UMC Earnings: Undervalued Because Consumer Devices' Green Sprouts Trump Auto Downside

Our fair value estimate for no-moat United Microelectronics Corp, or UMC, stays at TWD 62 per share after minor changes. Management’s comments on consumer electronics demand bottoming and an unimpressive automotive outlook are in line with what other firms in our coverage have said so far. UMC’s shares remain undervalued, in our view, pressured by uncertain short-term automotive and industrial demand. We believe UMC is virtually unaffected by updated U.S. chip export rules as of Oct. 17, as its yet-to-ramp artificial intelligence-related products have little influence on chip performance.