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UMC sees stagnant demand for 22nm and mature semiconductor processes
Thursday, January 29, 2026 at 06:32 AM
UMC reports stable performance but notes that robust demand for its 22nm process has not materialized, indicating ongoing challenges for mature semiconductor manufacturing nodes.
Context
UMC recently signaled a cautious start to 2025, reporting that demand for its 22nm and 28nm mature processes remains stagnant despite previous expectations for a cyclical recovery. While the AI sector drives massive growth for advanced nodes, the legacy chip market is struggling with a persistent inventory correction in the automotive and industrial segments. This lack of momentum indicates that the transition to 22nm is not yet providing the expected volume boost to offset broader market weakness.
Financial guidance reflects these headwinds, with UMC projecting flat wafer shipments and a slight decline in average selling prices for Q1 2025. The company anticipates a gross margin of approximately 30%, as rising depreciation costs and intense competition from mainland Chinese foundries weigh on profitability. Investors should note that while UMC plans a capital expenditure of $3 billion for 2025, the persistent oversupply in mature nodes suggests a prolonged recovery period rather than a rapid rebound.
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