UMC(US:UMC) Hua Er Jie Jian Wen·2025-06-20 12:13Core Viewpoint - UMC has gained investor favor due to its high dividend yield exceeding 6%, contrasting with TSMC's less than 2% yield, leading to a significant inflow of passive funds into UMC [1][4]. Group 1: Stock Performance - UMC's stock price has increased by 10% this year, while TSMC's has decreased by 1% [1]. - UMC is a key holding in Taiwan's top three high-dividend ETFs, which have attracted approximately $10 billion in inflows this year, making them some of the best-performing stock ETFs in the Asia-Pacific region [1][4]. Group 2: Market Dynamics - The high-dividend ETF market in Taiwan has over $44 billion in assets under management, significantly influencing capital allocation in the Taiwanese stock market [4]. - UMC's appeal to conservative investors is bolstered by its low valuation and high liquidity, along with its partnership with Intel, which adds further investment value [4]. Group 3: Sustainability of Performance - Despite UMC's strong performance, indicators suggest that its upward trend may not be sustainable, with short-selling ratios reaching about 9%, indicating market concerns over its valuation [6]. - UMC's stock price has surpassed the average 12-month target price set by analysts, suggesting that market expectations may be fully priced in [6].