One-glance verdict
Overvalued
$9.74 our estimate vs market $18.53
Wall Street consensus: $19.12 (96.3% higher than our fair-value estimate)
90% above our estimate, beyond the bull case
Fundamentals snapshot
United Microelectronics Corporation
UMC · NYQ · Technology · Semiconductors
Current price
$18.53
52-week range
$6.97 - $28.96
Market cap
$46.47B
Balance sheet
Healthy
28.55x Strong cushion
Net cash $2.58B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.3% last year.
- Reward Returns 21.3% on equity, ahead of 50% of its peers.
- Risk Stock trades 4937.4% above its 5-year average P/E.
- Risk Forward P/E (21.1x) is higher than trailing (17.2x) - earnings are expected to drop.
What this company does
United Microelectronics Corporation
United Microelectronics Corporation (UMC) is a company that makes the tiny computer chips found in many electronics, and its main money comes from these chip-making services, which is important because it fuels the technology we use every day. UMC's business involves taking the blueprints for these chips and physically manufacturing them for other companies, a process that requires significant investment in specialized factories.
What it actually does
UMC is a semiconductor foundry, which is like a specialized factory that makes the tiny computer brains, called integrated circuits (ICs), that power all sorts of electronic devices. Instead of designing its own chips, UMC takes designs from other companies and manufactures them on silicon wafers. Think of it like a custom cake shop: customers bring their own recipes (chip designs), and UMC bakes the cakes (manufactures the chips) for them. These chips are essential components in everything from smartphones and computers to cars and home appliances.
Wafer Fabrication
This is UMC's core business, where it manufactures semiconductor wafers for other companies. UMC produces chips using a variety of technologies, focusing on what are known as 'mature' and 'specialty' processes. These are not necessarily the newest or fastest chip-making technologies, but they are crucial for many applications where reliability, power efficiency, and specific functionalities are more important than cutting-edge speed. This segment represents the vast majority of UMC's revenue, making it the company's primary money-maker.
Technology Licensing
Beyond manufacturing, UMC also licenses its proprietary chip-making technologies to other companies. This means UMC shares its specialized knowledge and processes, allowing other firms to use them in their own operations. While this is a smaller part of UMC's overall business compared to wafer fabrication, it represents an additional revenue stream derived from the company's deep expertise in semiconductor manufacturing.
What management is betting on now
UMC is strategically focusing on 'specialty technologies' that cater to growing markets like 5G communication, the Internet of Things (IoT), and the automotive sector. The company is investing in advanced manufacturing processes, particularly for 12-inch wafers, to meet the demand for chips used in these areas. UMC is also collaborating with other industry players, such as Intel, to develop new manufacturing nodes (like 12nm technology) that will be important for future electronic devices. This focus on specialized, high-demand applications aims to ensure UMC remains a competitive and relevant partner in the ever-evolving semiconductor industry.
How the company got here
United Microelectronics Corporation (UMC) was founded in 1980 in Taiwan, emerging from a government research institute to become the island's first semiconductor company. It played a foundational role in Taiwan's technology industry, initially as an integrated device manufacturer (IDM) that designed and produced its own chips. A significant turning point came in 1995 when UMC shifted its business model to become a pure-play foundry. This means UMC now focuses solely on manufacturing chips designed by other companies, rather than competing with them. This strategic move allowed UMC to become a key player in the global semiconductor supply chain, expanding its manufacturing facilities internationally over the years.
What it actually does
UMC is a semiconductor foundry, which is like a specialized factory that makes the tiny computer brains, called integrated circuits (ICs), that power all sorts of electronic devices. Instead of designing its own chips, UMC takes designs from other companies and manufactures them on silicon wafers. Think of it like a custom cake shop: customers bring their own recipes (chip designs), and UMC bakes the cakes (manufactures the chips) for them. These chips are essential components in everything from smartphones and computers to cars and home appliances.
Wafer Fabrication
This is UMC's core business, where it manufactures semiconductor wafers for other companies. UMC produces chips using a variety of technologies, focusing on what are known as 'mature' and 'specialty' processes. These are not necessarily the newest or fastest chip-making technologies, but they are crucial for many applications where reliability, power efficiency, and specific functionalities are more important than cutting-edge speed. This segment represents the vast majority of UMC's revenue, making it the company's primary money-maker.
Technology Licensing
Beyond manufacturing, UMC also licenses its proprietary chip-making technologies to other companies. This means UMC shares its specialized knowledge and processes, allowing other firms to use them in their own operations. While this is a smaller part of UMC's overall business compared to wafer fabrication, it represents an additional revenue stream derived from the company's deep expertise in semiconductor manufacturing.
What management is betting on now
UMC is strategically focusing on 'specialty technologies' that cater to growing markets like 5G communication, the Internet of Things (IoT), and the automotive sector. The company is investing in advanced manufacturing processes, particularly for 12-inch wafers, to meet the demand for chips used in these areas. UMC is also collaborating with other industry players, such as Intel, to develop new manufacturing nodes (like 12nm technology) that will be important for future electronic devices. This focus on specialized, high-demand applications aims to ensure UMC remains a competitive and relevant partner in the ever-evolving semiconductor industry.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $9.74 vs current price $18.53
Wall Street consensus is the average analyst price target: $19.12 (96.3% higher than our fair-value estimate).
Our most-likely fair value is $9.74 a share — about 47.4% below today's price of $18.53, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $2.6B - more cash than debt. Interest coverage 28.6x.
Net debt
$-2.58B
Interest coverage
28.55x
United Microelectronics Corporation's profit covers its interest bill about 28.6 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
UMC
BASELINE
United Microelectronics Corporation
Total debt $1.95B Interest coverage 28.55x This is the baseline the peer rows are being compared against.
Total debt $25.11B Interest coverage 156.51x +448% vs UMC Carries about 5.5x more debt cushion than UMC.
Total debt $1.68B Interest coverage 15.94x -44% vs UMC Carries about 1.8x less debt cushion than UMC.
Total debt $50.54B Interest coverage -0.02x -100% vs UMC This peer has almost no interest-payment cushion compared with UMC.
Total debt $141.70M Interest coverage 53.08x +86% vs UMC Carries about 1.9x more debt cushion than UMC.
Total debt $5.18B Interest coverage 20.56x -28% vs UMC Carries about 1.4x less debt cushion than UMC.
What you should know
The case for and against UMC
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.3% last year.
-
Returns 21.3% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Stock trades 4937.4% above its 5-year average P/E.
-
Forward P/E (21.1x) is higher than trailing (17.2x) - earnings are expected to drop.
-
Operating margin compressed from 37.2% to 21.7% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
17.16x
Forward P/E
21.10x
P/B
3.35x
P/S
0.19x
EV/EBITDA
-0.31x
PEG ratio
1.04x
Profitability
How much profit each dollar creates
Gross margin
30.6%
Operating margin
21.7%
Net margin
33.3%
ROE
21.3%
ROA
5.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.14x
Current ratio
2.17x
Quick ratio
1.77x
Total debt
$1.95B
Total cash
$4.52B
Growth
How the business has been compounding
Revenue TTM
$7.69B
Revenue 5Y CAGR
-5.2%
EPS TTM
1.08
EPS 5Y CAGR
-21.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$3.06B
Free CF TTM
$1.51B
FCF margin
19.6%
Dividend
Shareholder payout
Yield
2.0%
Payout ratio
0.0%
Last ex-div date
2026-07-08