UMC(US:UMC) Huachuang Securities·2024-08-09 09:31Investment Rating - The report assigns a positive investment rating to UMC, indicating expectations of outperforming the benchmark index by more than 20% in the next six months [52]. Core Insights - UMC's Q2 2024 revenue reached NT$56.799 billion, reflecting a quarter-over-quarter increase of 3.97% and a year-over-year increase of 0.89% [3][8]. - The gross margin for Q2 2024 was 35.2%, up 4.3 percentage points quarter-over-quarter and 17.0 percentage points year-over-year [3][10]. - The operating profit margin was 24.5%, showing a quarter-over-quarter increase of 3.1 percentage points and a year-over-year increase of 5.4 percentage points [3][10]. - UMC expects wafer shipments to grow in the low single digits in Q3 2024, with average selling prices remaining strong and gross margins projected between 30-40% [3][21]. Summary by Sections Overall Performance - UMC achieved revenue of NT$56.799 billion in Q2 2024, with a gross margin of 35.2% and an operating profit margin of 24.5% [3][8][10]. Revenue Structure (Q1 2024 to Q2 2024) - Process Technology Breakdown: - 14nm and below: 0% - 22/28nm: 33% - 40nm: 12% - 65nm: 15% - 90nm: 12% - Above 90nm: 28% [3][19]. - Geographical Breakdown: - North America: 25% - Asia: 64% - Europe: 7% - Japan: 4% [11]. - Customer Type Breakdown: - Fabless: 87% - IDM: 13% [13]. - End Market Breakdown: - Communication: 39% - Computing: 15% - Consumer: 31% [16]. Q3 2024 Performance Guidance - UMC anticipates low single-digit growth in wafer shipments for Q3 2024, with a capacity utilization rate around 60% and a capital expenditure budget of USD 3.3 billion for 2024 [3][21].