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United Microelectronics Corp 2303

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Stock XTAI Rating as of
TWD 50.10 +0.30 (0.60%)
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As of Delayed Price Open
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Company Report

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

Phelix Lee

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.

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Price vs Fair Value

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2303 is trading at a 28% discount.
Price
TWD 50.20
Fair Value
TWD 43.00
Uncertainty
High
1-Star Price
TWD 317.60
5-Star Price
TWD 14.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The advent of 5G and Internet of Things has created new avenues of growth for nonleading foundries like UMC, where cost, power and reliability are favored over performance.

Bears

UMC’s pause in new process technologies weakens its position against Chinese foundries like SMIC.

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Trading Information

Previous Close Price
TWD 50.20
Day Range
TWD 49.90–50.40
52-Week Range
TWD 42.40–54.80
Bid/Ask
TWD 50.10 / TWD 50.20
Market Cap
TWD 627.70 Bil
Volume/Avg
14.8 Mil / 71.7 Mil

Key Statistics

Price/Earnings (Normalized)
10.34
Price/Sales
2.77
Dividend Yield (Trailing)
7.39%
Dividend Yield (Forward)
7.39%
Total Yield
7.23%

Company Profile

Founded in 1980, United Microelectronics is the world's third-largest dedicated chip foundry, with 7% market share in 2023 after TSMC and GlobalFoundries. UMC’s headquarters are in Hsinchu, Taiwan, and it operates 12 fabs in Taiwan, Mainland China, Japan and Singapore, with additional sales offices in Europe, the U.S. and South Korea. UMC features a diverse customer base including Texas Instruments, MediaTek, Qualcomm, Broadcom, Xilinx and Realtek, supplying a wide range of products applied in communications, display, memory, automotive and more. UMC employs about 20,000 people.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Value
Total Number of Employees
19,833
Website
https://www.umc.com

Competitors

Valuation

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Metric
2303
INTC
GFS
Price/Earnings (Normalized)
 10.3430.6520.67
Price/Book Value
 1.831.282.38
Price/Sales
 2.772.443.59
Price/Cash Flow
 7.007.8310.10
Price/Earnings
2303
INTC
GFS

Financial Strength

Metric
2303
INTC
GFS
Quick Ratio
 1.951.011.56
Current Ratio
 2.381.542.11
Interest Coverage
 55.000.35—
Quick Ratio
2303
INTC
GFS

Profitability

Metric
2303
INTC
GFS
Return on Assets (Normalized)
 11.07%2.37%7.23%
Return on Equity (Normalized)
 17.84%4.35%12.66%
Return on Invested Capital (Normalized)
 14.47%2.66%9.89%
Return on Assets
2303
INTC
GFS
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Semiconductors Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NVDA
NVIDIA CorpTzqnvjjtsnQnyc$2.2 Tril
AVGO
Broadcom IncQydddrqnlRcwr$622.9 Bil
TSM
Taiwan Semiconductor Manufacturing Co Ltd ADRPvvbfnbxyClcml$608.3 Bil
AMD
Advanced Micro Devices IncFczrdmkcnTyzgrf$254.4 Bil
QCOM
Qualcomm IncKjcpddrcPhnhpq$184.9 Bil
TXN
Texas Instruments IncNtkhssjzqYht$161.6 Bil
INTC
Intel CorpYwfltjdmdCkcrk$149.5 Bil
MU
Micron Technology IncJzmbqvwQhn$127.2 Bil
ARM
ARM Holdings PLC ADRQygbclyfVgng$104.8 Bil
ADI
Analog Devices IncGgrwtpkwsSnwr$98.2 Bil

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