% range, reflecting a return to normal operations post-impacts from the recent earthquake.

Impact of Tariffs: There is limited visibility regarding the impact of tariffs on order behavior in Q2 and the second half of 2025. While UMC is experiencing a moderate recovery in Q2 sales, concerns over customer behaviors and any potential decoupling strategies lead to uncertainty regarding demand projections for the latter half of the year.