United Microelectronics (NYSE:UMC) reported third-quarter 2026 revenue of TWD 74.24 billion, up 8% sequentially, as demand strengthened across its markets and wafer shipments reached a record level. The company said utilization increased to 92% from 85% in the prior quarter, while several 12-inch fabs operated at full capacity and its 8-inch operations recovered strongly.
Net income attributable to shareholders was TWD 16.43 billion, or TWD 1.32 per ordinary share, for the third quarter. Gross margin improved to 34% from 32.5% in the preceding quarter, while gross profit totaled TWD 25.2 billion.
For the first nine months of 2026, UMC reported revenue of TWD 204 billion, up 16.1% year over year. Net income attributable to shareholders rose 136.5% year over year to TWD 74.86 billion, aided by non-operating income, Chief Financial Officer Chitung Liu said. Nine-month earnings per share reached TWD 6, or $0.945 per ADS.
Record Shipments and Technology Mix
Chief Executive Officer Jason Wang said wafer shipments grew 7.3% sequentially to more than 1.2 million 12-inch-equivalent wafers, a record for the company. Revenue from 22-nanometer and 28-nanometer technologies accounted for about 35% of total revenue in the quarter, while 22-nanometer revenue alone represented 18.3% of wafer sales.
Wang said customers continued to introduce products using the company’s 22-nanometer process, including display drivers, automotive radar products and Wi-Fi integrated circuits. UMC’s blended average selling price remained firm sequentially, Liu said.
At the end of the third quarter, UMC had total equity of TWD 470 billion and cash of about TWD 142 billion. The company expects total capacity to reach about 1.33 million 12-inch-equivalent wafers in the fourth quarter, with incremental capacity primarily coming from its Fab 12i facility in Singapore.
Fourth-Quarter Outlook
For the fourth quarter, UMC forecast low-single-digit growth in wafer shipments, firm U.S. dollar-denominated average selling prices, and gross margin comparable with the third quarter. The company expects utilization to remain in the low-90% range.
Wang said specialty-technology revenue is expected to continue growing sequentially, supported in part by advanced packaging and silicon photonics programs. He said UMC is converting some existing capacity to meet near-term demand that it currently cannot fulfill.
The company maintained its 2026 cash-based capital expenditure budget at $2 billion. Separately, UMC’s board approved an additional capital expenditure budget of about $3.2 billion to accelerate expansion in Singapore and Tainan, Wang said.
2027 Pricing and AI Opportunities
Management said it expects the growth momentum established in 2026 to continue into 2027, though shipment growth will increasingly be limited by available manufacturing capacity. Wang said demand related to artificial intelligence is supporting opportunities in power management, FPGA and connectivity applications, as well as silicon photonics and advanced packaging.
UMC expects its company-wide blended average selling price to increase about 10% year over year in 2027. Wang said the anticipated improvement reflects both a more favorable pricing environment and a richer mix of products and technologies, rather than solely like-for-like price increases.
“We expect 2027 to mark a turning point in our blended ASP trajectory,” Wang said, describing a shift from historical price erosion toward an uplift beginning in the first quarter. He added that tighter capacity in selected technologies, inflationary cost increases and additional depreciation associated with investments are factors in customer pricing discussions.
Liu said higher depreciation and raw-material costs could pressure gross margin over the next two years, even as pricing and utilization support profitability. He said UMC expects to maintain a healthy EBITDA margin structure, but gross margin is unlikely to return to prior peak levels because of the heavier investment cycle.
Expansion Plans for Silicon Photonics and Packaging
UMC said its expansion plans are tied to customer commitments and product roadmaps rather than broad-based capacity additions. The company is targeting monthly capacity of approximately 18,000 wafers for silicon photonics, 22,000 wafers for deep trench capacitor and silicon capacitor products, and 20,000 wafers for thin-film lithium niobate, or TFLN, modulators.
The next phase of capacity is expected to begin ramping in late 2028 and reach planned scale by 2030. Wang said silicon photonics capacity will be centered in Singapore, silicon capacitor production in Tainan, and TFLN production in UMC’s 8-inch operations.
Wang said UMC’s 12-inch silicon photonics platform supports 1.6T optical applications, while its 8-inch TFLN platform has completed 1.6T system validation. The company is also developing technology for future 3.2T applications. Its discrete embedded deep trench capacitor solution for mobile devices is scheduled to enter mass production in the current quarter, while an AI and server-oriented solution has completed tape-out and functional verification, he said.
UMC estimated AI-related revenue at close to $300 million in 2026 and said it expects AI exposure to exceed one-quarter of total company revenue within three years. Management said the newer silicon photonics and advanced packaging businesses are expected to be accretive to the company’s existing financial model as they ramp.
About United Microelectronics (NYSE:UMC)
United Microelectronics Corp. (NYSE:UMC) is a Taiwan-based semiconductor foundry that manufactures integrated circuits for other companies. As a pure-play foundry, UMC focuses on producing chips designed by customers rather than marketing its own branded semiconductor products.
The company provides wafer fabrication services across a range of process technologies, with particular expertise in specialty applications such as display driver ICs, automotive semiconductors, connectivity products, image sensors, power management components and embedded memory.
