UMC: Mature-node process, another 10% increase

Demand for mature process nodes remains strong, and wafer foundry UMC's capacity utilization rate has surpassed 90%. UMC will continue to raise prices. UMC CEO Wang Shih said yesterday at the earnings call that the blended average selling price is expected to increase by about 10% year on year in 2027, and the company will continue to push aggressively into AI business, with AI-related revenue expected to account for 25% over the next three years. Silicon photonics and advanced packaging will become new growth drivers. Wang Shih emphasized that both the 8-inch and 12-inch businesses "have clear room for price improvement," and he expects 2027 to be a turning point for the average selling price trend, with positive improvement starting from the first quarter of next year. He revealed that annual price negotiations have entered the late stage, and management is confident in the outlook.