United Microelectronics: 3 Key Takeaways for Long-Term Investors
Key Points
UMC anticipates a 10% year-over-year increase in blended average selling prices for 2027.
Third-quarter wafer shipments grew 7.3% sequentially to 1.2 million units.
Artificial intelligence revenue will exceed 25% of sales within three years.
On its third-quarter 2026 earnings call, held on Oct. 28, 2026, United Microelectronics (NYSE:UMC) announced an additional $3.2 billion capital expenditure budget to accelerate facility expansion. For long-term investors, expanding production capacity for specialized semiconductor nodes positions the business to capture growing artificial intelligence demand.
Three things management said stand out.
1. Blended Average Selling Prices Expected to Rise 10% in 2027
Customer demand is accelerating while manufacturing capacity stays tight across key production nodes. Higher value per wafer and an improved technology mix will drive higher average selling prices (ASP, the average revenue earned per manufactured wafer).
Importantly, we expect 2027 to mark a turning point in our blended ASP trajectory, moving from an environment of ASP erosion toward a meaningful positive uplift beginning in the first quarter.
-- Jason Wang, Chief Executive Officer
2. Board Approves $3.2 Billion in Additional Capital Expenditures
Customer qualifications for silicon photonics (optical networking technology using light on silicon) and advanced packaging (methods for connecting multiple semiconductor dies) are moving faster than management expected. The company is directing capital expenditure (CapEx, money spent on physical infrastructure) toward facilities in Singapore and Taiwan to meet customer commitments.
We are pleased to announce our board of directors today approved an additional capital expenditure budget of approximately $3.2 billion, which will enable us to accelerate our expansion schedule as we continue to align with customers on their product roadmap and requirements.
-- Jason Wang, Chief Executive Officer
3. Artificial Intelligence Sales Will Exceed 25% of Revenue Within Three Years
Demand for specialized power management and optical connectivity chips is rising alongside next-generation server architectures. Management projects that artificial intelligence (AI, computer systems performing complex tasks) exposure will expand significantly from its current $300 million base.
Our AI related revenue, it is close to $300 million in 2026, but looking ahead in three years, we expect our AI exposure will probably exceed a quarter of our revenue.
-- Jason Wang, Chief Executive Officer
Looking Ahead
Factory utilization reached 92% as core node demand remained steady. The company relies on its specialized 22-nanometer nodes to win customer commitments. Management is watching higher depreciation costs and rising raw material expenses.
For gross margins for next two years at least, depreciation, along with the rising raw material cost, is going to put pressures on our overall financial gross margin.
-- Chitung Liu, Chief Financial Officer
Targeted investments in optical connectivity position United Microelectronics to expand its manufacturing share among leading chip designers.
While 2026 growth was driven primarily by volume and utilization, we expect 2027 to become increasingly value-driven, with higher value per wafer and differentiated technology, and contribute more to UMC revenue growth and long-term earning potential.
-- Jason Wang, Chief Executive Officer
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