Core Viewpoint - UMC's Q2 financial results showed a revenue of $2.01 billion, a 14.9% year-over-year increase, but fell short of market expectations [1] - The company's earnings per American Depositary Share (EPADS) was $0.12, significantly below the expected $0.89 [1] - UMC's net profit attributable to shareholders was approximately NT$8.9 billion (around $304 million) [1] Financial Performance - UMC maintained a gross margin of 28.7% and an operating margin of 18.4%, indicating strong cost control [1] - The revenue contribution from the 22/28nm process reached a record high of 40% [1] - Wafer shipments increased by 6.2% quarter-over-quarter, with capacity utilization rising from 69% to 76% [1] Industry Positioning - UMC focuses on a differentiated strategy in the mature process technology, particularly the 22/28nm nodes, which are seen as key for long-term competitiveness [2] - The company is solidifying its market share in mature processes through specialized applications like OLED driver ICs and RF chips [2] Market Challenges - UMC's management highlighted two main risks: currency fluctuations, particularly the appreciation of the New Taiwan Dollar, which could compress revenue margins [3] - The uncertainty in the supply chain due to U.S. tariff adjustments is prompting UMC to negotiate with clients for production relocation and to expedite the establishment of a new facility in Singapore [3] Future Outlook - For Q3, UMC expects low single-digit growth in wafer shipments, stable dollar pricing, and a capacity utilization rate around 70% [4] - The company plans to invest $1.8 billion in capital expenditures in 2025, focusing on expanding the Singapore facility and developing 12nm technology in collaboration with Intel [4] - The new Singapore facility is expected to begin production in early 2026, enhancing supply chain resilience and meeting diverse geographic customer needs [4] Summary - UMC's Q2 results reflect solid competitiveness in mature processes, with a 40% revenue share from the 22/28nm segment [5] - The semiconductor industry is recovering due to demand from AI and automotive electronics, but geopolitical issues and reliance on high-end equipment remain challenges [5] - UMC's stock price fell by 1.54% to $7.01 following the disappointing Q2 financial performance [5]