UMC Q4 Revenue Rises 4.5%, EPS NT$0.81 with Record 22nm Growth, Downgrade by BNP Paribas at $8.60 PT
United Microelectronics reported 4Q25 consolidated revenue of NT$61.81 billion, up 4.5% sequentially and 2.4% year-over-year, with gross margin of 30.7% and EPS of NT$0.81, driven by a 31% QoQ surge in 22nm revenue to a record high. BNP Paribas cut its rating to Underperform and set a $8.60 price target, implying a 24.5% downside.
1. Earnings Beat Propels UMC to New High
United Microelectronics reported quarterly earnings per share of $0.13, exceeding the consensus estimate of $0.12 by $0.01. This surprise drove trading volume to over 26.8 million shares and led the stock to its strongest level in 12 months. Revenue for the quarter reached $1.97 billion, topping analyst expectations of $1.93 billion and marking a 7.0% increase year-over-year. Sequential growth was supported by favorable foreign exchange movements and stronger wafer shipments in the 22/28 nm segment.
2. Robust Profitability Metrics Highlight Operational Strength
UMC delivered a net margin of 17.08% and achieved a return on equity of 11.18% for the period. Consolidated gross margin expanded to 30.7% in the fourth quarter, up from 29.8% in the prior quarter, reflecting improved operating leverage. Net income attributable to shareholders rose by 18.3% year-over-year to NT$10.06 billion, while earnings per ordinary share climbed to NT$0.81 from NT$0.68 in the same period last year.
3. Specialty Nodes and Capacity Investments Fuel Growth
Revenue contribution from 22 nm process technology surged by 31% quarter-on-quarter, accounting for more than 13% of total sales and underscoring rising customer adoption of advanced mixed-signal and power-management applications. UMC completed its Phase 3 expansion at the Singapore Fab 12i facility, enhancing capacity for specialty nodes. The company also advanced partnerships in the U.S. semiconductor ecosystem, including a 12 nm collaboration with a leading technology firm and a memorandum of understanding on next-generation packaging solutions.
4. Analyst Ratings and Institutional Positioning
Despite the strong results, several brokerages have revised outlooks, with one major European bank downgrading UMC to Underperform and setting a target near $8.60, reflecting concerns about near-term demand fluctuations. Institutional flows remained active: Callan Family Office increased its position by over 400%, while West Family Investments lifted holdings by 37.2%. Hedge funds now hold approximately 5.05% of shares, and one analyst has maintained a Strong Buy rating, two hold ratings, and three have Sell ratings, resulting in a consensus recommendation of Reduce.