Taiwanese chipmaker United Microelectronics (UMC) stated on Wednesday that despite facing headwinds such as memory chip shortages and the impact of conflict in the Middle East, market demand has shown resilience, and the company will increase prices in the second half of this year. UMC reported first-quarter revenue of NT$61.04 billion (approximately $1.93 billion), exceeding expectations by $10 million and representing a 5.5% year-over-year increase. Net profit reached NT$16.17 billion, surging 108% compared to the same period last year.
In its earnings statement, UMC noted that entering the second quarter, demand in the communications sector is recovering, complemented by steady demand from the computer, consumer electronics, and industrial markets. The company anticipates wafer shipments will remain robust. Chief Executive Officer Jason Wang stated, "While the current memory chip shortage and ongoing conflicts in the Middle East indeed present headwinds and market volatility, UMC still expects market demand to maintain its resilience."
In recent weeks, UMC has notified customers of a price increase, indicating an adjustment to wafer prices scheduled for the second half of 2026. The company stated that demand from the communications, industrial, consumer electronics, and AI-related sectors remains solid. This is driving a continued tightening of the overall capacity environment for the corresponding product mix, with conditions becoming increasingly constrained. To support customer demand, the company is continuously enhancing manufacturing efficiency and investing in technology and capacity to ensure a stable and high-quality wafer supply. Concurrently, rising costs for raw materials, energy, and logistics necessitate a re-evaluation of the pricing structure.
Chief Financial Officer Chitung Liu said during the earnings call, "We will implement wafer price adjustments in the second half of 2026 to establish a more favorable pricing foundation for the upcoming year 2027. This pricing reflects both the evolution of the supply-demand environment and the continued investment required to support our customers' growth." Industry analysis suggests this move not only indicates UMC's confidence in its order book and capacity utilization for the second half of the year but also signals that pricing trends for mature and specialty processes are continuing to strengthen, fueled by robust demand from diverse applications like AI.
Unlike TSMC, the world's largest foundry, which is aggressively investing in the most advanced 2-nanometer and 1-nanometer technologies to power AI applications, United Microelectronics focuses on more mature process nodes. Year-to-date, UMC's stock price has accumulated a gain of 48%. At the time of writing, the stock was up over 7% in pre-market trading.