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Union Semiconductor (Hefei) Co (SHSE:688403) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Union Semiconductor (Hefei) Co had a gross margin of 14.50% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Union Semiconductor (Hefei) Co Gross Margin % Related Terms
Union Semiconductor (Hefei) Co Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Union Semiconductor (Hefei) Co Gross Margin % Chart
SHSE:688403 vs NVDA, AVGO, MU: Gross Margin % Comparison
For the Semiconductors subindustry, Union Semiconductor (Hefei) Co's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Union Semiconductor (Hefei) Co Gross Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Union Semiconductor (Hefei) Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Union Semiconductor (Hefei) Co's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Union Semiconductor (Hefei) Co (SHSE:688403) has a Gross Margin % of 14.50% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Union Semiconductor (Hefei) Co and its competitors. This is 33% below median its historical median of 21.77. Over the past decade, Union Semiconductor (Hefei) Co's Gross Margin % has ranged from 3.67 to 29.62. According to the industry distribution chart, Union Semiconductor (Hefei) Co ranks #693 out of 1010 companies in the Semiconductors industry, placing it in the top 68.6%.
Is Union Semiconductor (Hefei) Co's Gross Margin % too high?
Union Semiconductor (Hefei) Co's current Gross Margin % of 14.50% is 33% below median its 10-year median of 21.77. Over the past 10 years, this metric has ranged from a low of 3.67 to a high of 29.62. The Semiconductors industry median Gross Margin % is 29.61. Union Semiconductor (Hefei) Co's value of 14.50% is 51% below this industry median. Based on the distribution chart, Union Semiconductor (Hefei) Co ranks #693 out of 1010 companies in the Semiconductors industry, which is below the industry midpoint. Overall, Union Semiconductor (Hefei) Co has a GF Score™ of 45/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Union Semiconductor (Hefei) Co's Gross Margin % compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Union Semiconductor (Hefei) Co ranks #693 out of 1010 companies for Gross Margin %. This places Union Semiconductor (Hefei) Co in the lower half of its industry. The industry median Gross Margin % is 29.61. Union Semiconductor (Hefei) Co's value of 14.50% is 51% below this benchmark. Historically, Union Semiconductor (Hefei) Co's own Gross Margin % has ranged from 3.67 to 29.62 over the past decade. While the company's 10-year median is 21.77 vs. the industry median of 29.61, Union Semiconductor (Hefei) Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,010 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Union Semiconductor (Hefei) Co's current Gross Margin % of 14.50% is 51% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Union Semiconductor (Hefei) Co and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Union Semiconductor (Hefei) Co's current Gross Margin % is 14.50%, which is 33% below median its own 10-year median of 21.77. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Union Semiconductor (Hefei) Co stock overvalued right now?
Based on GuruFocus' analysis, Union Semiconductor (Hefei) Co (SHSE:688403) is currently considered Significantly Overvalued. The stock's GF Value™ is ¥11.10, compared to a current price of ¥30.07 — trading 170.9% above its estimated fair value. The current Gross Margin % is 14.50%, which is 33% below median its 10-year median of 21.77 and 51% below the Semiconductors industry median of 29.61. Union Semiconductor (Hefei) Co's overall GF Score™ is 45/100 with 10 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Union Semiconductor (Hefei) Co (SHSE:688403), the current Gross Margin % is 14.50% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Union Semiconductor (Hefei) Co (SHSE:688403) Overvalued in 2026?
Based on GuruFocus' analysis, Union Semiconductor (Hefei) Co stock appears to be overvalued.
The current stock price of ¥30.07 is trading 170.9% above its estimated GF Value™ of ¥11.10.
GuruFocus considers Union Semiconductor (Hefei) Co to be Significantly Overvalued.
Key valuation signals for SHSE:688403:
Gross Margin %: 14.50% (33% below median its 10-year median of 21.77)
GF Value™: ¥11.10 vs. price of ¥30.07 (170.9% above fair value)
Industry Position: 51% below the Semiconductors median (#693 of 1010)
No single metric tells the full story. See the SHSE:688403 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Union Semiconductor (Hefei) Co Business Description
Union Semiconductor (Hefei) Co Ltd is a high-end packaging and testing service provider for integrated circuits. It focuses on the field of display driver chips. The company's main business is the front-end gold bumping manufacturing as the core, and integrates wafer testing, back-end chip-on-glass, and chip-on-film links to form a full range of display driver chips.
45GF Score
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