UBS raises price target
UBS increased its price target for United Microelectronics Corp (NYSE: UMC) to NT$100.00 from NT$56.00 and reiterated a Buy rating on the Taiwan-based semiconductor foundry. The bank's move reflects its view that competitive dynamics in the mature foundry market will strengthen from mid-2025 and that these dynamics are already evident in 2026.
Stock performance and market capitalization
UMC has delivered substantial share gains over the past year, with InvestingPro data cited showing the stock has climbed 107.77% year-over-year and currently trades near its 52-week high of $12.68. The company carries a market capitalization of $30.55 billion.
UBS forecast for pricing and revenue
UBS expects blended average selling prices (ASPs) at UMC to increase by 4% in 2026 and by 6% in 2027. This outlook aligns with InvestingPro’s revenue projection, which shows UMC’s revenue forecasted to grow 7% in fiscal 2026. UBS highlights that the mature-node pricing environment is improving, a view underscored by the bank’s observation that China-based foundries operating at utilization rates above 90% are raising prices.
Company guidance and analyst commentary
UMC had guided to flat ASP in the first quarter of 2026. UBS analyst Sunny Lin described that flat guidance as “a lot more resilient than a ~5% decline in early 2024 and early 2025,” signaling that the company is experiencing a firmer pricing backdrop than in recent periods.
Industry capacity and strategic shifts cited by UBS
UBS identified a number of structural elements supporting its bullish stance. The firm notes Taiwan Semiconductor Manufacturing Company’s efforts to optimize mature capacities to serve Cloud AI demand. At the same time, UBS points to slower capacity expansion among peers, including the recent sale by Powerchip Semiconductor Manufacturing Corp (PSMC) of a 12-inch fab shell in Tongluo, Taiwan to Micron. UBS believes these dynamics could position UMC to capture additional mature-node orders as TSMC shifts focus toward advanced nodes and AI-related production.
Financial health, dividends and momentum
InvestingPro analysis included in the referenced data rates UMC’s overall financial health as "GREAT" and highlights robust price momentum. The company also yields 3.27% from dividends and has paid dividends for 16 consecutive years, attributes that may be viewed as supportive by income-focused investors.
Recent quarterly results
In its most recent quarter, United Microelectronics Corporation reported mixed outcomes. Earnings per American Depositary Share (ADS) were $0.13, falling short of the analyst consensus of $0.14. Revenue, however, came in at $1.97 billion, narrowly above the expected $1.94 billion, representing a 4.5% increase from the prior quarter and a 2.4% rise year-over-year. Utilization was reported steady at 78% for the quarter.
Market context and investor considerations
UBS’s upgrade of UMC’s price target reflects a combination of anticipated ASP improvement, a moderate revenue growth outlook for fiscal 2026, and potential order flow benefits as competitors and large peers adjust capacity and node focus. The firm also expects China’s capacity growth to moderate in coming years, which, coupled with high utilization among Chinese foundries, is contributing to an improved pricing environment.
Note - The article reports UBS’s published forecasts and the company’s disclosed quarterly results. Where projections and guidance are described, they reflect the views and statements attributed to UBS, InvestingPro data and United Microelectronics Corporation as presented.