August 18, 2021
According to the Economic Daily News, the supply chain reported that UMC recently issued another notice to customers to increase the foundry price. In November, the average price increase was 10%, and the increase in some processes was up to 15%. This is the fourth time that UMC has raised its quotation this year. With the help of price increases, industry insiders are optimistic that UMC's revenue, gross profit margin, and net profit after tax will continue to rise.
Regarding the price increase news, UMC said yesterday (16) that it would not comment on market rumors. UMC’s stock price fell 0.5 yuan (NTD, the same below) yesterday to close at 57.1 yuan. Foreign investors bought more than 18,000 contracts and ended the two consecutive sales.
According to industry sources, since the beginning of this year, UMC has increased its quotations at the beginning of the year, April, and July respectively. Now it can increase its prices for the fourth time, reflecting the shortage of production capacity of the foundry mature process and the market’s original expectations. It is estimated that this year After UMC’s current price increase, the cumulative increase has exceeded 50%, which will be fully reflected in profit.
According to industry analysis, under the limited expansion of mature process production capacity, manufacturers such as UMC began to report price increases in the third quarter of last year, and this year is showing a trend of "quarter to quarter increase".
According to the supply chain, UMC will raise prices again in November, which will increase 10% to 15% for some driver IC customers, and some consumer IC plants will be increased by 5% to 10%; some special high-voltage processes will increase the price even more. High, with an average increase of more than 10%.
UMC can be regarded as the big winner of this wave of foundry mature process craze. Driven by full capacity and price increases, UMC’s gross profit margin in the second quarter broke through the 30% mark, reaching 31.3%, a record high in ten and a half years; after-tax net profit was 11.943 billion yuan, a quarterly increase of 14.5% and an annual increase of 78.7%. It is equivalent to earning more than 130 million yuan a day, and the net profit per share is 0.98 yuan, which is the best since the fourth quarter of 2000 and better than financial estimates; the net profit per share for the first half of the year was 1.83 yuan.
UMC's operations continued to be hot this quarter, with revenue of 18.37 billion yuan in July, a record high; revenue in the first seven months exceeded the 100 billion yuan mark, reaching 116.37 billion yuan, an annual increase of 13.9%. UMC expects that wafer shipments this quarter will increase by 1% to 2%, and the average selling price of products will increase by 6%, and gross profit margin will reach 35%.
Industry insiders estimate that under the optimization of its product portfolio, UMC’s revenue in the third quarter will increase by about 7% to 8% on a quarterly basis. It has the opportunity to rewrite a single-season record high. The continued price increase will help UMC’s revenue and gross revenue. Interest rates and net profit after tax continued to rise.
UMC emphasized that the current order visibility is until May 2022, and the average product price (ASP) increase this year has been revised for the second time by 10% to 13%. It is expected that structural demand will continue and will continue to promote ASP increase.
According to industry observations, since September last year, the quotations of foundries for mature processes have been increasing. Among them, UMC first reported in September last year that some of the quotations for the 0.18 micron process were increased due to the influx of urgent orders.