United Microelectronics Corp (NYSE: UMC)

Sector: Technology Industry: Semiconductors CIK: 0001033767
P/B 1.62
P/E 14.03
P/S 2.48
Market Cap 19.20 Bn
ROIC (Qtr) 321.69
Div Yield % 0.00
Rev 1y % (Qtr) 1.31
Total Debt (Qtr) 2.49 Bn
Debt/Equity (Qtr) 0.21

About

United Microelectronics Corporation (UMC), a prominent player in the semiconductor industry, is a Taiwan-based company whose stock is listed on the Taiwan Stock Exchange and the New York Stock Exchange under the ticker symbol UMC. UMC is renowned for its independent semiconductor foundry, offering manufacturing services to clients worldwide. UMC's primary business activities encompass the design, manufacture, and sale of a diverse range of semiconductor products, which include logic, mixed-signal, and memory devices. The company's product portfolio...

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Analysis

Pros

  • Strong operating cash flow of 3.28B provides robust 1.32x coverage of total debt 2.49B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 3.42B provide 6.24x coverage of short-term debt 548.05M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 3.28B provides strong 167.78x coverage of stock compensation 19.52M, indicating sustainable incentive practices.
  • Strong tangible asset base of 18.08B provides 7.26x coverage of total debt 2.49B, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 3.28B provides 10.86x coverage of SG&A expenses 301.57M, showing efficient operational cost management.

Cons

  • Operating cash flow of 3.28B barely covers its investment activities of (1.74B), with a coverage ratio of -1.88, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.74B) provide weak support for R&D spending of 561.75M, which is -3.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of 1.60B represents just -8.95x of debt issuance (178.74M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 3.28B barely covers operating expenses of (55.89M) with a -58.61 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Operating earnings of 1.50B show weak coverage of depreciation charges of 1.87B, with a 0.80 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,276.26 Bn 43.11 22.85 10.48 Bn
2 AVGO Broadcom Inc. 1,690.87 Bn 89.31 28.22 64.23 Bn
3 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,514.32 Bn 29.36 12.71 31.18 Bn
4 AMD Advanced Micro Devices Inc 343.27 Bn 103.83 10.72 3.87 Bn
5 MU Micron Technology Inc 269.16 Bn 31.52 7.20 15.28 Bn
6 INTC Intel Corp 249.55 Bn 1,260.33 4.67 46.55 Bn
7 QCOM Qualcomm Inc/De 195.62 Bn 35.30 4.42 14.81 Bn
8 TXN Texas Instruments Inc 163.92 Bn 32.50 9.49 14.05 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 0.04 3.95
EV to Cash from Ops. 0.22 -331.60
EV to Debt 0.29 86.14
EV to EBIT 0.49 -55.96
EV to EBITDA 0.22 20.88
EV to Free Cash Flow [EV/FCF] 0.46 -4.09
EV to Market Cap 0.04 0.80
EV to Revenue 0.09 18.79
Price to Book Value [P/B] 1.62 5.23
Price to Earnings [P/E] 14.03 12.47

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 2.29
Dividend Payout Ratio % 0.00 8.00
Dividend per Basic Share 0.00 0.62
FCF Dividend Payout Ratio % 0.00 10.38
Interest Coverage 0.00 8.19

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 41.39 -155.77
Cash and Equivalents Growth (1y) % 4.45 44.44
Dividend Growth (1y) % 0.00 5.30
EBIAT Growth (1y) % -14.55 34.22
EBITDA Growth (1y) % 7.11 47.50
EBIT Growth (1y) % -18.38 30.14
EBT Growth (1y) % -18.38 47.04
EPS Growth (1y) % -14.79 36.18
FCF Growth (1y) % 1,663.24 252.76
Gross Profit Growth (1y) % -5.78 43.92

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.01 0.49
Cash Payout Ratio 0.00 0.09
Cash Ratio 1.27 2.23
Current Ratio 2.34 5.43
Debt to Equity Ratio 0.21 0.34
Interest Cover Ratio 0.00 8.19
Times Interest Earned 0.00 8.19

Profitability

Metric Value Industry Percentile
EBITDA Margin % 43.50 -112.44
EBIT Margin % 589.21 -92.10
EBT Margin % 19.33 -132.39
Gross Margin % 28.90 47.63
Net Profit Margin % 17.70 -133.41