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UMC Reports Strong Q3 Results and Bullish ASP Outlook, Yet Shares Plummet
Electronic Technology · Semiconductors · economic_daily · 2026-10-29
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Despite UMC's solid third-quarter earnings and a projected 10% increase in average selling prices for next year, the company's stock has faced significant selling pressure, declining over 30% from its recent peak.
What Happened
Strong Financial Performance: UMC reported a solid third quarter with revenue reaching NT$74.24 billion, marking an 8% quarterly increase and a 25.6% year-over-year growth. Both gross and operating margins improved, with the capacity utilization rate holding steady at 92% and earnings per share coming in at NT$1.32.
Future Growth Outlook: CEO Jason Wang expects demand momentum to persist through the fourth quarter and projects a 10% year-over-year increase in average selling prices (ASP) for next year. The company is actively reallocating capacity toward advanced packaging and silicon photonics to meet surging demand in these specialized sectors.
AI Strategic Focus: UMC is positioning AI as a key growth driver, aiming for AI-related revenue to account for 25% of its total business within the next three years. By leveraging its specialized manufacturing processes, the company intends to capture new opportunities in high-growth technology markets.
Market Reaction: Despite the positive operational guidance, UMC shares have struggled, falling more than 8% in a single session on the 29th. The stock has experienced a sharp correction, dropping over 30% from its recent high of NT$168.5 in September, reflecting investor caution regarding the broader semiconductor cycle.