Taiwan-based United Microelectronics Corp (NYSE:UMC), a prominent global semiconductor foundry, reported fiscal first-quarter results on Wednesday.

For the quarter, the company reported revenue of $1.93 billion (61.04 billion New Taiwanese dollars), up 5.5% year-on-year.

The figure marginally missed the analyst consensus estimate of $1.97 billion. On a sequential basis, revenue declined by 1.2%.

Earnings per American Depositary Share (ADS) came in at 20.4 cents, also topping the analyst consensus of 12 cents.

Advanced Node Contribution and Margins

The company reported solid progress in its advanced process nodes, with 22nm and 28nm technologies contributing 34% of wafer revenue, down from 37% year-over-year and 36% in the prior quarter.

Revenue from 40nm technology rose to 18% from 16% a year earlier, and 17% in the fourth quarter of 2025.

Capacity utilization also strengthened, improving to 79% from 69% a year ago and 78% in the previous quarter.

The gross margin rose to 29.2% from 26.7% in the same period last year. The operating margin for the quarter was 18.50%, up from 16.90% in the prior year quarter.

Capital expenditures for the quarter totaled $416 million.

Executive Commentary

UMC CEO Jason Wang said first-quarter wafer shipments rose 2.7% quarter-on-quarter, driven by strong consumer demand, which lifted utilization to 79%.

He noted that, despite a decline in average selling prices, driven in part by higher 8-inch shipments, gross margin remained steady at 29.2%.

Wang added that demand for 22nm logic and specialty processes continued to build, with 22nm revenue reaching a record and accounting for 14% of total revenue. He said more than 50 customers are expected to complete tape-outs on 22nm platforms by year-end across applications such as display drivers, networking chips, and microcontrollers.

He also highlighted ongoing investments beyond 22nm, including a 12nm collaboration with Intel to maintain technology continuity and U.S.-based manufacturing, as well as new initiatives such as a partnership to deploy thin-film lithium niobate photonics for AI infrastructure.

Looking ahead, Wang said UMC expects strong shipment growth in the second quarter across both 8-inch and 12-inch wafers, supported by a rebound in the communications market and steady demand from the computer, consumer, and industrial markets.

He acknowledged headwinds from supply shortages in memory and geopolitical tensions in the Middle East. However, he said the company still sees resilient demand and will continue to manage operations carefully amid changing market conditions.

On sustainability, Wang said UMC earned a top 1% ranking in S&P Global's 2026 Sustainability Yearbook and is advancing decarbonization efforts through a memorandum of understanding with Infineon.

He emphasized that collaboration across the supply chain is critical to reducing Scope 3 emissions as the company works toward its goal of achieving net-zero emissions by 2050.

Outlook

For the second quarter of 2026, UMC expects wafer shipments to increase by high single-digits quarter-over-quarter (Q/Q) and average selling prices in U.S. dollars to increase by low single-digits Q/Q.

The company expects a quarterly gross profit margin of approximately 30%.

It expects the quarterly capacity utilization to remain in the low-80% range.

The company reiterated capital expenditure of $1.5 billion for 2026.

UMC Price Action: United Microelectronics shares were up 7.24% at $12.50 during premarket trading on Wednesday. The stock is approaching its 52-week high of $12.82, according to Benzinga Pro data.

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