United Microelectronics Corp. (UMC) stock edged higher Wednesday after the Taiwan-based semiconductor foundry reported second-quarter 2026 results that beat Wall Street expectations and raised its full-year capital spending outlook.
Revenue rose 17% year over year to 68.73 billion New Taiwan dollars ($2.18 billion), topping the analyst consensus estimate of $2.06 billion. Revenue increased 12.6% sequentially.
Earnings came in at 54 cents per American depositary share, exceeding the analyst consensus estimate of 15 cents.
United Microelectronics Margins, Utilization Improve
Gross margin expanded to 32.5% from 28.7% a year earlier, while operating margin increased to 21.8% from 18.4%.
Capacity utilization improved to 85%, up from 79% in the prior quarter and 76% a year earlier.
The company's 22nm and 28nm process technologies accounted for 37% of wafer revenue, up from 34% in the first quarter but down from 40% a year ago. Revenue from 40nm technology declined to 15% from 18% in the prior quarter and was unchanged from a year earlier.
Capital expenditures totaled $308 million during the quarter.
AI Expansion Plans
UMC's board approved a phased capacity expansion plan that includes adding cleanroom capacity at its Singapore Phase 4 facility and constructing a new fab shell at its Tainan campus in Taiwan.
The Singapore expansion will include additional tools for silicon photonics production, while the Taiwan project is designed to support future Phase 7 and Phase 8 fabs and expand advanced packaging capacity.
Chairman Stan Hung said generative AI is increasing demand for higher performance, greater bandwidth and stronger system integration, adding that the phased approach provides flexibility while maintaining capital discipline.
Chief Executive Officer Jason Wang said the company delivered its first mass-produced 12-inch photonic integrated circuits during the quarter, demonstrating its silicon photonics manufacturing capability ahead of a broader platform launch planned for 2027.
United Microelectronics Outlook
For the third quarter, UMC expects wafer shipments to increase by high-single digits sequentially, average selling prices in U.S. dollars to remain stable, gross margin to reach the mid-30% range and capacity utilization to remain above 90%.
The company also raised its 2026 capital expenditure forecast to $2 billion from $1.5 billion.
Wang said demand is expected to remain stable across the computer, communication and consumer markets, while stronger demand for power management ICs, sensors and microcontrollers is supporting a recovery in the company's 8-inch wafer business.
UMC Price Action: United Microelectronics shares were up 0.29% at $17.42 at the time of publication on Wednesday, according to market data.
