United Microelectronics jumps 4% to a new high, with domestic institutional investors working together to absorb the decline in US stock ADRs

Stock Price Gaps Up, Chip Market Signals Strong Bullish Sentiment

United Microelectronics Corporation (2303) demonstrated strong momentum today, opening at NT$54.4 in the morning and quickly moving higher, with the intraday high reaching NT$56.5. It ultimately closed at NT$55.1, a daily increase of 4.36% (+NT$2.3). More notably, trading volume surged significantly to over 300,000 contracts, with total transaction value around NT$17.007 billion. This explosive increase in volume reflects a major shift in market chips, with bullish forces regaining dominance.

After experiencing high-level oscillations and a volume washout yesterday, today’s gap-up indicates that after a round of shakeout, confident investors have completed their low-price positioning, pushing the stock higher. Especially considering that U.S. ADRs of United Microelectronics fell 4.26% last night, the main stock actually rose, which demonstrates the strong buying power of domestic funds and institutional investors, fully absorbing the impact of foreign sell-offs.

Mature Process Demand Fully Rebounds, Revaluation Rally Begins

United Microelectronics has performed remarkably this year, driven by clear underlying factors. First, demand for mature processes has fully recovered. Market data shows that by early 2026, wafer foundry capacity utilization for mature processes has significantly increased. As inventory destocking of automotive and industrial control chips approaches its end, coupled with rush orders, UMC maintains a positive outlook for full-year recovery, fueling a market revaluation.

Revenue figures also support the upward trend. UMC’s full-year 2025 consolidated revenue reached NT$237.553 billion, up 2.26% year-over-year, setting a new historical second-high record. Notably, December last year’s revenue was steady and better than expected, laying a solid foundation for the 2026 “red envelope” rally and inspiring investors’ imagination for the future.

Silicon Photonics Theme Boosts, Traditional Foundries Ride AI Wave

In addition to fundamentals, UMC has recently actively deployed silicon photonics (CPO) technology and expanded next-generation connectivity capabilities through licensing, marking a significant thematic shift. Originally positioned as a traditional mature process foundry, UMC has now successfully caught the AI edge computing and high-performance computing (HPC) wave, attracting substantial thematic capital and becoming a key driver of stock price appreciation.

Low P/E Ratio Sparks Short-term Rebound, Funds Shift to Defensive Stocks

With TSMC’s stock price frequently hitting new highs, market funds are beginning to flow into low-base, low P/E value stocks. UMC’s current P/E ratio is about 17 times, well below the industry average, and it offers an expected dividend yield of over 5%, making it highly defensive and with room for a rebound for institutional funds. This is the main reason for recent capital inflows.

Technical Warning: Rapid Short-term Gains, Key Support Must Be Watched

However, technical signals also warrant caution. UMC’s trading volume this week has repeatedly hit record highs, with extremely active chip turnover. Although the trend of recovering mature processes is established, the stock has surged too quickly in just a few days, increasing short-term profit-taking pressure among investors and funds.

Analysts especially remind that NT$52 is the most critical support level. If the stock can hold steady at this level, it will have the momentum to challenge previous highs; conversely, if it breaks below this support, there is a risk of a pullback. Investors should pay attention to the impact of U.S. ADR fluctuations, competitive pressure on mature process pricing, and the risk of a short-term pullback if the stock cannot effectively break through NT$58.4 with increased volume.