UMC Earnings: Short-Term Weakness in Automotive and Industrials Continues to Beat Down Shares

We retain our fair value estimate of TWD 70 per share for no-moat-rated United Microelectronics despite lowering our 2024 revenue and EPS forecasts by 5% and 6%, respectively, amid a weaker-than-expected automotive and industrial outlook. Our midcycle estimates are largely unchanged. We see UMC’s shares as undervalued, as investors are focusing on short-term headwinds in automotive and industrial demand and downplaying structural growth for supporting chips used in less-powerful devices that emphasize cost and low power consumption.