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

Equity Bottom-Up

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>UMC Misses 4Q24 Expectations -- Gross Margin Dips with Flat QoQ Revenue</li>
<li>UMC Guides for 40% Reduction in Capex Budget -- We Believe Signals Strategic Shift to Less Capex Intensive Business Model</li>
<li>Intel 12nm Partnership Remains on Track and is Key Business Model for Future; UMC Sees Improvement in Consumer Electronics Industry Inventories</li>
</ul>


UMC Misses 4Q24 Expectations -- Gross Margin Dips with Flat QoQ Revenue
UMC Guides for 40% Reduction in Capex Budget -- We Believe Signals Strategic Shift to Less Capex Intensive Business Model
Intel 12nm Partnership Remains on Track and is Key Business Model for Future; UMC Sees Improvement in Consumer Electronics Industry Inventories


United Microelectronics 4Q24 Results: Intel Partnership On Track and Is A Key Model for UMC's Future

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>Shipment: expected to decrease by mid-single-digits QoQ ASP: Remains flat in USD/NTD appreciation may lead to decline for 1Q25 sales. </li>
<li>UMC's addressable market in 2025 will grow in the low-single-digits YoY, driven by a moderate recovery in consumer applications in mature nodes.  </li>
<li>1Q25 consumer will grow QoQ thanks to higher DTV, DDI, Wi-Fi, and STB demand. Other applications will decline QoQ.</li>
</ul>


Shipment: expected to decrease by mid-single-digits QoQ ASP: Remains flat in USD/NTD appreciation may lead to decline for 1Q25 sales. 
UMC's addressable market in 2025 will grow in the low-single-digits YoY, driven by a moderate recovery in consumer applications in mature nodes.  
1Q25 consumer will grow QoQ thanks to higher DTV, DDI, Wi-Fi, and STB demand. Other applications will decline QoQ.


UMC (2303.TT; UMC.US): Earthquake Alters 1Q25 Outlook; 2025 Growth Expected to Low Single Digits YoY

<ul>
<li>In 1Q25, there was a further improvement to -5% QoQ for UMC, and its gross margin is at around 26-28%.</li>
<li>The extra improvement is from Novatek Microelectronics Corp (3034 TT), which has also received an additional order from Vivo.   </li>
<li>The outlook remains unclear as Samsung Electronics (005930 KS) is facing uncertainties in 2025.</li>
</ul>


In 1Q25, there was a further improvement to -5% QoQ for UMC, and its gross margin is at around 26-28%.
The extra improvement is from Novatek Microelectronics Corp (3034 TT), which has also received an additional order from Vivo.   
The outlook remains unclear as Samsung Electronics (005930 KS) is facing uncertainties in 2025.


UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

United Microelectronics Corp / Equity Bottom-Up

<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> experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.</li>
<li>We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  </li>
<li>It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.</li>
</ul>



United Microelectron Sp Adr (UMC US) experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.
We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  
It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.


UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

Technology / Semiconductor / Internet Research

Nicolas Baratte

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>The Semiconductor industry associations report re-accelerating Semi sales, and increase 2024-25 forecasts. This is due to higher AI / Accelerators, HBM Memory but the rest of the market remains sluggish</li>
<li>TSMC remains on its high growth plateau at 34% YoY, driven by AI and 3nm. UMC remains on a sluggish recovery at 7% YoY.</li>
<li>AMD, Nvidia, SK Hynix, TSMC: stocks are not expensive on PE relative to earnings growth. Non-Consensus: we think AMD and SK Hynix are worth a serious look.</li>
</ul>


The Semiconductor industry associations report re-accelerating Semi sales, and increase 2024-25 forecasts. This is due to higher AI / Accelerators, HBM Memory but the rest of the market remains sluggish
TSMC remains on its high growth plateau at 34% YoY, driven by AI and 3nm. UMC remains on a sluggish recovery at 7% YoY.
AMD, Nvidia, SK Hynix, TSMC: stocks are not expensive on PE relative to earnings growth. Non-Consensus: we think AMD and SK Hynix are worth a serious look.


Semiconductor Sales Reaccelerating, AI Accelerators Accelerating:  AMD, AVGO, NVDA, SK Hynix, TSMC

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 Microelectronics Corp (2303 TT)

United Microelectronics 4Q24 Results: Intel Partnership On Track and Is A Key Model for UMC's Future

UMC's 4Q24 results disappoint with lower gross margin and flat revenue. Plans to reduce capex by 40% hint at shift to less capital-intensive...

Vincent Fernando, CFA

UMC (2303.TT; UMC.US): Earthquake Alters 1Q25 Outlook; 2025 Growth Expected to Low Single Digits YoY

UMC expects decrease in shipments and flat ASP for 1Q25, but anticipates growth in consumer applications for the quarter.

Patrick Liao

UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Patrick Liao

UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

UMC expects a 5-10% QoQ decline in 1Q25, with a modest 5% YoY decline for 2025. Taiwanese Fabless companies may boost 1Q25 demand, while mature...

Patrick Liao

Semiconductor Sales Reaccelerating, AI Accelerators Accelerating: AMD, AVGO, NVDA, SK Hynix, TSMC

Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...

Nicolas Baratte

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United Microelectronics 4Q24 Results: Intel Partnership On Track and Is A Key Model for UMC's Future

​UMC's 4Q24 results disappoint with lower gross margin and flat revenue. Plans to reduce capex by 40% hint at shift to less capital-intensive...

Vincent Fernando, CFA

UMC (2303.TT; UMC.US): Earthquake Alters 1Q25 Outlook; 2025 Growth Expected to Low Single Digits YoY

​UMC expects decrease in shipments and flat ASP for 1Q25, but anticipates growth in consumer applications for the quarter.

Patrick Liao

UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

​UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Patrick Liao

UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

UMC expects a 5-10% QoQ decline in 1Q25, with a modest 5% YoY decline for 2025. Taiwanese Fabless companies may boost 1Q25 demand, while mature...

Patrick Liao

Semiconductor Sales Reaccelerating, AI Accelerators Accelerating: AMD, AVGO, NVDA, SK Hynix, TSMC

​Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...

Nicolas Baratte

UMC's 4Q24 results disappoint with lower gross margin and flat revenue. Plans to reduce capex by 40% hint at shift to less capital-intensive...

UMC expects decrease in shipments and flat ASP for 1Q25, but anticipates growth in consumer applications for the quarter.

UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...