Semiconductor Foundry UMC Reports Q2 Earnings Beat, Strong Q3 Demand Expected in Communication and Computing

United Microelectronics Corp UMC reported a second-quarter fiscal 2024 revenue growth of 0.9% year-on-year to $1.750 billion (NT$56.80 billion), missing the analyst consensus estimate of $1.762 billion. 

The revenue increased by 4.0% Q/Q, driven by notable demand momentum in the consumer segment.

Earnings per ADS of $0.17 beat the analyst consensus estimate of $0.15.

Revenue from 22 and 28nm was 33% of the wafer revenue driven by healthy demand for WiFi and Digital TV apps, while 40nm contribution declined to 12% of sales. 

The gross margin declined by 80 basis points Y/Y to 35.2%. Capital expenditure spending totaled $644 million in the quarter.

Outlook: UMC expects improved end-market dynamics in the third quarter, particularly in the communication and computing segments.

The company expects third-quarter wafer shipments to increase by mid-single digit % and ASP in USD to stay flat quarter-over-quarter. It also expects capacity utilization to be in the approximately 70% range. UMC expects a 2024 capex of $3.3 billion.

Price Action: UMC shares are trading higher by 8.34% at $8.05 at the last check Wednesday.

Image via Shutterstock

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