UMC Stock Surges to Daily Limit on Strong Earnings and AI Prospects

United Microelectronics Corporation (UMC) saw its stock price hit the daily upper limit of NT$112.5 on July 30, fueled by strong second-quarter earnings and a promising third-quarter forecast. The surge, which saw over 140,000 shares traded by mid-morning, reflects growing investor confidence in the semiconductor manufacturer's recovery, particularly in mature process technologies.

UMC CEO Robert Tsao projected a 7% to 9% increase in wafer shipments for the third quarter. He also anticipates a gross profit margin between 34% and 36%, with production capacity utilization climbing above 90%. This robust performance is partly attributed to the burgeoning AI sector, with UMC expecting AI-related revenue to approach $300 million this year. Looking ahead, the company forecasts this figure to surpass $1 billion within the next three years.

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Third quarter wafer shipments are expected to increase by 7% to 9%, gross margin will continue to rise, estimated at 34% to 36%, and capacity utilization will increase to over 90%.

Foreign institutional investors were significant buyers, acquiring approximately 39,000 UMC shares on the previous day. While domestic investment trusts and proprietary traders sold off shares, with trusts offloading about 15,000 shares, the overall net buying by major institutional investors reached 21,000 shares. This activity underscores the market's positive reception to UMC's strategic positioning and financial health.

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AI-related revenue is expected to be close to $300 million this year, and is expected to exceed $1 billion in the next three years.