United Microelectronic Corp. (UMC)

UMC is a foundry: it makes chips to other companies' designs using its own manufacturing processes, and sells them mostly as processed silicon wafers. By application, communication chips made up 41.4% of 2025 wafer sales, consumer products 30.6%, computers 11.6% and other uses 16.4%. For customers who want finished chips it offers a turnkey service, subcontracting assembly and testing to Siliconware Precision Industries and Advanced Semiconductor Engineering in Taiwan. 1819202122

How it operates

UMC is a foundry: it makes chips to other companies' designs using its own manufacturing processes, and sells them mostly as processed silicon wafers. By application, communication chips made up 41.4% of 2025 wafer sales, consumer products 30.6%, computers 11.6% and other uses 16.4%. For customers who want finished chips it offers a turnkey service, subcontracting assembly and testing to Siliconware Precision Industries and Advanced Semiconductor Engineering in Taiwan. 1819202122

Its customers come in two kinds: fabless design companies, meaning chip designers with no factories of their own, which bought 80.9% of 2025 wafer sales, and integrated device manufacturers, which also make chips themselves and bought 19.1%. The filing names Texas Instruments and Intel among the manufacturers and MediaTek, Realtek and Novatek among the designers. The top ten customers took 57.0% of revenue in 2025 and the largest alone 11.8%; the largest of 2023, at 13.1%, was a different company from the one that led in 2024 and 2025. 2324252627

Counted by where customers have their headquarters, Taiwan brought in 38.6% of 2025 revenue, up from 30.7% in 2023; the United States 22.0%, down from 26.6%; China including Hong Kong 15.8%; Korea 10.7%; Europe 8.5%; and Japan 4.4%. Asian sales are run from the main office in Taiwan, European sales through a subsidiary in Amsterdam and North American sales through UMC Group (USA) in Silicon Valley. 2829

UMC runs its own factories and owns nearly all the equipment in them. It has twelve fabs: eight in Taiwan, all in the Hsinchu Science Park except Fab 12A in the Southern Taiwan Science Park; Fab 12i in Singapore; Fab 8N in Suzhou and Fab 12X in Xiamen, China; and Fab 12M in Mie, Japan. Four of them process 12-inch wafers, and all run around the clock. Its equipment comes mainly from Europe, Japan and the United States, and its raw silicon wafers chiefly from Shin-Etsu, GlobalWafers, Sumco Group and Soitec. 303132333435

It prices by the wafer or by the die, weighing the technology, market conditions, order size, cycle time, the relationship with the customer and how full its fabs are. Fullness matters because most costs are fixed: in 2025 about 70.8% of manufacturing costs were depreciation, license amortization, indirect labor, utilities and part of indirect materials, so higher utilization spreads them over more wafers. The fabs ran at 75.2% of capacity in 2025, up from 68.5% in 2023 and 68.7% in 2024. The company reports in New Taiwan dollars and, for convenience, converts to US dollars at NT$31.37 to the dollar. 3637383940

The specifics

UMC does not race for the smallest transistors, by choice. It says building the earliest and most advanced technology without near-term volume may prove costly, so it prefers to buy improved, cheaper versions of the equipment once demand arrives. It introduced 28nm to customers in 2011 and put 22nm into volume production in 2021, and it has shipped 14nm FinFET wafers since 2017. Around that logic it offers specialty processes: embedded memory for microcontrollers and cars, high-voltage processes for display drivers, and processes for image sensors, power management and radio-frequency chips. 414243444546

Its route into American production runs through partners. Under a collaboration signed with Intel in January 2024 the two are developing a 12nm process together: Intel completed the technology transfer in 2025, qualification at Intel's Arizona fab is expected to be completed in 2026, and the company expects 12nm production to begin in 2027. In December 2025 it signed a memorandum of understanding with Polar Semiconductor to explore 8-inch wafer production in the United States, and it licensed imec's iSiPP300 silicon photonics process to bring a 12-inch photonics platform to market. In 2022 it agreed with DENSO to produce power chips for cars together at the 300mm fab of USJC, its Japanese subsidiary. 474849505152

The filing names no competitor. It says UMC competes with other dedicated foundries and with chip makers that have fabs of their own, that some rivals have far greater resources, and that new foundries competing directly are likely to push prices down and create overcapacity in older technologies. It protects its processes with more than 16,700 patents worldwide, more than 7,490 of them in the United States, and holds patent cross-licenses with IBM and Broadcom, among others. 53545556

Politics shapes where it can sell and build. New US export rules from January 2025 put due diligence duties on foundries, UMC included, and the filing warns that tension in the Taiwan Strait could deter customers from placing orders. UMC was incorporated in Taiwan in May 1980, listed on the Taiwan Stock Exchange in 1985 and on the New York Stock Exchange in 2000. It set up its Xiamen fab company in 2014 and, since July 2023, owns all of it together with Hejian, its Chinese subsidiary. An earthquake in January 2025 damaged wafers in process at Fab 12A in Tainan. 5758596061626364

What drives growth, line by line

Revenue, reported in New Taiwan dollars, rose 2.3% in 2025 to NT$237,553 million (US$7,573 million), still below the 278.7 billion of 2022. The filing credits more wafers shipped, 3,870 thousand 12-inch equivalents against 3,446 thousand, partly offset by a 5.4% fall in the average selling price and a 2.9% rise of the New Taiwan dollar against the US dollar. Profit fell as sales rose: gross margin slid from 32.6% to 29.0%, and net income fell 17.3% to NT$40,360 million. 65666768

Communication. The largest application: 41.4% of 2025 wafer sales, down from 42.1% in 2024 and 45.1% in 2023. The filing does not say what moved it; networking and telecommunications are among the high-volume uses it says it focuses on. 2069

Consumer. 30.6% of 2025 wafer sales, up from 28.4% in 2024 and 24.0% in 2023, the one application whose share grew in both years. The filing does not say what drove it; the consumer uses it names for its processes include display driver chips, set-top boxes, digital TVs and wearables. 204570

Computer. 11.6% of 2025 wafer sales, down from 13.5% in 2024 after rising from 11.0% in 2023. The filing gives no reason for the move. 20

Others. 16.4% of 2025 wafer sales, against 16.0% in 2024 and 19.9% in 2023; the filing does not break this group down. 20

By technology, the mix moved toward the smaller nodes: 28nm and below rose to 36.8% of wafer sales from 33.7% in 2024 and 30.7% in 2023, and 40nm to 16.1% from 13.8%, while 90nm fell to 7.6% from 10.7% and 0.11 to 0.13 micron to 7.4% from 10.2%. Nodes of 14nm and under stayed at 0.0%. The filing counts this mix among the main factors in revenue and profit, because wafers made with more complex technology command higher prices. 71727374

What comes next, in the company's own words: the first phase of a new fab beside Fab 12i in Singapore, designed for 30,000 wafers a month on 28nm and 22nm processes, with production expected to commence in the second half of 2026; 12nm production with Intel, expected to begin in 2027; and expansion projects it says are backed by customers who signed multi-year supply agreements. Capital spending fell to NT$50,562 million in 2025 from NT$91,052 million in 2024. 7576487778

The read's section on the people who run it is on the People tab.

What the desk infers Inferred

1. Inferred

   The one customer above a tenth of revenue in 2024 and 2025 is most likely headquartered in Taiwan, UMC's home market, rather than in the United States or China.

   Because

   • The filing counts the same Customer A above a tenth of revenue in 2024 and 2025, at 10.4% and then 11.8%, the largest customer in both years. 2627
   • Customers headquartered in Korea, Europe and Japan brought in 10.7%, 8.5% and 4.4% of 2025 revenue, each less than that one customer alone, so it must be headquartered in Taiwan, China or the United States. 2826
   • As that customer grew from below a tenth in 2023, Taiwan's share of revenue rose from 30.7% to 36.1% and then 38.6%, while the United States fell from 26.6% to 25.0% and then 22.0%, and China slipped from 16.0% to 15.8% in 2025. 2827
   Confidence 60 of 100Wrong if A disclosure by UMC or by the customer showing that Customer A is headquartered in the United States or China.
2. Inferred

   In practice UMC's leading edge is 28 and 22 nanometers. The 14nm process it has shipped since 2017 has not grown into a measurable share of sales, the capacity it is adding itself runs 28nm and 22nm, and its next step down, 12nm, is being set up in Intel's factory rather than its own.

   Because

   • Nodes of 14nm and under made up 0.0% of wafer sales in each of 2023, 2024 and 2025. 71
   • It has shipped 14nm wafers to customers since March 2017. 43
   • The new Singapore fab will use 28nm and 22nm processes. 76
   • Its 12nm process is being qualified at Intel's Arizona fab, with production expected to begin in 2027. 48
   • It says developing the most advanced technology without near-term volume may prove costly, and prefers to buy proven equipment later. 41
   Confidence 75 of 100Wrong if A year in which the filing's table shows nodes of 14nm and under above zero, or a plan to run 12nm or smaller in a fab UMC owns.
3. Inferred

   UMC's prices fell like for like in 2025, not through a shift toward cheaper wafers: its average price dropped even as its mix moved toward the more complex wafers that command higher prices, which fits the price competition in older technologies that the filing warns new foundries bring.

   Because

   • The average selling price fell 5.4% in 2025 after 5.0% in 2024, which the filing calls nominal price erosion. 79
   • Over the same year 28nm and below rose from 33.7% to 36.8% of wafer sales and 40nm from 13.8% to 16.1%, while 90nm and 0.11 to 0.13 micron shrank. 71
   • The filing says wafers made with more complex technology generally command higher prices, though prices for any one technology generally decline over its life. 7480
   • Shipments rose from 3,446 thousand to 3,870 thousand 12-inch equivalent wafers, so it was price, not volume, that fell. 66
   • It warns that new foundries competing directly are likely to start a trend of competitive pricing and overcapacity in legacy technology. 54
   Confidence 60 of 100Wrong if A filing that attributes the 2025 fall in average price mainly to a shift toward cheaper wafers or to the currency, rather than to lower prices for the same wafers.