United Microelectronics Corp (UMC, Financial) has experienced a significant uptick in its stock price, with an 8.89% gain over the past week and an impressive 23.23% gain over the past three months. The company's market capitalization now stands at $21.59 billion, with a current stock price of $8.64. According to GuruFocus's valuation metrics, UMC is currently fairly valued, with a GF Value of $7.88. This is a slight decrease from the past GF Value of $8.33, which indicated the stock was modestly undervalued three months ago. The recent price changes reflect a positive market sentiment towards UMC's performance and future prospects.
Understanding United Microelectronics Corp
Founded in 1980, United Microelectronics Corp is a titan in the semiconductor industry, holding the title of the world's third-largest dedicated chip foundry. With a 7% market share in 2022, UMC operates behind industry leaders TSMC and GlobalFoundries. The company's global operations span across 12 fabs located in Taiwan, Mainland China, Japan, and Singapore, and it maintains sales offices in Europe, the U.S., and South Korea. UMC's diverse customer base includes prominent names such as Texas Instruments, MediaTek, Qualcomm, Broadcom, Xilinx, and Realtek. The company's product range is vast, catering to sectors like communications, display, memory, and automotive. UMC's workforce is approximately 20,000 strong, reflecting its substantial operational scale and reach within the semiconductor sector.
Profitability Insights
UMC's financial health is robust, as indicated by its Profitability Rank of 8/10. The company's operating margin stands at an impressive 29.13%, outperforming 93.52% of 957 companies in the industry. Its return on equity (ROE) is 20.72%, higher than 87.95% of its peers, while the return on assets (ROA) at 12.83% and return on invested capital (ROIC) at 17.02% also showcase UMC's efficiency in generating profits from its investments. Notably, UMC has maintained profitability for the past 10 years, a testament to its consistent performance and strategic business operations.
Growth Trajectory
UMC's growth narrative is equally compelling, with a Growth Rank of 9/10. The company's 3-year revenue growth rate per share is 24.90%, surpassing 76.6% of 876 companies in the same industry. Over a 5-year period, the revenue growth rate per share is 15.10%, better than 71.89% of its competitors. While the estimated total revenue growth rate for the next 3 to 5 years is 6.76%, the 3-year EPS without NRI growth rate is an outstanding 125.50%, and the 5-year EPS without NRI growth rate is 70.00%. However, the estimated EPS growth rate for the next 3 to 5 years is projected at -6.22%, which may indicate some caution for future earnings potential.
Notable Shareholders
UMC's shareholder base includes several prominent investors. Ken Fisher (Trades, Portfolio) holds the largest stake among the top three, with 7,086,897 shares, representing 0.28% of the company. Jim Simons (Trades, Portfolio) follows with 3,978,550 shares, accounting for 0.16%, and Jeremy Grantham (Trades, Portfolio) holds 470,900 shares, making up 0.02% of UMC's shares. These significant shareholders reflect confidence in UMC's market position and future growth prospects.
Competitive Landscape
In comparison to its competitors, UMC maintains a strong market position. ASE Technology Holding Co Ltd (TPE:3711, Financial) has a market capitalization of $18.48 billion, Novatek Microelectronics Corp (TPE:3034, Financial) is valued at $10.05 billion, and GlobalWafers Co Ltd (ROCO:6488, Financial) stands at $8.69 billion. UMC's market cap of $21.59 billion indicates its competitive edge and leadership within the semiconductor industry.
Conclusion
In summary, United Microelectronics Corp's recent stock performance and valuation reflect a company that is both profitable and growing. The stock's 23.23% gain over the past three months and its current fair valuation suggest that investors are recognizing UMC's strong market position and potential for continued success. The company's profitability and growth metrics, combined with the confidence shown by significant shareholders, position UMC favorably within the semiconductor industry. When compared to its competitors, UMC's market capitalization underscores its status as a leading player in the global semiconductor market.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
