Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>United Microelectronics Corporation's (UMC) second quarter financial results for 2025 present a nuanced picture of the company's current standing and future prospects.</li>
<li>The Taiwanese semiconductor foundry recorded consolidated revenue of TWD 58.8 billion, a sequential increase of 1.6%, with wafer shipments growing by 6.3% quarter-over-quarter.</li>
<li>However, the currency appreciation of the Taiwanese dollar impacted profitability, as gross margin slightly reached 28.7%, considering a 3% foreign exchange effect.</li>
</ul>


United Microelectronics Corporation's (UMC) second quarter financial results for 2025 present a nuanced picture of the company's current standing and future prospects.
The Taiwanese semiconductor foundry recorded consolidated revenue of TWD 58.8 billion, a sequential increase of 1.6%, with wafer shipments growing by 6.3% quarter-over-quarter.
However, the currency appreciation of the Taiwanese dollar impacted profitability, as gross margin slightly reached 28.7%, considering a 3% foreign exchange effect.


United Microelectronics Corporation: Doubling Down on Specialty Tech...

Technology / Semiconductor / Internet Research

Nicolas Baratte

United Microelectronics Corp / Equity Bottom-Up

<ul>
<li>2Q25 was good QoQ: utilization up 7 pct-points, wafer shipments up 6%, US$ ASP up 8%, US$ revenue up 15% QoQ. But NT$ appreciated 13%, cancelling out the operating recovery.</li>
<li>3Q25 guidance: slow US$-revenue growth, NT$-revenue decline. FX leads to both 2Q and 3Q below Consensus by mid-teens%. Big miss despite improving operations: utilization higher, mix better, ASP higher.</li>
<li>The stock is cheap. Outlook is positive in terms of mix improvement, specialty process. But many unknowns (US tariffs, macro overall, NT$) will cloud the outlook for another 2-3 quarters. </li>
</ul>


2Q25 was good QoQ: utilization up 7 pct-points, wafer shipments up 6%, US$ ASP up 8%, US$ revenue up 15% QoQ. But NT$ appreciated 13%, cancelling out the operating recovery.
3Q25 guidance: slow US$-revenue growth, NT$-revenue decline. FX leads to both 2Q and 3Q below Consensus by mid-teens%. Big miss despite improving operations: utilization higher, mix better, ASP higher.
The stock is cheap. Outlook is positive in terms of mix improvement, specialty process. But many unknowns (US tariffs, macro overall, NT$) will cloud the outlook for another 2-3 quarters. 


UMC 2Q25: The Recovery Is Cancelled Out by NT$ Appreciation

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>3Q25 Guidance: Wafer shipments growing by a low single-digit %; Revenue: Fully exposed to NT dollar exchange rate fluctuations; ASP (in USD): remain stable; Gross margin: Approximately flat to Q2</li>
<li>Focus on increasing loading, improving mix, new tech deployment, and controlling depreciation (&lt;10% YoY after 2025) to gradually return to mid-30s GM.</li>
<li>UMC leverages specialty content (now &gt;50% of revenue) to differentiate from peers.</li>
</ul>


3Q25 Guidance: Wafer shipments growing by a low single-digit %; Revenue: Fully exposed to NT dollar exchange rate fluctuations; ASP (in USD): remain stable; Gross margin: Approximately flat to Q2
Focus on increasing loading, improving mix, new tech deployment, and controlling depreciation (&lt;10% YoY after 2025) to gradually return to mid-30s GM.
UMC leverages specialty content (now &gt;50% of revenue) to differentiate from peers.


UMC (2303.TT; UMC.US): 3Q25 Outlook Improves Slightly over 2Q25, Based on Estimated FX Assumptions.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

<ul>
<li>UMC’s renewed push into 6nm, paired with Intel’s strategic overhaul under new CEO Lip-Bu Tan, raises the likelihood of an Intel equity stake in UMC.</li>
<li>We maintain our Structural Long view on UMC and reiterate our original thesis: a deeper partnership via a stake from Intel would be transformative.</li>
<li>At 12.5x trailing PER with a net cash position, UMC remains attractively valued as a strategic asset -- especially if can essentially have its own 'Group' advanced fabs with Intel.</li>
</ul>


UMC’s renewed push into 6nm, paired with Intel’s strategic overhaul under new CEO Lip-Bu Tan, raises the likelihood of an Intel equity stake in UMC.
We maintain our Structural Long view on UMC and reiterate our original thesis: a deeper partnership via a stake from Intel would be transformative.
At 12.5x trailing PER with a net cash position, UMC remains attractively valued as a strategic asset -- especially if can essentially have its own 'Group' advanced fabs with Intel.


Our Thesis: Intel Should Take a Stake in UMC -- New Signals Reinforce the Case

<ul>
<li>
<a href="https://www.smartkarma.com/entities/united-microelectron-sp-adr" target="_blank" data-smartkarma-citation="entities:11540:1" rel="noopener">United Microelectron Sp Adr (UMC US)</a> is likely to exceed its 2Q25 guidance by 5–10%, while the outlook for 3Q25 appears somewhat gloomy, with a flat quarter-over-quarter (QoQ) performance likely.</li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> and <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> are allocating a few thousand 12” wafers at UMC, but it appears to be the end of the product cycle.  </li>
<li>
<a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, for example, has been relatively aggressive in wafer procurement in 2Q25, which could lead to a pullback in 3Q25.  </li>
</ul>



United Microelectron Sp Adr (UMC US) is likely to exceed its 2Q25 guidance by 5–10%, while the outlook for 3Q25 appears somewhat gloomy, with a flat quarter-over-quarter (QoQ) performance likely.

Qualcomm Inc (QCOM US) and NVIDIA Corp (NVDA US) are allocating a few thousand 12” wafers at UMC, but it appears to be the end of the product cycle.  

Samsung Electronics (005930 KS), for example, has been relatively aggressive in wafer procurement in 2Q25, which could lead to a pullback in 3Q25.  


UMC (2303.TT; UMC.US): Gloomy Outlook for 3Q25.

Taiwan

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

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United Microelectron Sp Adr (UMC US)

United Microelectronics Corporation: Doubling Down on Specialty Tech...

United Microelectronics Corporation's (UMC) second quarter financial results for 2025 present a nuanced picture of the company's current standing...

Baptista Research

UMC 2Q25: The Recovery Is Cancelled Out by NT$ Appreciation

2Q25 showed strong performance but NT$ appreciation offset gains. 3Q25 guidance predicts slow US$-revenue growth, NT$ decline, despite operational...

Nicolas Baratte

UMC (2303.TT; UMC.US): 3Q25 Outlook Improves Slightly over 2Q25, Based on Estimated FX Assumptions.

UMC expects slight growth in wafer shipments, stable ASP, and flat gross margin in Q3. Focus on increasing loading and new tech deployment to...

Patrick Liao

Our Thesis: Intel Should Take a Stake in UMC -- New Signals Reinforce the Case

UMC's partnership with Intel, including a possible equity stake, could be transformative and strategically valuable for both companies. Latest...

Vincent Fernando, CFA

UMC (2303.TT; UMC.US): Gloomy Outlook for 3Q25.

UMC may beat 2Q25 guidance, but 3Q25 outlook appears flat; QCOM and NVDA allocating wafers at UMC, signaling end of product cycle; Samsung...

Patrick Liao

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United Microelectronics Corporation: Doubling Down on Specialty Tech...

United Microelectronics Corporation's (UMC) second quarter financial results for 2025 present a nuanced picture of the company's current standing...

Baptista Research

UMC 2Q25: The Recovery Is Cancelled Out by NT$ Appreciation

​2Q25 showed strong performance but NT$ appreciation offset gains. 3Q25 guidance predicts slow US$-revenue growth, NT$ decline, despite operational...

Nicolas Baratte

UMC (2303.TT; UMC.US): 3Q25 Outlook Improves Slightly over 2Q25, Based on Estimated FX Assumptions.

​UMC expects slight growth in wafer shipments, stable ASP, and flat gross margin in Q3. Focus on increasing loading and new tech deployment to...

Patrick Liao

Our Thesis: Intel Should Take a Stake in UMC -- New Signals Reinforce the Case

​UMC's partnership with Intel, including a possible equity stake, could be transformative and strategically valuable for both companies. Latest...

Vincent Fernando, CFA

UMC (2303.TT; UMC.US): Gloomy Outlook for 3Q25.

UMC may beat 2Q25 guidance, but 3Q25 outlook appears flat; QCOM and NVDA allocating wafers at UMC, signaling end of product cycle; Samsung...

Patrick Liao

2Q25 showed strong performance but NT$ appreciation offset gains. 3Q25 guidance predicts slow US$-revenue growth, NT$ decline, despite operational...

UMC expects slight growth in wafer shipments, stable ASP, and flat gross margin in Q3. Focus on increasing loading and new tech deployment to...

UMC's partnership with Intel, including a possible equity stake, could be transformative and strategically valuable for both companies. Latest...