Firm ASPs and 22nm growth support 2026 outperformance despite flat wafer shipments and mid-70% utilization.
| Quarter | Q4 FY25 |
|---|---|
| Call date | 2026-01-31 |
| Results reported | 2026-01-28 |
| Length | 61 minutes |
| Speakers | Michael Lin, Head of Investor Relations; Chi-Dung Liu, CFO |
Results, guidance and Q&A analysis for this call
Operator (Operator)
Welcome everyone to UMC's 2025 Fourth Quarter Earnings Conference Call. All lines have been placed and muted to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at the time if you would like to ask the question. For your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within two hours after the conference is finished.
Michael Lin (Head of Investor Relations)
please visit our website, www.umc.com, under the Investor Relations, Investors Events section. Now, I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, please begin. Thank you and welcome to UMC's conference call for the fourth quarter of 2025. I'm joined by Mr. Jason Wong, President of UMC, and Mr. Chi-Dung Liu, the CFO of UMC. In a moment, we will hear our CFO present the fourth quarter financial results, followed by our President's key message to address UMC's focus on the first quarter 2026 guidance. Once our President and CFO complete their remarks, there will be a Q&A session. UMC's quarterly financial reports are available at our website, www.umc.com. under the investor's financial section. During this conference, we may make forward-looking statements based on management's current expectations and beliefs. These forward-looking statements are subject to a number of risks and uncertainties that will cause actual results to differ materially, including the risks that may be beyond the company's control. For a more detailed description of these risks and uncertainties, Please refer to our recent and subsequent filings with the SEC and the IOC security authorities. During this conference, you may view our financial presentation material, which is being broadcast live through the internet. Now, I would like to introduce UMC's CFO, Mr. Chi-Dung Liu, to discuss UMC's fourth quarter 2025 financial results.
Chi-Dung Liu (CFO)
Thank you, Michael. I'd like to go through the 4Q25 investor conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page 4, the fourth quarter of 2025, consolidated revenue was $61.81 billion NT, with a gross margin around 30.7%. The net income attributable to the stockholder of the parent was $10.06 billion NT. and the earnings per ordinary shares was 0.81 NT dollars utilization rate in the fourth quarter is stayed the same as the previous one around 78 percent for the sequence of sequential comparison revenue growth 4.5 percent quarter over quarter 61.8 billion NT gross margin improved to over 30 percent 30.7 gross margin of 18.95 billion NT dollars and The non-operating income remains similar to that of last quarter, and the net income overall attributed to shareholders of the parent is around 10.05 billion NT for EPS of 0.81 in Q4 of 2025. For year-over-year comparison on page 6, revenue grew by 2.3% to reach 237.5 billion NT. the whole year of 2025. Both margin rate is around 29% or 68.9 billion NT and for the net income attributable to the shareholder of the parent for year 2025 is around 41.7 billion NT, 17.6% net income rate. EPS for 2025 was 3.34. which is a decline compared to that of 3.8 in 2024. On page 7 at the end of 2025 cash amount still more than 110 NT with total equity of the company is now 379.8 billion NT dollars at the end of 2020. For ASP on page 8 you can tell for the last three quarter or four it pretty much remained similar level our blended asp throughout the 2025 for revenue breakdown on page nine for quarterly comparison the change is mainly in the increase in asia and europe which now north america represents about 21 in q4 of last year for the full year breakdown on page 10 the change similar. We see a drop from 25% in 2024 to 22% in 2025. For page 11, IDM for Q4 revenue represent about for the full year number on page 12, IDM for 19% increased by 3 percentage points to 19% in 2025. For quarterly revenue breakdown by application, it remains almost similar for the over quarter on page 13. For the annual performance on the application breakdown on page 4, consumer increased by 3 percentage points to 31% from 28% in the previous year. And we continue to see 22 nanometer to be our key driver for the recent quarters and also forward-looking as well. So 22 and 28 revenue in Q4-25 now represent 36% of the total revenue pool. On page 16, for the full year, the increase of 22 and 28 revenue is 3 percentage points. And we also show about 2 percentage point increase in 49 meters on a year-over-year comparison. Capacity remains flat on quarter-over-quarter comparison base, but it will decline by... roughly 1% due to the annual maintenance schedule. On page 18, our latest forecast for 2026 KPAG plan is around $1.5 billion, which is slightly declining from $1.6 billion in the year of 2025. The above is a summary of UMC's results for Q4 2025. More details are available in the report, which has been posted on our website. I will now turn the call over to President of UMC, Mr. Chih-Tung Wong. Thank you, Chih-Tung. Good evening, everyone. Here, I would like to share UMC's fourth quarter report. In the fourth quarter, our results were in line with the guidance. With the sluggish waiver shipments amid mild demand across most markets, the 4.5% revenue increase during the quarter was supported by favorable foreign exchange movements, as well as a sequential growth in our 22 and 28 nm systems, which continues to improve our product mix. With the 22 and 28 nm segment, 22 nm revenue increased 31% to a record high, accounting for more than 13% of total fourth quarter revenue. Looking at the four-year UMC delivers solid performance in 2025 with a shimmering increase of 12.3% and revenue in U.S. dollars of 5.3% year-on-year. Going into the first of 2020, we expect wave of demand to reduce. UMC is confident that 2026 will be another growth year as it takes out our 22-nm platform and other new solutions continue to gain business traction. We have been working hard to lay the foundation for our next phase of growth, investing for the future in post-30N technology. In 2025, we complete the new Phase 3 facility at our Singapore, which is already playing a central role in supporting customers to add visitors. At the same time, we are striving to expand our footprint in the U.S. through an innovative yet cost-effective mode of partnership, such as our 12 nanometer cooperation with Intel, and the recently announced MOU. The leadership UMC has built over the past few years across specialty technologies, including embedded high voltage, non-volatile memory, and VCD, and will compete to 2026, and we expect advanced packaging and silicon photonics. Some of the new growth positioning UMC to address the evolving needs of our performance. AI, networking, consumer, automotive, and more. Now let's move on to first the 2026 guidance. Our wafer channel will remain flat. ASP will remain firm. Source margin will be approximately in the high 20% range. Capacity utilization rate will be in the mid 70%. Our 2026 cash base capex budget will be US $1.5 billion.
Operator (Operator)
That concludes my comments. Thank you all for your attention. Now we are ready for questions. Yes, thank you, President Wong. And ladies and gentlemen, we will now begin the question and answer session. If you have a question for any of today's speakers, please press star key and number one on your telephone keypad, and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, star key and number two.
Operator (Operator)
cancel the question now please press star 1 on your keypad to thank you now first question will be coming from sony ring ubs go ahead please Good afternoon. Thank you very much for taking my questions. So I have a few questions. Number one, Jason, may we have your thoughts on overall market outlook for 2026, and then for Semi versus Foundry, and if UMC can continue to outgrow your adjustable market for this year? Sure. Well, for 2026, we expect AI-related segment remains the primary focus in Semi industry. And furthermore, with the continuous commercial deployment of HAI applications, demand for chips using a general-purpose server is also expected. In contrast, the adverse effects of memory supply put some pressure on specific consumer electronics. But overall, the semiconductor industry is projected to grow by meetings in 2026. The question for foundry markets. We believe that AI demand will remain strong and is the main contributor behind the low 20% growth projection in the foundry market. On the other hand, although the memory pricing may impact demand of the foundry market, at this time, we at UMC, we estimate that our addressable market will grow by low single-digit percentage, and UMC's growth was expected to outperform the average growth of our addressable market. Got it. Thank you very much, Jason. So then my second question is on pricing. Lots of discussions and obviously Chinese peers are raising pricing. So how should we think about the pricing outlook for material foundry and for UMC through 2026? Will UMC be able to start to provide better value? And if yes, which product categories should we expand more upside from here? okay well we do anticipate a more favorable asp environment in 2026 this is 20. uh does all of really reflect our discipline the pricing strategy and the positive impact from multiple reasons product mix optimization loading improvement and reduce exposure to more commoditized markets uh as you referring to china players respect the strong growth momentum in our 22 nanometer demand to support our product mix in 2025 as well. Overall, our pricing strategy remains consistent and is anchored to the value where we deliver technology differentiation and manufacturing excellence. So we do think the 2026 pricing environment is more favorable now. the question about which product and I mean we don't come in pricing our specific product or any specific note but in general we do see the environment is more favorable now no problem that's very helpful and then a follow-up would be on the overall industry supply versus demand for the coming few years TSMC on the recent earnings conference talked about the plan to optimize capacity for mature nodes to best support cloud AI demand in coming few years. So from your perspective, how should we think about the opportunity here? Are you starting to see more client engagement for new products in the coming few years? We're always excited to see more customer engagement. But more importantly, we need to prepare ourselves. and we welcome any opportunity to support our customers. So we view this landscape shift as an opportunity to further optimize our product mix and gradually improve ASP and module as well. Got it, got it. And then maybe lastly, just on your Singapore expansion, how quickly are you planning to ramp capacity in 2026 and in 2027? And how should you think about the differentiation of products that you have for Singapore versus the Taiwan capacities for 22 and 28 nanometer? And then with that, how should we forecast the depreciation in 2026 and 2027? in our Singapore facility, it's our strategy that we have a geographically diverse Taiwan-Singapore technology. No coverage extent, we would like to cover most of those. So the customer has a benefit of crossing different steps. For the depreciation forecast, we are looking for some like low-teen annual increase in the full-year depreciation expenses. As for next year, we don't have the exact number yet, but it could be the similar amount for 2026. So in a way, we will see the depreciation curve to peak either this year or next year, which are very similar numbers. Got it. Thank you very much. Thank you. Bank of America. Go ahead, please. Hi, Jason. Congress on the results, and thanks for taking my questions. i would actually like to follow up on the pricing if we look at the life for life pricing environments based on your current mid to high 70 percentage of the utilization if we strip out any of the consideration of the product mix improvements are you able to improve or just to pass on your higher manufacturing cost or material cost to your customers at this stage or you still receive a meaningful pushback from your customers the overall pricing in the in the 2026 do see some changes so when you talk about when you are supporting your customer to gain market share by strengthening their cost structure i mean you are actually adjusting down your pricing for those customers or it is actually up for this year just on the other term a couple of your fabulous customers recently talked about earlier and also stronger inventory restocking because of the memory price hike i was just wondering your first quarter outlook here if your customers are seeing stronger inventory polling in the traditional low season why is your shipment for first quarter is still relatively flat and then what's your put and take for the first quarter overall business outlook just wondering whether which part of the business is actually relatively stronger and yeah that's pretty clear and then since you just mentioned about the seasonality are you expecting this year's seasonality to look pretty similar to the previous few years that first quarter could be relatively light and second quarter and third quarter you will be able to see a relative strength into the year we provide you with we look at the whole it's a new project of a multi multiple technology across the embedded high voltage non-biotech memory uh power management ic rfsoi it supports the m market in communication consumer automotive and ai servers which will rent in second half 2026 so we we were looking at this year that our second half will outperform the first of first half of the second half will be better so that may be deviated from the traditional personality uh but as far as for us we think the overall shipment for the year will be a growth year and as well as second half will be back okay yeah and last question before I'm back in the queue is that just based on the comment you have just now what is the underlying market unit demand assumption you are have you have right now Is it the overall smartphone market will actually grow or decline based on your current base case scenario that second half will be better? Or it is actually already vectoring a relatively more conservative expectation that smartphone, TV, PC, these kind of consumer markets will actually see a unit decline? market and marketing man association okay thank you so much jason she don't that's pretty helpful thank you next one phil expand kgi don't have it hi uh thank you for taking my question uh i just have a couple questions about the future growth driver particularly in the remark uh you mentioned about the advanced packaging and sitcom for nothing so my first question will be uh besides the interposer um what else uh we might have the sun engagement for device packaging and for in the post what's the capacity expansion uh plan for 2026 and my second question will uh the speaker for telling a particular in the singapore fab um a lot of rumor about your potential customer is any color any client engagement or any contribution can generate from this segment any color will be grateful thanks okay so Yeah, let me see if I can cover. Well, if I look back, I mean, I understand you asked for 2026, but let me look back this. We have to leave a very solid 2020 with a 12.3% shipment growth and revenue growth, which outperform our addressable. This result is supported by our differentiated 22 nanometer technology and other specialty offering across an 8-inch amid a world-class market, a world-based market demand recovery. And building on the 2025, we do view 2026 as a year of both continuity and evolution. We believe the UMC will once again take in shares and outperform its addressable market, and we will also see several positive inflations. As our guidance suggests, we are seeing a more favorable price environment. This will result in tighter supply globally. as well as our differentiated technology and geographical footprint, which will drive our growth for the next few years. We are on track with our 12-nm cooperation with Intel, which is just about to take place in 2027. Now, that's the existing one. And your question about silicon photonics and advanced packaging, secondly, we see 2026 as a pivotal year for those high-performance, high-potential opportunities. such you know like the circum photonics and advanced packaging and we are making those deliberated choice you know working with you know imac to invest and scale them into a significant driver for our if you ask specifically about advanced packaging and they they are two distinct properties for advanced packaging one we call enabler the other we call expander Let us explain. I know it's a bit long, but bear with me. So the fourth enabler, we are seeing the 2.5D and 3D packaging, as well as the chiplets, move well beyond just the data center and out to a high-end chip. Over time, we expect advanced packaging to be adopted, even on mature nodes. A good example is RFSOI. We have mentioned it many times. While we're already in production, in addition, In addition to the RFSOI, we are also exploring other applications with the leading partners and believe we are at the least. What this really means for customers is better, more differentiated products. And for UMC, it is a strategic win-win. We believe our leadership in advanced packaging will enable us to sustain our higher ASD and drive better margins in many of our already established businesses. We also believe that advanced packaging will help UMC address new opportunities. For example, customers are coming to us for AI-related applications. This is not necessarily just the XPU-related, but we are adding value by stacking memory with logic, adding DTC to the stack, or selling the discrete DTC. We are also working with our partners to enable a total solution. Meanwhile, we are working with more than 10 customers in advance packaging currently and more than 20 new tape-outs in 2026. We foresee revenue in 2027 will be a significant year. And the capacity question you have, that capacity claim will be aligned with the customer rent plan and market outlook. You also asked about the Silicon Photonics. For Silicon Photonics, we are developing solutions which include KIC. OIO, OCS, and CPO. Our collaboration with IMEX allow us to deliver the industry standard PDK to our customer in 2027. In addition to platform preparation, we also work with the customer on capping technology of a 12-inch PIC, aiming for a plugable product, which is expected to run this year. We'll also combine our advanced packaging know-how with the circumference. as many of the applications require the integration and different technology and materials. Looking ahead to achieve 1.6T bandwidth and beyond, we're working with both customers and vendors for the finding of heterogeneous materials as a TFLM. Those technologies could also be used in additional applications such as quantum computing. Again, we hope to integrate the new materials via an advanced package. technology as well so those are all integrated all together that's why i gave you a bit of a longer answer i hope that explains it um yeah okay thank you but uh just let me just quick follow up and replace my question so for silicon photonics uh what's the earliest timetable we can see the revenue contribution like by most likely the uh for the 12-inch pic uh for the parkable product i will be expecting to rent this okay and and about the uh because as i know about the interposer currently uh is the interposer also the bottleneck for our partner to expand their capacity so is there any color we can how much capacity grows for the interposer like how much year on year grows or something like that Well, right now, the capacity planning will be aligned with the customer for the 2027 RAN. So, we will probably guide, you know, provide you some clarity. Right now, the 2026 will focus on the table. Okay. Thank you. Thank you. Next one, Goku Halihalan, JP Morgan. Go ahead, please. Yeah, hi. Thanks for taking my question. Hi, Jason. Could you go a little bit deeper into that advanced packaging comment that you made? what is the involvement level of UMC in some of these advanced packaging solutions? Are you doing full stack or is it basically like previously where you were largely focused on the interposal side of the equation? And in terms of the tape outs that you have, what are the nature of these tape outs? Are these mostly Datacenter ASIC related products or is it a much wider array of products other than just Datacenter ASIC? Sure. Well, first of all, we have reported, you know, our advanced packaging. We have us building some of the capability from two-way stacking and TSD and FD. And then the way we see it, like I explained, the enabler is we apply those to many of the current products. And one good example I mentioned is the RFSO. So we have a wafer-to-wafer hyperbonding waste. our personalized solution. And then the sound capability can be built. On one hand, the way we see it, BCD application as well. So they will, it's our belief, it is for a full factor reason or for a higher performance reason. And many different applications will start adapting there. So we think this is going to be a broad perspective. Got it. and any any plans to further expand your interposer capacity i think we had expanded i think up to 6k and then kind of stopped it there now some of that demand seems to be kind of coming back um for some of one of your customers in china so is there any plans to expand the capacity further which is that we can leverage 49 meters got it uh that's clear Another question I had is just your expectations for the communication consumer segment, which is north of 70% of revenue, given all the concerns about smartphone, PC. How are you budgeting for this? Are your customers telling you that they're really concerned about this memory cost inflation or right now you still don't really hear that from the customers that that's going to be a big issue from a user perspective going through the year? Well, we're also cautious about that topic. As of today, we have not observed any demand impact for the year despite that recent surge. And our technology predominantly supports addressing the higher end of the market. where the demand tends to be more in the period of memory tightness. Because the supply is usually typically prioritized in such high-end, higher-value device. While we remain attentive to the potential impact on the memory market, assessment is that any potential headwinds are probably manageable, and we'll continue monitoring the situation closely. Got it. We have questions on the geographic split of revenues. Could you talk a little bit about the Intel 12 nanometer progress and any color on how you will be booking revenues or profits from this partnership given the fab is Intel fab while you are essentially the provider of customers and some degree of IP as well into it? And secondly, on the XiamenSAP, what is the strategy for the XiamenSAP medium to long term, given many of your semiconductor peers in Taiwan have kind of progressively exceeded capacity in mainland China? Well, for the 12 nanometer project with Intel, overall, the 12 nanometer collaboration with Intel continues to deliver the PDK, but PayPal will come in. in 2027, making this a significant step in future revenue growth. Right now, UMC and Intel are working closely to ensure successful payouts and an efficient program. The project event, it is right now, the application on the 12 nanometer cooperation, including digital TV, Wi-Fi connectivity, and high-speed interface product. In terms of the business model, and probably not available for us to comment, it is a win-win strategy that we see. as well as for our customers. Very high competencies. Okay. And any thoughts for the shaman capacity? Yes. You know, I kind of touched that earlier as well. You know, I look at shaman, not just shaman. Part of our competitive advantage is our shaman, you know, being one of them. In particular, we are running at a full utilization. We see, we're continuing to see many different engagements coming to the customer mindset. Okay. uh just one more on blended asp i think uh jason you mentioned that the asp environment is more favorable this year but overall utilization is still in the mid 70s as of q1 right so do you expect that this year we could see a scenario that we could see blended asp is moving up uh meaningfully like five to ten percent or something like that like we have had in the past or that requires a much higher level of utilization that is probably not happening given your low super legit foundry growth expectation. Sure. I mean the high utilization is one of the important factors, but that's not the only factor. We want to make sure the pricing strategy is enabled. But we do see the pricing environment is getting more favorable to foundry because the loading reason. But the magnitude of that, we probably have to completely manage it. Got it. Thank you. thank you next one alex chain bmp go ahead please uh thank you for taking my question i just have a very quick one i just saw the company announced that it started the mass production of a super flash generation flow so just wondering how much revenue contribution from the normal time memory business in the past quarter or maybe past the year and also how much revenue is contributed by the power management ICs for the server-related applications. Thank you. We don't have a way to break it down. It's based on non-volatile memory and the BCD specialty revenue representing about 50% of our overall revenue. And I can let you know the high voltage is about 30% of that. And the rest of it, I would say, is a combination of the non-volatile memory as well as the BCD. thank you very much thank you next one laura chain city go ahead please hi thank you for taking my question good afternoon gentlemen i just want to follow up on the iteration rate and also the gross margin outlook uh jensen you mentioned that the pricing environment seems to be improving more favorable and together with the firm schumann and the better product makers as well as the iteration rate so how should we think about the growth margin trend you guided that will be high 20 percent for q1 but with these variables of factors should we what should we think about the the margins throughout the year that's my first question you can be highly dependent on the other makes declaration and foreign exchange rate so beyond is mainly due to the higher cost especially the higher depreciation expenses as i mentioned it will grow by uh floating in the uh full year of 2020 As for 2026, we will continue to cope with higher depreciation expenses as well as the other inflationary pressures, raw material and other costs. To mitigate and cope with the headwinds, we will continue with our cost reduction efforts and also all the activities to improve our productivity and drive operation efficiency. And these measures hopefully will help UMC to deliver a stable EBITDA margin and ensure our long-term resilience to remain intact. Our 2025 EBITDA margin is actually a good improvement compared to that of 2024. yeah sure thank you very much um and also i think uh for the advanced packaging and uh as well as the silicon photonics is one of the key things that unc may have a great opportunity we know that unc has already working on advanced pathogens previously on interposer probably now we'll see more various different designs so could you share with us what uh about the revenue contributions of your uh advanced packaging right now and how would that look like in two three years currently the uh the interval was very limited while we have engaged with we do see to see that revenue so significant means that uh could that be like five ten percent or higher i i expect him but i mean if you're relative if you're referring to the overall revenue contribution. Okay. Thank you very much. Thank you. Next we'll have Bruce Lu, Goldman Sachs, for questions. Go ahead, please. Okay. Thank you for taking my questions. I want to go a little bit deeper for the single photonics. I mean, as you might know that your peers, like , pretty vocal about that. Can you tell us how big you think the adjustment market for Singapore Atomic is for you guys in two years, and how do you win market? What is the competitive advantage for you in this business, though? I mean, other than working with IMEC. It's not only serving the Singapore facility. It is one of our important manufacturing sites. Our worldwide customers, all different applications. So it's part of the geographical diversity. My question is for Silicon Photonics, our business strategy. Silicon Photonics? Yes. No, no, no, no. I'm sorry. Let me rephrase my question. So the growth driver for UNC, one of the CPO, I'm assuming is, you know, having more business in Silicon Photonics. uh you know in for your peers like you know global foundry or uh tarasini they are pretty vocal about the you know signal photonics and have you know uh meaningful revenue contribution already for umc perspective you know what is your uh competitive advantage for umc to win this business and how how much business you can win or how big is the addressable market for you in two years strategy is Our cooperation with IMAP allowed us to deliver the industry standard PDK to our customers in 2027, particularly in 12-inch. So many of our competitors are today at 8-inch, and we are focused on what we believe the 12-inch will have. And right now, we already have certain products that... And meanwhile, we're combining our advanced package for many different... Doing that, we think... but that's mostly for plug-in right because if you don't have the eic uh you know the pure cpo product might not be your kimi ghost driver right we're not looking at a completely cpo package we're looking at particularly in the pic and oio and ots i see understand it's very clear Next one is, and we do see that the progress for the Intel project for 12 nanometers is pretty smooth. I just want to know what is the next step. I mean, when we can see a further collaboration in 10, 7, and beyond. I mean, obviously, whatever you said, you know. the advantage at 12 inch you can also use the same argument for seven nanometer what's the what's what's stopping you to doing that to do that you you're also right on that and our focus right now is on delivering the 12 nanometer platforms in the future should we make sense for both unca intel as well as our customers you know we will surely consider expanding our collaboration to are the derivative as well as the technology. What is stopping now? What is the showstopper now? I think the focus is a focus on 12 nanometers. We have to believe it as well and make sure that we deliver that program securely well. And I think anything that makes sense from that on, like you said, there will be a discussion. Because we already assume that you can deliver something in 27. So, you know, given that working for seven, maybe you need two, three years. We want to see the, you know, the project kick off as soon as possible. That's all my question. Thank you. Please press star key and number one on your keypad if you would like to ask the question. Thank you. Our last question, New Burger Burman. Go ahead, please. Hi, Jason. It's been a while. And congrats on the progress you've made throughout these couple years. I just have a few questions. The first one is on the market dynamics. I think previously, Sonny has asked about the TSMC is shrinking or defocusing on this, the mature foundry process. And it looks like not just TSMC, but also the other foundries. um are seems to be doing some leading edge logic function are seems to be doing the same thing and also power chip uh recently um just uh reached agreement with micron so this tonal fab which means they're trying to streamline and reorg some of the funder process too. So it seems that there's a lot of supply is kind of being taken away because of the rolling out effects from the AI and crawling out some of these older nodes. On the supply side, it seems to be that's actually decreasing. And on the demand side, if you look at I think TI just reported overnight. I think it seems like there's been more obvious recovery on the analog and serious phase. So on demand side, that's also improving. On the supply side, that's actually decreasing. So it looks like supply-demand dynamics is... Moving to a more favorable situation, I think that explains why you were mentioning the pricing dynamics favorable this year. So I'm just curious about your view. If you try to compare the current, like the mature funders' dynamic situation right now versus, I mean, back in 2021 when there's a severe shortage back then, how would you compare this turnaround versus the last cycle? I mean, really good question. I mean, we saw some of the changes, and we also see a deep dive in demand and supply. And we think whether this is a short-term or long-term. If you look at the driver behind us, you know, we see, you've mentioned this truly for the AI phenomenon. And so we see that AI demand remains to be very strong, at least at a foreseeable future. And I think this momentum will continue driving demand. And meanwhile, many of this, the capability, AI capability, will be affiliating to even the other end market edge AI as well. So we think this will continue. And from an economic standpoint, building any of the mature facility, we do think this could last longer. I think the situation, but again, meanwhile, is like i said earlier i think it is more favorable pricing environment the questions i have is your earlier comments um on the pricing i think the off you offer some of the annual um maybe some discount to some of our our strategic clients for their share again but also net net wise um it also um rate seems to be pricing is going up for majority of the clients so net net is going to still be the the SP still be positive. But I'm just curious about for those clients that you're offering some discount at the beginning of the year, down the road, if the next few months or quarter situation has become tighter, would you be able to reprice with these customers? Those will be ongoing. We're always working with our customers. reflect the market dynamics as well as the cost increases. So, you know, I believe this conversation will surely happen. You know, it happened in the past, it will happen now, and it will happen in the future. So, you know, this pricing discussion, I think customers understand that, and we just have to continue monitoring the market dynamic and maintain our competitiveness of both us, the customer, and ourselves. Yeah, well so on that because of the some of the the pricing That started to effective on the January 1st this year. This would actually negotiate already In fourth quarter last year, right? Some alignment on that both volume and the pricing so if a volume has changed There are some volume dynamic in that as well Yeah, my question actually is that because a lot of the pricing that effective on January 1st, beginning of the year, was actually communicated a month or two months ago before that, toward the end of last year, when the time that the supply-demand dynamics haven't been really that tight as compared to some of the changes. uh that happened in the just past couple weeks am i getting that right uh yeah you're right yeah but those also is the conditions so even the condition has changed the sound of pricing yeah yeah exactly that is what i'm trying to to to to to to discuss with you because we also saw a lot of uh um the other different components of different sub sectors within the tech or semi supply chain that um like such as memory i think the pricing were still down in july august but the old southern september price is going up um so i'm just curious about that uh that because when you negotiated some of this discount um months ago the supply demand elements was not the same as today so things remain fluid dynamic and uh It's still going to be flexible and it's going to be dynamic and open for changes down the road if things are moving more favorably. I think the core of the pricing strategy is it has to be consistent and it has to be anchored with the bank and also the company centering above. If the condition has changed, yes, they own another fiscal price. So that will be something. Yeah, and the condition has started to change now. okay okay cool thank you and happy new year yeah you too thank you ladies and gentlemen we thank you for all your questions close today's q a session now turn things over to umc head of ir for closing remarks thank you thank you for attending this conference today we appreciate your questions as always if you have any additional follow-up questions feel free to contact us at umc.com have a good day Thank you. And ladies and gentlemen, that concludes Quarter 2025. Thank you for your participation in UMC's conference. There will be a webcast replay within two hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Thank you again. Goodbye.
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Transcript produced by Signals.AI from the company's own earnings call audio; speech recognition can mishear a word. Not personalized investment advice.