United Microelectronics (UMC) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached NT$58.8 billion, up 1.6% sequentially and 3.4% year-over-year, with net income at NT$8.9 billion and EPS of NT$0.71; wafer shipments rose over 6% quarter-over-quarter, and utilization improved to 76%.

• 22/28nm portfolio revenue hit a record 40% of total sales, driven by communications, NAND controllers, Wi-Fi, and LCD controllers; advanced technology (≤40nm) contributed 55% of total revenue.

• Foreign exchange headwinds reduced gross margin by nearly 3 percentage points, resulting in a Q2 gross margin of 28.7%.

• Net income rose 14.5% from Q1 but declined 35.4% year-over-year.

• EPS for Q2 was NT$0.71, up from NT$0.62 in Q1 and down from NT$1.11 in Q2 2024.

Financial highlights

• Q2 gross margin was 28.7% (NT$16.8 billion), operating margin 18.4%, and net income margin 15.1%.

• Operating income for Q2 was NT$10.82 billion, up 10.6% sequentially.

• First half 2025 revenue grew 4.7% year-over-year to NT$116.6 billion; gross margin for H1 was 27.7% versus 33.1% in H1 2024.

• Cash and cash equivalents at end of H1 2025 were NT$111.99 billion; total equity stood at NT$337.04 billion.

• Debt to equity ratio rose to 63% as total liabilities increased to NT$211.10 billion.

Outlook and guidance

• Q3 2025 wafer shipments expected to increase by low single digits, with NT dollar revenue pressured by FX; gross margin to remain similar to Q2, assuming stable FX rates.

• Capacity utilization projected in the mid-70% range; 2025 CAPEX budget unchanged at US$1.8 billion, with 90% allocated to 12-inch capacity.

• Projected total quarterly capacity for Q3 2025 is 1,305K 12-inch wafer equivalents, up from 1,290K in Q2.

• Full-year 2025 outlook unchanged, with addressable market expected to grow low single digits and company to outgrow the market.

• Monitoring US tariff policy and FX risks; focus on financial flexibility and resilience.