Q3 2025 United Microelectronics Corp Earnings Call

October 29, 2025

Speaker #5: In a moment, we will hear our CFO present the third quarter financial results, followed by our president's key message to address UMC's focus and fourth quarter 2025 guidance.

Speaker #5: Once our president and CFO completed remarks , they will be a Q&A session . Umc's quarterly financial reports are available at our website .

Speaker #5: Triple W dot com . Under the Investors Financial section . During this conference , we may make forward looking statements based on management's current expectations and beliefs .

Speaker #5: These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including risks that may be beyond the company's control.

Speaker #5: For more detailed description of these risks and uncertainties , please refer to our recent and subsequent filings with the SEC and our security authorities .

Michael Lin: For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and the ROC security authorities. During this conference, you may view our financial presentations material, which is being broadcast live through the internet. Now, I would like to introduce UMC's CFO, Mr. Chi-Tung Liu, to discuss UMC's third quarter 2025 financial results.

Rachel Smith: For a more detailed description of this risk and uncertainties, please refer to our recent and subsequently filings with the SEC and the ROC security authorities. During this conference, you may view our financial presentations material, which is being broadcast live through the Internet. Now, I would like to introduce UMC CFO, Mr. Chitung Liu, to discuss UMC's Q3 2025 financial results.

Michael Lin: For a more detailed description of this risk and uncertainties, please refer to our recent and subsequently filings with the SEC and the ROC security authorities. During this conference, you may view our financial presentations material, which is being broadcast live through the Internet. Now, I would like to introduce UMC CFO, Mr. Chitung Liu, to discuss UMC's Q3 2025 financial results.

Speaker #5: During this conference , you may view our financial presentations material , which is being broadcast live through the internet . Now , I would like to introduce UMC CFO , Mr. Dongdu to discuss UMC third quarter 2020 financial results .

Speaker #6: Thank you Michael . I'd like to go through the third quarter 2025 investor conference presentation material , which can be downloaded or viewed in real time from our website starting on page four .

Chitung Liu: Thank you, Michael. I'd like to go through the Q3 2025 investor conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page 4, the Q3 2025 consolidated revenue was TWD 59.13 billion. With gross margin at 29.8%. Net income attributable to the stockholder of the parent was TWD 14.98 billion, and the earnings per ordinary share were TWD 1.2. Capacity utilization rate climbed to 78% in that quarter, with wafer shipment just marked 1 million 12-inch equivalent wafers. On page 5, on the sequential comparison, Q3 revenue of TWD 59.12 billion increased slightly compared to the previous quarter, mainly due to higher wafer shipment.

Chi-Tung Liu: Thank you, Michael. I'd like to go through the third quarter 2025 investor conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page four, in the third quarter of 2025, consolidated revenue was NT$59.13 billion, with gross margin at 29.8%. Net income attributable to the stockholder of the parent was NT$14.98 billion, and the earnings per ordinary share were NT$1.2. Capacity utilization rate climbed to 78% in that quarter, with wafer shipment just marked 1 million 12-inch equivalent wafers. On page five, under sequential comparison, third quarter revenue of NT$59.12 billion increased slightly compared to the previous quarter, mainly due to higher wafer shipment, although the NT dollar exchange rate was an unfavorable factor of around 3%.

Speaker #6: In the third quarter of 2025, consolidated revenue was $59.13 billion, with a gross margin of 29.8%. Net income attributable to the stockholders of the parent was $14.98 billion, and earnings per ordinary share were $1.20. The capacity utilization rate climbed to 78% in that quarter, with wafer shipments just marking 1 million.

Speaker #6: 12 inch equivalent wafers . On page five , on the sequential comparison , third quarter revenue of 59.12 billion . Increased slightly compared to the previous quarter , mainly due to higher wafer shipment .

Speaker #6: Although the dollar exchange rate was unfavorable, a factor of around 3%, gross margin also climbed on the back of the better capacity utilization rate to 29.8%. Net income reached nearly $15 billion, or an EPS of $1.20 per share.

Chitung Liu: Although, the TWD exchange rate was an unfavorable factor of around 3%. Gross margin also climbed on back of the better capacity utilization rate to 29.8%. Net income reached nearly TWD 15 billion, or an EPS of 1.2 per share in TWD terms. On year-over-year comparison, on page 6, for Q1-Q3, revenue grew 2.2% year-over-year to TWD 175.7 billion. Gross margin was around 28.4% or nearly TWD 50 billion for Q1-Q3 of 2025. Overall net income for Q1-Q3 is down to TWD 2.54 per share compared to 3.12 in the previous Q1-Q3 of 2024.

Chi-Tung Liu: Gross margin also climbed on behalf of the better capacity utilization rate to 29.8%, and net income reached nearly NT$15 billion, or an EPS of NT$1.2 per share in NT dollar terms. On year-over-year comparison on page six, for the first three quarters, revenue grew 2.2% year-over-year to NT$175.7 billion. Gross margin was around 28.4%, or nearly NT$50 billion for the first three quarters of 2025. Overall net income for the first three quarters is down to NT$2.54 per share compared to NT$3.12 in the previous three quarters of 2024. On page seven, cash is still above NT$100 billion, and the total equity of the company is now NT$361 billion at the end of the third quarter of 2025. ASP on page eight shows it remained firm for the past two quarters.

Speaker #6: In dollar terms . On a year over year comparison . On page six , for the first three quarters , revenue grew 2.2% year over year to 175.7 billion and gross margin was around 28.4% , or nearly 50 billion , NT .

Speaker #6: For the first three quarters of 2025 , for overall net income for the first three quarters is down to 2.5 . For NT dollars per share , compared to 3.12 in the previous three quarters of 2024 .

Speaker #6: Page seven . Cash is still above 100 billion NT and total equity of the company is now 361 billion NT . At the end of third quarter of 2025 .

Chitung Liu: On page seven, cash still above TWD 100 billion, and the total equity of the company is now TWD 361 billion at the end of Q3 2025. ASP on page eight shows it remain firm for the past two quarters. On page nine, for revenue breakdown, we can see that the North America represent about 25% of the total revenue in Q3, which is 5% higher compared to 20% in the previous quarter. On the contrary, Asia declined by nearly 4 percentage points to 63% in Q3 2025. IDM versus fabless remain unchanged on page 10 for Q3 2025.

Speaker #6: ASP on page eight shows it remained firm for the past two quarters . On page nine for revenue breakdown , we see we can see that the North America represents about 25% of the total revenue in the third quarter , which is 5% higher compared to 20% in the previous quarter .

Chi-Tung Liu: On page nine for revenue breakdown, we see that North America represents about 25% of the total revenue in the third quarter, which is 5% higher compared to 20% in the previous quarter. On the contrary, Asia declined by nearly 4 percentage points to 63% in the third quarter of 2025. IBM versus Fabulous remained unchanged on page 10 for the third quarter of 2025. On page 11, we noticed the communication and computers edge up in terms of sales mix when consumer declined by nearly 4 percentage points to 29% in the third quarter. On page 12, the segment sales breakdown by technology, 22-nanometer and 28-nanometer still remain our main technology node. When 22-nanometer continued to climb in terms of percentage, total 22-nanometer and 28-nanometer revenue reached about 35%. When 40-nanometer and 65-nanometer revenue somewhat unchanged in about 17% and 18% respectively.

Speaker #6: On the contrary, Asia declined by nearly four percentage points to 63% in the third quarter of 2025. IDM versus fabulous remained unchanged on page ten for the third quarter of 2025.

Speaker #6: On page 11 , we we noticed the communication and computers edge up in terms of sales mix . When consumer declined by nearly 4% , four percentage point to 29% in the third quarter .

Chitung Liu: On page 11, we notice the communication and computers age up in terms of sales mix when consumer declined by nearly 4%, 4 percentage points to 29% in the Q3. On page 12, the segment sales breakdown by technology, 22nm and 28nm still remain our main technology node, when 22nm continue to climb in terms of percentage. Total 22nm and 28nm revenue reach about 35%. 40nm and 65nm revenue somewhat unchanged in about 17% and 18% respectively. For our quarterly capacity for the Q3, we see minor increase coming out of our twelve X Xiamen fab, with now the monthly capacity is nearly 32,000 wafer per month. Total available capacity will remain flat for the coming quarters.

Speaker #6: Page 12 . The segment Sales breakdown by Technology 22 and 28 . Still remain our main technology . Now , when 22 continue to climb in terms of percentage total , 22 and 28 revenue reach about 35% .

Speaker #6: When 49 and 65 nanometer revenue somewhat unchanged in about 17 and 18% , respectively . For our quarterly capacity for the third quarter , we see minor increase coming out of our 12 ex fab , which now the monthly capacity is nearly 32,000 wafer per month .

Chi-Tung Liu: For our quarterly capacity for the third quarter, we see a minor increase coming out of our 12X Sharman Fab, with now the monthly capacity is nearly 32,000 wafers per month, and total available capacity will remain flat for the coming quarter. On the last page of my presentation, our annual CAPEX is heading to our budget number of $1.8 billion, with 90% in 12-inch and 10% in 8-inch. The above is a summary of United Microelectronics Corporation results for the third quarter of 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 United Microelectronics Corporation, Mr. Jason Wang.

Speaker #6: And total available capacity will remain flat for the coming quarter. On the last page of my presentation, our annual CapEx is heading to our budget.

Chitung Liu: On the last page of my presentation, our annual CapEx is heading to our budget number of $1.8 billion, with 90% in 12-inch and 10% in 8-inch. The above is a summary of UMC results for Q3 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. Jason Wang.

Speaker #6: Number of 1.8 billion , with 90% in 12 inch and 10% in eight inch . The above is the summary of UMC results for third quarter of 2020 .

Speaker #6: Five. More details are available in the report, which has been posted on our website. I will now turn the call over to the President of UMC, Mr. Jason Wang.

Speaker #7: Thank you. Good evening, everyone here. I would like to share UMC's third quarter results. In the third quarter, we observed demand growth across most market segments, which drove a 3.4% increase in wafer shipments and improved the utilization rate to 78%.

Jason Wang: Thank you, Chih-Jung. Good evening, everyone. Here, I would like to share UMC's Q3 results. In the Q3, we observed demand growth across most market segments, which drove a 3.4% increase in wafer shipments and improved utilization rate to 78%. In particular, we benefited from a pickup in sales of smartphones and notebooks, driving replenishment orders from customers. Our 22nm technology platform continued to provide us with a differentiation in the market. With the 22nm revenue now accounting for more than 10% of total sales, in 2025 alone, we are projecting over 50 product payoffs, and we expect 22nm contribution will continue to increase in 2026. Aligned up with our strategy of providing customer with highly differentiated specialty technologies, we recently announced the readiness of our 55-nanometer BCD platform.

Jason Wang: Thank you, Chitung. Good evening, everyone. Here, I would like to share UMC's Q3 results. In the Q3, we observed demand growth across most market segments, which drove a 3.4% increase in wafer shipments and improved utilization rate to 78%. In particular, we benefited from a pickup in sales of smartphones and notebooks, driving replenishment orders from customers. Our 22nm technology platform continued to provide us with a differentiation in the market. With the 22nm revenue now accounting for more than 10% of total sales, in 2025 alone, we are projecting over 50 product payoffs, and we expect 22nm contribution will continue to increase in 2026. Aligned up with our strategy of providing customer with highly differentiated specialty technologies, we recently announced the readiness of our 55-nanometer BCD platform.

Jason Wang: Thank you, Chi-Tung. Good evening, everyone. Here, I would like to share UMC's third quarter results. In the third quarter, we observed demand growth across most market segments, which drove a 3.4% increase in wafer shipments and improved the utilization rate to 78%. In particular, we benefited from a pickup in sales of smartphones and notebooks, driving replenishment orders from customers. Our 22-nanometer technology platform continued to provide us with a differentiation in the market, with 22-nanometer revenue now accounting for more than 10% of total sales in 2025 alone. We are projecting over 50 product payables, and we expect 22-nanometer contribution will continue to increase in 2026. Aligned with our strategy of providing customers with highly differentiated specialty technologies, we recently announced the readiness of our 35-nanometer BCD platform.

Speaker #7: In particular , we benefited from a pickup in sales of smartphone and notebooks driving replenishment of customers . Our 22 nanometer technology platform continued to provide us with a differentiation in the market , with 22 nanometer revenue now accounting for more than 10% of the total sales in 2025 alone .

Speaker #7: We are projecting over 50 product labels, and we expect the 22-nanometer contribution will continue to increase in 2026. This aligns with our strategy of providing customers with highly differentiated specialty technologies.

Speaker #7: We recently announced the readiness of our 55 nanometer VCP platform . In addition to mobile and consumer applications . The new platform is also complemented with the most rigorous automotive standards for automotive and industrial use .

Jason Wang: In addition to mobile and consumer applications, the new platform is also complemented with the most rigorous automotive standards for automotive and industrial use. Looking ahead to the fourth quarter, we are anticipating wafer shipment to be comparable with third quarter's volume, wrapping up 2025 with shipment growth in the low teens. UMC continues to deliver competitive process technologies that enable diverse applications, which position the company to benefit from a broad-based market recovery. With a 22-nanometer logic and specialty platform in particular, we expect to drive growth. Now, let's move on to fourth quarter 2025 guidance. Our wafer shipment will remain flat. ASP in US dollar will remain firm. Gross margin will be approximately in the high 20% range. Capacity utilization rate will be in the mid-70% range. Our 2025 cash-based CAPEX budget will remain unchanged at $1.8 billion. That concludes my comments. Thank you all for your attention.

Jason Wang: In addition to mobile and consumer applications, the new platform is also complement with the most rigorous automotive standards for automotive and industrial use. Looking ahead to Q4. We are anticipating wafer shipment to be comparable with Q3's volume, wrapping up 2025 with the shipment growth in the low teens. UMC continues to deliver competitive pro-process technologies that enable diverse applications, which position the company to benefit from a broad-based market recovery. With a 22nm logic and specialty platform, in particular, we expect to drive growth. Now, let's move on to Q4 2025 guidance. Our wafer shipment will remain flat. ASP in US dollar will remain firm. Gross margin will be approximately in the high 20% range. Capacity utilization rate will be in the mid-70% range. Our 2025 cash-based CapEx budget will remain unchanged at $1.8 billion.

Speaker #7: Looking ahead to the fourth quarter , we are anticipating wafer shipments to be a comfortable with third quarter volume ramping up 2025 with a shipment growth in the low teens .

Speaker #7: UMC continues to deliver competitive process technologies that enable diverse applications, which position the company to benefit from a broad-based market recovery.

Speaker #7: With a 22 mm logic and specialty platform in particular, we expect to drive growth. Now, let's move on to Q4 2025.

Speaker #7: Guidance . Our wafer shipment will remain flat . ASP in US dollar will remain firm . Gross margin will be approximately in the high 20% range .

Speaker #7: Capacity utilization rate will be in the mid 70% range . Our 2025 cash based CapEx budget will remain unchanged at US 1.8 billion .

Speaker #7: That concludes my comments. Thank you all for your attention. Now we are ready for questions.

Jason Wang: That concludes my comments. Thank you all for your attention. Now we are ready for questions.

Jason Wang: Now we are ready for questions.

Speaker #4: Yes . Thank you , President Huang . 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 .

Michael Lin: Yes. Thank you, President Wang. 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 1 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, please press star key and number 2 to cancel the question. Thank you. Now please dial star key and number 1 on your keypad if you would like to ask the question. Thank you. First we'll have Mike Yang, Bank of America for questions. Go ahead, please.

Operator: Yes. Thank you, President Wang. 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 1 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, please press star key and number 2 to cancel the question. Thank you. Now please dial star key and number 1 on your keypad if you would like to ask the question. Thank you. First we'll have Mike Yang, Bank of America for questions. Go ahead, please.

[Operator]: Yes, thank you, President Wang. 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 the 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, please press the star key and number two to cancel the question. Thank you. Now, please dial the star key and number one on your keypad if you would like to ask a question. Thank you. First, we'll have Hans Liu, Bank of America Merrill Lynch, for questions. Go ahead, please.

Speaker #4: After you are announced, please ask your question. If you find that your question has been answered before, it is your turn to speak.

Speaker #4: Please press star Key and number two to cancel the question . Thank you . Now please dial Star Key and number one on your keypad .

Speaker #4: If you would like to ask the question . Thank you . First of all , health heart Bank of America . For questions .

Speaker #4: Go ahead please .

Speaker #8: Yes . Hi . Tim , thanks for taking my questions . My first question is regarding the near-term outlook . Could you discuss more in detail on how you see the business by end market is trending into the current quarter ?

[Analyst 1]: Yes. Hi, management team. Thanks for taking my questions. My first question is regarding the near-term outlook. Could you discuss more in detail on how you see the business by end market is trending into the current quarter and fourth quarter? It seems the guidance is above seasonal, just wondering if there's anything driving that. Also, just your initial view into the first half of next year, did you get feedback from your customers on the potential restocking? In general, they are still pretty conservative at this stage? Thank you.

Mike Yang: Yes. Hi, management team. Thanks for taking my questions. My first question is regarding the near-term outlook. Could you discuss more in detail on how you see the business by end market is trending into the current quarter, in Q4? It seems the guidance is above seasonal, so just wondering if there's anything driving that. Just your initial view into 1st half next year. Did you get any feedback from your customers on the potential restocking? They are still pretty conservative at this stage. Thank you.

Speaker #8: In the fourth quarter? It seems the guidance is above seasonal. So, just wondering if there's anything driving that. And also just your initial view into the first half of next year.

Speaker #8: Did you get feedback from your customers on the potential restocking, or in general, are they still pretty conservative at this stage? Thank you.

Speaker #7: Sure . I mean , what are we going into Q4 ? We can as I said , we wrap up the 2025 shipment to a low teens .

Jason Wang: Sure. I mean, while we're going into the Q4, as I said, we wrap up the 2025 shipment to a low teens. Is now that we project the 2025 shipment growth was supported by our differentiated 22nm technology and other specialty offerings across both 12-inch and 8-inch amid a broad-based market demand recovery. On the 12-inch side, shipment growth was driven by a strong momentum from 22nm logic for ISP, Wi-Fi connectivity, as well as the high-end smartphone display driver IC. In addition to 22nm and 28nm, overall 12-inch wafer shipment, the will outpace our addressable market, you know, due to our comprehensive value-added specialty portfolio of non-volatile memory, RF SOI, and the BCD.

Jason Wang: Sure. I mean, while we're going into Q4, we can, as I said, we wrap up the 2025 shipment to a low teens. It's now that we project the 2025 shipment growth will be supported by our differentiated 22-nanometer technology and other specialty offerings across both 12 and 8-inch, amid a broad-based market demand recovery. On the 12-inch side, shipment growth was driven by a strong momentum from 22-nanometer logic for ISP, Wi-Fi connectivity, as well as the high-end smartphone display driver IC. In addition to 22 and 28 overall 12-inch wafer shipment, it will outpace our addressable market due to our comprehensive value-added specialty portfolio of non-volatile memory, RFSOI, and the BCD. On the 8-inch side, we expect a high single-digit growth in 2025, mainly led by the PMIC and LDDI.

Speaker #7: Is now that we projected 2025 shipment growth , it was supported by our differentiated 22 nanometer technology and other specialty offerings across both 12 and eight inch amid a broad based market demand recovery .

Speaker #7: On the 12 inch side , shipment growth was driven by a strong momentum from 22 nanometers . Logic for ISP Wi-Fi connectivity , as well as the high end smartphone display driver .

Speaker #7: I see . In addition to 22 and 28 overall , 12 inch wafer shipment , the will outpaced our addressable market . You know , due to our comprehensive value added specialty portfolio , non-volatile memory , and the PC on the eight inch side , we expect the high single digit growth in 2025 , mainly led by the PMI and LDI .

Jason Wang: On the 8-inch side, we expect a high single-digit growth in 2025, mainly led by the PMIC and the LDDI. In summary, the strength of 22nm and the specialty process across those 12-inch and 8-inch platform underpin our confidence in achieving a low-teen percentage shipment growth in 2025. For 2025 Q4, the shipment outlook remain flat. If we're looking into the early look of 2026, I think we're still gonna experience some seasonality. If I look at the entire year, despite the ongoing global economic geopolitical uncertainty, we believe our 2025 business growth momentum will continue into 2026, where we expect the wafer shipment will increase year-over-year.

Speaker #7: So in summary , the strength of 22 nanometers and the specialty process across both 12 inch and eight inch platforms underpin our confidence in achieving a low teens percentage growth in 2025 .

Jason Wang: In summary, the strength of 22-nanometer and the specialty process across both 12-inch and 8-inch platforms underpin our confidence in achieving a low-teens % shipment growth in 2025. For 2025 Q4, we remain the shipment outlooks remain flat. If we look into the early look of 2026, I think we're still going to experience some seasonality, but if I look at the entire year, despite the ongoing global economic geopolitical uncertainty, we believe our 2025 business growth momentum will continue into 2026, where we expect the wafer shipment will increase year over year. In addition to the 10th expansion, our 22-nanometer EHIV platform, which is serving the high-end smartphone OLED display driver application, will be one of the key growth engines. We expect the overall 22 and 28-nanometer revenue to achieve double-digit year-over-year growth in 2026.

Speaker #7: So for 2025 Q4 , we remain the shipment outlook remain flat . If we looking into the the early look of the 2026 .

Speaker #7: I think we're still going to experience some seasonality , but if I look at the entire year , I despite the ongoing global economic , geopolitical uncertainty , we believe the the the , the our 2025 business growth momentum will continue into 2026 .

Speaker #7: Well , we where we expect wafer shipment will increase year over year . In addition to from a expansion or 22 EV platform , 22 nanometer EV platform , which is serving the the high end smartphone OLED display , the display driver application will be one of the key growth engines .

Jason Wang: In addition to from a 10 expansion or 22eHV platform, 22nm eHV platform, which is serving the high-end smartphone OLED display to display driver application, will be one of the key growth engine. We expect the overall 22nm and 28nm revenue to achieve double-digit year-over-year growth in 2026. However, there's still going to be some seasonality that we may have to go through. Q1 may be one of the challenging quarter for the year. You know, supported by the strong customer adoption of our 22nm technology. In addition, our technology readiness in RF SOI for smartphone RF front-end device will also fuel our growth in 2026.

Speaker #7: We expect the overall 22 and 28 millimeter revenue to achieve double digit year over year growth in 2026 , however , the still going to be some seasonality that we may have to go through .

Jason Wang: However, there's still going to be some seasonality that we may have to go through, so Q1 may be one of the challenging quarters for the year. Supported by the strong customer adoption of our 22-nanometer technology, in addition, our technology readiness in RFSOI for smartphone RF front-end devices will also fuel our growth in 2026. Besides the growth of the communication segment, we also foresee our enhanced version of PMIC solution will also continue to drive recovery in our 8-inch segment. In 2025, we foresee PMIC business will grow in a high single-digit range, and this growth momentum will extend into 2026. Our effort on enhancing our technology competitiveness, particularly for the PMIC application, has started to yield some tangible results, and that will actually help us to strengthen our position in this market segment and for 2026 growth.

Speaker #7: So Q1 may be the one of the challenging quarter for the year , you know , supported by the strong customer adoption of our 22 nanometer technology .

Speaker #7: In addition , our technology readiness in office solely for the smartphone , RF front end devices will also fuel our growth in 2026 and beside the growth of the communication segment , we also foresee our enhanced version of Pmic solution will come will also continue to drive recovery in our eight inch segment in 2025 , we foresee business will grow in a high single digit range , and this growth momentum will extend into 2026 .

Jason Wang: Beside the growth of the communication segment, we also foresee our enhanced version of PMIC solution will also continue to drive recovery in our 8-inch segment. In 2025, we foresee PMIC business will grow in a high single-digit range, and this growth momentum will extend into 2026. Our effort on enhancing our technology competitiveness, particularly for the PMIC application, have started to yield some tangible results. That will actually help us with the to strengthen our position in this market segment and for 2026 growth. If we look beyond 2026, we'll continue to develop new derivative technology to enhance our differentiator and our competitive enhance our competitive position. Furthermore, we are expanding our addressable market into 12nm FinFET, as you know, and as well as some of the advanced packaging space.

Speaker #7: Our efforts on the enhancing our technology competitiveness , particularly for for the Pmic application , have started to yield some tangible results . And that will actually help us with the the to strengthen our position in this market segment .

Speaker #7: And for 2026 growth , if we look beyond 2026 , we'll continue develop new derivative technology to enhance our differentiated and our competitive competitive enhance our competitive position .

Jason Wang: If we look beyond 2026, we will continue to develop new derivative technology to enhance our differentiated and our competitive position. Furthermore, we're expanding our addressable market into the 12-nanometer thin pad, as you know, as well as some of the advanced packaging space. The UMC technology portfolio is well-positioned to serve a growing demand of the power efficiency optimization, the high bandwidth data transfer, as well as the improved connectivity. I think, in general, we are relatively confident in 2026, but it's still kind of early to go into the quarterly guidance. I hope that.

Speaker #7: Furthermore , we're expanding our addressable market into 12 Naomi , as you know , and as well as the advanced packaging space , the portfolio will technology portfolio , will is well positioned to serve a growing demand of the power efficiency optimization , high bandwidth data transfer , as well as the improved connectivity .

Jason Wang: The ULN portfolio. The technology portfolio is well positioned to serve a growing demand of the power efficiency optimization, the high bandwidth data transfer, as well as to improve the connectivity. I think in general, we are relatively confident in 2026, you know, it's still kind of early to go into the quarterly guidance.

Speaker #7: So I think in general , we are relatively confident in 2026 . But you know , is is still kind of early to go into the the quarterly guidance .

Speaker #7: Yeah .

Speaker #8: Yeah , that's pretty intensive . And I think just a quick follow up to my first question is just when you mentioned the growth momentum could continue into 2026 compared with 2025 , are you are you are you saying that the wafer shipment could actually still be growing by low teens next year at least because you mentioned a lot of growth drivers by applications just now , especially on 22 nanometers , eight nanometer , and also ange .

Mike Yang: Yeah.

Jason Wang: I hope that.

Mike Yang: Yeah. That's pretty defensive. I think just a quick follow-up to my first question is just when you mentioned the growth momentum could continue into 2026, compared with 2025, are you saying that the wafer shipment could actually still be growing by low tens next year, at least? Because you mentioned a lot of growth drivers by applications just now, especially on 22nm, 20nm, and also 8-inch. Just wondering whether you are implying that the wafer shipment could grow by another low tens at least, for 2026.

[Analyst 1]: Yeah, that's pretty intensive. I think just a quick follow-up to my first question is just when you mentioned the growth momentum could continue into 2026 compared with 2025, are you saying that the wafer shipment could actually still be growing by low teens next year, at least? You mentioned a lot of growth drivers by applications just now, especially on 22-nanometer, 28-nanometer, and also 8-inch. I'm just wondering whether you are implying that the wafer shipment could grow by another low teens, at least for 2026.

Speaker #8: So just wondering whether you are implying that the wafer shipment could could grow by another low teens at least for 2026 .

Speaker #7: I mean , we we we're not giving the planned the the the wafer at this at this time . We'll probably be ready to provide you more clarity into Q1 .

Jason Wang: I mean, we're not giving the blended the wafer shipment at this time. We'll have it ready to provide you more clarity into Q1. You know, 22nm and 28nm particularly, yes, I think that when we go into 2026, we're still expecting a double-digit year-over-year growth. Yeah.

Jason Wang: We're not giving the blended wafer shipment at this time. We're probably ready to provide you more clarity into Q1. On 22 and 28 particularly, yes, I think that when we go into 2026, we're still expecting a double-digit year-over-year growth. Yeah.

Speaker #7: But , you know , 22 and 28 , particularly . Yes , I think that when we go into 2026 , we still expecting a double digit year over year growth .

Speaker #7: Yeah .

Speaker #8: Thank you. And then my second question would be on your gross margins trend. I think for the fourth quarter, you guided flat shipment and also pricing.

Mike Yang: Thank you. My second question would be on your gross margins trend. I think for the Q4, you guided flat shipment and also pricing, but foreign exchange seems to be more favorable at this stage. Why does the gross margins does not go higher than the Q3? I'm just curious why that is the case or should we think about high 70% utilization is going to translate into like high 20% gross margins going forward?

[Analyst 1]: Thank you. My same question would be on your gross margins trend. I think for the fourth quarter, you guided it/shipment and also pricing. The FX seems to be, for instance, seems to be more favorable at this stage. Why does the gross margins not go higher than the third quarter? I'm just curious why that is the case, or should we think about high 70% utilization is going to translate into high 20% gross margins going forward?

Speaker #8: But FX seems to be falling. Strange, seems to be more favorable at this stage. So why does the gross margin not go higher than the third quarter?

Speaker #8: I'm just curious why that is the case . Or should we think about high 70% utilization is going to translate into like high 20 percentage gross margins going forward .

Speaker #8: .

Speaker #6: Gross margin in Q3 is actually, in fact, slightly higher than that of the previous quarter. The gross margin also primarily depends on the utilization rate.

Chitung Liu: Our gross margin in Q3 is actually, in fact, slightly higher than that of the previous quarter. The gross margin also primarily depends on utilization rate, ASP, product mix, depreciation, and foreign exchange. As you know, even though the foreign exchange rate may be on a forecast basis, better than forecast, but still appreciate against US dollars, our key receivable currency. Still in our unfavorable situation, as I mentioned earlier, that almost eat up about 3% of our total revenue. We do expect the Q4 of 2025 gross margin still will remain in the bandwidth of high 20% percentage range despite the variables such as our depreciation. We'll still see quarterly increase.

Chi-Tung Liu: Our gross margin in the third quarter is actually, in fact, slightly higher than that of the previous quarter. The gross margin also primarily depends on the traditional rate: ASP, product mix, depreciation, and foreign exchange. As you know, even though the foreign exchange rate may be on a forecast basis better than forecast, it still appreciates against U.S. dollars, our key receivable currency. Still in an unfavorable situation, as I mentioned earlier, that almost eats up about 3% of our total revenue. We do expect the Q4 2025 gross margin will remain in the bandwidth of high 20% range, despite the variables such as our depreciation. We'll still see a quarterly increase. This year, we are facing a 20%+ increase in annual depreciation expenses. I hope that answers your questions.

Speaker #6: ASP product mix , depreciation , and foreign exchange . And as you know , even though the foreign exchange rate may be on a forecast basis better than forecast , but still appreciate against US dollars , our key .

Speaker #6: Receivable currency . So still in unfavorable situation . As I mentioned earlier that almost speed up about 3% or 3% of our total revenue .

Speaker #6: And we do expect the Q4 25 gross margin still will remain in the bandwidth of high 20% percentage range , despite the variables such as our depreciation will still see quarter quarterly increase and this year , we are facing 20% plus increase in annual depreciation expenses .

Chitung Liu: This year, we are facing 20% plus increase in annual depreciation expenses. I hope that answer your questions.

Chitung Liu: This year, we are facing 20%+ increase in annual depreciation expenses. I hope that answer your questions.

Speaker #6: So, I hope that answers your questions.

Speaker #8: Yeah. And then just a relevant follow-up is, in your cost structure, you have been able to manage the other manufacturing cost items quite nicely.

Mike Yang: Yes. Just a relevant follow-up is in your cost structure, you have been able to manage the other manufacturing cost item quite nicely down in Q3, despite the fact that the labor cost is higher, electricity cost is higher, and also the material or even the wafer shipment is slightly higher compared with Q2. Could you just elaborate more detail on how should we think about the other manufacturing costs, which I believe should be mostly variable cost? How should we think about that going to trend? Thank you.

[Analyst 1]: Yeah. A relevant follow-up is in your cost structure. You have been able to manage the other manufacturing cost item quite nicely down in the third quarter, despite the fact that the labor cost is higher, electricity cost is higher, and also the material or even the wafer shipment is slightly higher compared with the second quarter. Could you just elaborate in more detail on how should we think about the other manufacturing costs, which I believe should be mostly variable cost? How should we think about that going to trend? Thank you.

Speaker #8: Down in third quarter . Despite the fact that the labor cost is higher , electricity cost is higher , and also the material or even the wafer shipment is slightly higher compared with second quarter .

Speaker #8: So could you just elaborate more detail on that ? How should we think about the other manufacturing costs , which I believe should be mostly variable cost ?

Speaker #8: How should we think about that going to trend ? Thank you .

Speaker #6: So part of our employee compensation is bonus which is based upon profit sharing . So when we have a a better quarter over quarter profit in the third quarter , we do have to factor in higher bonus , which increase the compensation expenses in the third quarter .

Chitung Liu: Part of our employee compensation is bonus, which is based upon profit sharing. When we have a better quarter-over-quarter profit in Q3, we do have to factor in higher bonus, which increase the compensation expenses in Q3.

Chi-Tung Liu: Part of our employee compensation is a bonus, which is based upon profit sharing. When we have a better quarter-over-quarter profit in the third quarter, we do have to factor in a higher bonus, which increases the compensation expenses in the third quarter.

Speaker #8: But you are still down compared with second quarter . So I was just wondering if there's any reason driving that decline . And would that trend continue ?

Mike Yang: It was still down compared with Q2. I was just wondering if there's any reason driving that decline and would that trend continue?

[Analyst 1]: It was still down compared with the second quarter. I was just wondering if there's any reason driving that decline, and would that trend continue?

Mike Yang: It was still down compared with Q2. I was just wondering if there's any reason driving that decline and would that trend continue?

Speaker #6: No, no, the trend will not continue. You will fluctuate along with our rolling profit recognition.

Chitung Liu: No, the trend will not continue. It will fluctuate along with our rolling profit recognition.

Chi-Tung Liu: No, the trend will not continue. It will fluctuate along with our rolling profit recognition.

Speaker #8: Thank you . That's pretty clear . Thanks .

Mike Yang: Thank you. That's pretty clear. Thanks.

[Analyst 1]: Thank you. That's pretty clear. Thanks.

Speaker #4: Thank you . Next one , Charlie Chan , Morgan Stanley , go ahead please .

Michael Lin: Thank you. Next one, Charlie Chen, Morgan Stanley. Go ahead, please.

Operator: Thank you. Next one, Charlie Chen, Morgan Stanley. Go ahead, please.

Jason Wang: Thank you. Next one, Charlie Chen, Morgan Stanley. Go ahead, please.

Charlie Chan: Hi, Jason, Qidong, and congratulations for very strong results especially on the gross margin side. Uh, so maybe, uh, starting with the so-called geopolitical uncertainty. So, uh, Jason, can you, uh, elaborate a little bit what kind of, uh, macro uncertainty you see will continue in two thousand twenty-six? And I was asked by, uh, one of your customers about, uh, there seems to be some, uh, spec-speculation about semi-tariff may come, uh, next January. So, uh, any, uh, kind of, uh, impact, potential impact to your business or operation? And also another, uh, geopolitical uncertainty, uh, it was a couple weeks ago, right? The rare earth, uh, kind of supply. Uh, uh, does your, your, your, your team, uh, run through some, uh, analysis about the potential impact if, uh, rare earth will be, uh, res-restricted again? Thank you.

Charlie Chan: Hi, Jason, Qidong, and congratulations for very strong results especially on the gross margin side. Uh, so maybe, uh, starting with the so-called geopolitical uncertainty. So, Jason, can you, uh, elaborate a little bit what kind of, uh, macro uncertainty you see will continue in 2026? And I was asked by, uh, one of your customers about, uh, there seems to be some, uh, spec-speculation about semi-tariff may come, uh, next January. So, uh, any, uh, kind of, uh, impact, potential impact to your business or operation? And also another, uh, geopolitical uncertainty, uh, it was a couple weeks ago, right? The rare earth, uh, kind of supply. Uh, uh, does your, your, your, your team, uh, run through some, uh, analysis about the potential impact if, uh, rare earth will be, uh, res-restricted again? Thank you.

[Analyst 2]: Hi, Jason Wang. Congratulations for very strong results, especially on the gross margin side. Maybe starting with the so-called geopolitical uncertainty. Jason, can you elaborate a little bit what kind of macro uncertainty you see will continue in 2026? I was asked by one of your customers about there seems to be some speculation about semi-terror may come next January. Any kind of potential impact to your business or operation? Also, another sort of uncertainty, it was a couple of weeks ago, right, the rare earth kind of supply. Does your team run through some analysis about the potential impact if rare earths will be restricted again? Thank you.

Speaker #9: Congratulations for very strong results , especially on the gross margin side . So maybe starting with the so-called geopolitical uncertainty . So , Jason , can you elaborate a little bit ?

Speaker #9: What kind of macro uncertainty you see ? Will continue in 2026 ? And I was asked by one of your customers about there seems to be some speculation about semi tariff may come next January .

Speaker #9: So, any kind of potential impact to your business or operation, and also another uncertainty. It was a couple of weeks ago, right?

Speaker #9: The rare earth kind of supply does your your your team run through some analysis about the potential impact ? Of rare Earth will be restricted ?

Speaker #9: Again , thank you .

Speaker #7: Sure . A couple of things , right ? I mean , you mentioned about geopolitical dynamics from from the terrorists . So maybe let's start from the tariff .

Jason Wang: Sure. Couple things, right? I mean, you mentioned about geopolitical dynamics on this tariff. Maybe I start up on the tariff first.

Jason Wang: Sure. A couple of things, right? I mean, you mentioned about geopolitical dynamics from the tariffs. Maybe I'll start from the tariffs first. We do understand there are uncertainties and risks from the potential impact of tariffs, and we will remain cautious of those potential business impacts and will be mindful in our business planning going into 2026. At this current point, we haven't seen anything yet, but we are cautious. Amidst the uncertainties, we'll also continue to focus on the fundamentals of our business, that is the technology differentiation, manufacturing excellence, and the customer trust to further strengthen our competitive position. I think we still have to go back to the fundamentals. For United Microelectronics Corporation, to address the geopolitical concerns, I do believe that United Microelectronics Corporation has a geo-diversified manufacturing site across the globe. The global semiconductor landscape is evolving.

Speaker #7: First . We we we do understand they are uncertainties and risks from the potential impact of tariffs . And we will remain cautious of those potential business impact and will be mindful in our business planning going into 2026 at this current point , we haven't seen anything yet , but we are cautious .

Charlie Chan: Yeah.

Jason Wang: We do understand there are uncertainties and risks from the potential impact of tariffs, and we will remain cautious of those potential business impacts, and we'll be mindful in our business planning going into 2026. At this current point, we haven't seen anything yet, but we are cautious. Amidst the uncertainties, we'll also continue to focus on the fundamental of our business. That is the technology differentiation, manufacturing excellence, and the customer trust to further strengthen our competitive position. I think we still have to go back to the fundamentals. For UMC to address the geopolitical concerns, I do believe that UMC has a geo-diversified manufacturing sites across the globe. The global semiconductor landscape is evolving.

Speaker #7: The the amidst amidst the uncertainties will also continue to focus on the fundamental business that is the technology differentiation , manufacturing excellence and the customer trust to further strengthen our competitiveness .

Speaker #7: Competitive position. So I think we still have to go back to the fundamentals for UMC to address the geopolitical concerns.

Speaker #7: I do believe that UMC has a geo-diversified manufacturing site across the growth, and the global semiconductor landscape is evolving. Customer and governance, governance.

Jason Wang: Customer and governance, governments are increasing, emphasize the geographic diversification and supply chain resilience along with the tariff. To address the structural changes and align with the customer needs, our strategic initiative is, you know, including the capacity build-up in Singapore and the US, and are designed to complement our Taiwan facility, will enable us to better support our customers across multiple regions. Over the long term, we are targeting a balanced capacity split between Taiwan and overseas locations, as we welcome any opportunity from our customer, whether this is an impact or opportunity to us, we pop that position ourself and ready for that dynamic changes. Yeah.

Jason Wang: Customers and governments are increasingly emphasizing the geographic diversification and supply chain resilience along with the tariffs. To address the structural changes and align with the customer needs, our strategic initiative, including the capacity buildup in Singapore and the U.S., are designed to complement our Taiwan facility, while enabling us to better support our customers across multiple regions. Over the long term, we are targeting a balanced capacity split between Taiwan and overseas locations as we welcome any opportunity from our customer. Whether this is an impact or opportunity to us, we probably have to position ourselves and be ready for that dynamic changes. Yeah.

Speaker #7: Are increasing . Emphasize the geographical diversification and supply chain resilience , along with the tariff . But to address the structural changes and align with the customer needs , our strategic initiative is , you know , including the capacity build up in the Singapore and the US and our designed to complement our Taiwan facility .

Speaker #7: While enable us to better support our customers across multiple regions over the long term . We are targeting a balanced capacity split between Taiwan and oversea locations as we welcome any opportunity from our customer , whether this is the impact or opportunity to us , we we provide precision ourselves and ready for that dynamic changes .

Speaker #7: Yeah .

Speaker #9: Thank you . So , so specific on tariff . Right . I think we also went through this a discussion last quarter or two quarters ago .

Charlie Chan: Thank you. Steven, specific on semi tariff, right? I think we also went through this discussion last quarter or two quarters ago. Do you also hear that next January could be a final implementation of this semi tariff? Secondly, would UMC can get some of the exemption from this semi tariff?

[Analyst 2]: Thank you. Jason, specific on semi-tariffs, right? I think we also went through this discussion last quarter or two quarters ago. Do you also hear that next January could be a final implementation of this semi-tariff? Secondly, would UMC get a sort of exemption from this semi-tariff?

Speaker #9: So, do you also hear that the next generation could be a final implementation of this semi-tariff? And secondly, would UNC be able to get an exemption from this semi-truck?

Speaker #7: Well, I mean your guess will be as good as my guess. So, I'm not gonna guess.

Jason Wang: Well, I mean, your guess will be as good as my guess. I'm not gonna guess here.

Jason Wang: I mean, your guess will be as good as my guess. I'm not going to guess here.

Speaker #9: Here . And watch TV only . Yeah .

Charlie Chan: I watch TV only.

[Analyst 2]: I watch TV only.

Jason Wang: Yeah. We're gonna be cautious about this and we're closely monitoring the progress and developments. The same time, given that we are investing into US, you know, we definitely gonna present our case. You know, there's nothing else to update it here.

Jason Wang: We're going to be cautious about this. We're closely monitoring the progress and developments. At the same time, given that we are investing into the U.S., we're definitely going to present our case. There's nothing else to update here. If there's anything, we will definitely report back.

Speaker #7: So we're going to be cautious about this . And we're closely monitoring the progress . And developments . And . The same time given that we are investing into us .

Speaker #7: So , you know , we definitely going to present our case . But you know there's nothing else to to update it here .

Speaker #7: But if there's anything, we'll definitely report back. Yeah.

Charlie Chan: Mm-hmm.

Jason Wang: If there's anything, we'll definitely report back. Yeah.

Speaker #9: Okay . Gotcha . Thank you . And second question is about the your gross margin sustainability . I know this quarter next quarter , some put in text right .

[Analyst 2]: Okay. Gotcha. Thank you. The second question is about your gross margin sustainability. I know this quarter, next quarter, some puts and takes, right? Just overall, next year, it seems like some of your industry peers, yeah, maybe I just call it TSMC, kind of hike their wafer price. Recently, we are seeing that the backend foundry, though it's not like your industry peer, but it's kind of your downstream supply chain, also attempt to hike the backend foundry service price. What would UMC's kind of thought about potential wafer price hike into next year?

Charlie Chan: Okay. Got you. Thank you. Second question is about your gross margin sustainability. I know this quarter, next quarter, some put in tax, right? Just overall, right? Next year, it seems like some your industry peer... Yeah, maybe I just call it TSMC, kind of hike the wafer price. Recently we are seeing that the backend foundry, although it's not like your industry peer, but it's kind of your downstream supply chain, right? Also attempt to hike the backend foundry service price. What's the UMC's kind of thought about potential wafer price hike into next year?

Speaker #9: But just overall, right next year, it seems like some of your industry peers... Yeah. Maybe I just call it TSMC, kind of hike their prices.

Speaker #9: And recently we are seeing that the back end foundry although it's not like you're in this period , but it's kind of a your downstream supply chain .

Speaker #9: Right . Also attempt to hike the bacon foundry service price . So what's the your uncsa kind of thought about potential with a price hike into next year ?

Speaker #7: Well like she don't mention earlier , margin reflects the result of a ASP loading certain certain variable factors . So let's take the ASP specifically for the ASP outlook .

Jason Wang: Well, like Chih-tung Liu mentioned earlier, the margin reflects the result of the ASP loading certain period of factures.

Jason Wang: Well, like Chitung mentioned earlier, the margin reflects the result of the ASP loading certain period of factures.

Jason Wang: Like Chi-Tung Liu mentioned earlier, the margin reflects a result of the ASP loading certain various factors. Let's take the ASP specifically. For the ASP outlook, our 2025 ASP performance has remained firm amid the dynamic business environments, and it has remained stable at a healthy level throughout the year. We expect the ASP will remain firm in Q4 2025. For the 2026 outlook on ASP, we will provide more detail in the upcoming January 2026 conference call as we are going through some discussion with our customer aligning that. We'll probably have more detail to report in the next conference call.

Charlie Chan: Right.

Jason Wang: Let's take the ASP specifically.

Jason Wang: Let's take the ASP specifically. For the ASP outlook, our 2025 ASP performance has remained firm amid a dynamic business environment, and it has remained stable at a healthy level throughout the year. We expect the ASP will remain firm in Q4 2025. For the 2026 outlook on ASP, we will provide more details in the upcoming January 2026 conference call, as we are going through some discussion with our customer aligning that. We'll probably have more detail to report the next conference call.

Charlie Chan: Mm-hmm.

Jason Wang: For the ASP outlook, our 2025 ASP performance has remained firm amid a dynamic business environment, and it has remained stable at a healthy level throughout the year. We expect the ASP will remain firm in Q4 2025. For the 2026 outlook on ASP, we will provide more details in the upcoming January 2026 conference call, as we are going through some discussion with our customer aligning that. We'll probably have more detail to report the next conference call.

Speaker #7: Our 2025 SP performance has remained firm amid the dynamic business environment, and it has remained stable at a healthy level throughout the year.

Speaker #7: And so and we we expect ASP will remain firm in Q4 2025 . And for the 2026 outlook on ASP , we will provide more detail in the upcoming January 2026 conference call .

Speaker #7: As we are going through some discussion with our customer , aligning that . So we probably have more detail to report next . Next conference call now .

Speaker #9: Okay . And on the cost side , it seems like just just some interpretations that your team want to drive some some cost down .

Charlie Chan: Hmm. Okay. On the cost side, it seems like just the semi industry changes, right? That your team want to drive some costs down. I feel like in most of the components whatsoever, most of what I'm hearing this commodity costs may go up, right? On the cost side, do you have any preliminary outlook for 2026?

[Analyst 2]: Okay. On the cost side, it seems like just that some indicators that your team want to drive some costs down. I feel like most of the components whatsoever, most of what I'm hearing is commodity cost may go up, right? On the cost side, do you have any preliminary outlook for 2026? You know.

Charlie Chan: Okay. On the cost side, it seems like just the semi industry changes, right? That your team want to drive some costs down. I feel like in most of the components whatsoever, most of what I'm hearing this commodity costs may go up, right? On the cost side, do you have any preliminary outlook for 2026?

Speaker #9: But I feel like most of . The components whatsoever , most of what I'm hearing does come out . Cost may go up .

Speaker #9: Right. So on the cost side, do you have any preliminary outlook for 2026?

Speaker #7: You know , we we without getting into Pacific costs you know projection or I , I think we can we can probably update you about the the view in cost and our .

Jason Wang: You know, without getting into a specific cost, you know, projection.

Jason Wang: Without getting into a specific cost projection or outlook, I think we can probably update you about the view in cost, our view in cost about cost. Cost competitiveness is always a mutual goal for us and our suppliers together. In order to be competitive, we're closely working with our suppliers. We'll continue to strive towards cost saving in 2026. That has been going on for many years, but we are continuing to do that into 2026. That includes the combination of both internal and external efforts. It's not only working with the supplier. It's also internal efforts. For example, we have already started leveraging some intelligent manufacturing systems and AI technologies internally to enhance our fab efficiency, enabling our long-term operational competitiveness. That's also a major piece of driving our cost scope. I think there's many of the initiatives that we're deploying and working with the suppliers.

Charlie Chan: Right.

Jason Wang: outlook, I think we can probably update you about the view in cost, you know.

Jason Wang: Outlook, I think we can probably update you about the view in cost, you know. About cost. Cost competitiveness is always a mutual goal for us and our suppliers together, in order to be competitive. We're closely working. With our suppliers. We'll continue to drive towards cost saving in 2026, that has been going on for many years, we are continue to doing that into 2026. That includes the combination of both internal and external efforts. It's not only working with the supplier, it's also internal efforts. For example, we have already started leveraging some smart manufacturing and AI technologies internally to enhance our fab efficiency and enabling our long-term operational competitiveness. That's also a major piece of, you know, driving our cost goal. I think there's a, you know, many initiatives that we're deploying and working with the supply chain is just one of them. Yeah.

Speaker #7: view cost about cost . Cost competitiveness is is always a neutral goal for us and our supplier together . So in order to be competitive .

Charlie Chan: Hmm.

Jason Wang: About cost. Cost competitiveness is always a mutual goal for us and our suppliers together, in order to be competitive. We're closely working.

Speaker #7: So we closely working with our suppliers , we'll continue to drive towards cost saving in 2026 . And that has been going on for many years .

Charlie Chan: Mm-hmm.

Jason Wang: With our suppliers. We'll continue.

Charlie Chan: Mm-hmm.

Jason Wang: To drive towards cost saving in 2026, that has been going on for many years, we are continue to doing that into 2026. That includes the combination of both internal and external efforts. It's not only working with the supplier, it's also internal efforts. For example, we have already started leveraging some smart manufacturing and AI technologies internally to enhance our fab efficiency and enabling our long-term operational competitiveness. That's also a major piece of, you know, driving our cost goal. I think there's a, you know, many initiatives that we're deploying and working with the supply chain is just one of them. Yeah.

Speaker #7: But we are continuing to to to doing that in into 2026 . But but that includes the combination of both internal and external efforts .

Speaker #7: It's not only about working with the supplier; it's also about internal efforts. For example, we have already started leveraging some of the smart manufacturing and AI technologies internally to enhance our fab efficiency and enable our long-term operational competitiveness.

Speaker #7: So that's also a major piece of driving our cost . Cost . So I think there's a you know , many of initiatives that we we're we're deploying and the working with the suppliers , supply chain is just one of them .

Jason Wang: Supply chain is just one of them. Yeah.

Speaker #7: Yeah .

Speaker #9: Okay . Okay . And last one that will be back to , to the Q so I know your company and your team have been running through a lot of strategic or marketing research .

Charlie Chan: Okay. Okay. Last one, I will be back to the queue. I know your company and your team have been running through a lot of strategic or marketing research, right? Recently we pick up one data point that I would like to share with you and also consult your view. Because of the T-glass shortage, right? We start to see tightness of BGA substrate supply. From your perspective or UMC's perspective, would that kind of constrain your some of your customers' demand, for example, the consumer or smartphone SoC demand into 2026?

[Analyst 2]: Okay. Okay. The last one, I will be back to the queue. I know your company and your team have been running through a lot of strategic or marketing research, right? Recently, we picked up one. To that point, I would like to share with you and also consult your view. Because of the T-Glass shortage, we started to see tightening of BT substrate supply. From your perspective, United Microelectronics Corporation's perspective, would that kind of constrain some of your customers' demand, for example, the consumer or smartphone SOC demand into 2026?

Speaker #9: Right? So recently we picked up one data point that I would like to share with you and also consult your view because of the tea glass shortage.

Speaker #9: Right ? We start to see a tendencies of BT substrate supply from from your perspective of Umc's perspective , would that kind of constrain your some of your customers demand for example , the consumer or smartphone SoC demand into 2026 ?

Speaker #7: Well , we really haven't seen that , but we are closely monitoring the entire supply chains resilience . The the current market is driven by this AI momentum .

Jason Wang: Well, we really haven't seen that, but we are closely monitoring the entire supply chain's resilience. The current market is driven by this AI momentum. There are various area demonstrating, you know, potential supply concerns. You know, so far we have not seen any impact to us. Like you said, you know, we all look out there and see if there's going to be any. Meanwhile, we are managing from our internal perspective, we are managing our supply resilience point of view. We wanna ensure the supply assurance and as well as the from both on supply and demand, the supply and demand, as well as the quality standard, and cost. I think that's always been our initiative internally.

Jason Wang: We really haven't seen that, but we are closely monitoring the entire supply chain's resilience. The current market is driven by this AI momentum. There are various areas demonstrating potential supply concerns, but so far, we have not seen any impact to us. Like you said, you know we all look out there and see if there's going to be any. Meanwhile, from our internal perspective, we are managing our supply resilience point of view. We want to ensure the supply assurance as well as both from supply and demand, the supply and demand, as well as the quality standard and cost. I think that's always been our initiative internally. I would just have to say we haven't seen any impact on the recent market dynamic, but it's something always on our radar screen, and we'll continue monitoring it. Yeah.

Speaker #7: So, there are various areas demonstrating, you know, potential supply concerns. But, you know, so far we have not seen any impact to us.

Speaker #7: But like you said you know we we we all look out there and see if there's going to be any . But meanwhile we , we are managing our , our internal perspective .

Speaker #7: We are managing our supply resilience point of view . We want to ensure the supply , assurance and as well as the on supply and demand , supply and demand , as well as the quality standard and cost .

Speaker #7: So I think that's always been our initiative internally . So , so I , I would just have to say we haven't seen any impact from the recent market dynamic , but it's it's it's something always on our radar screen .

Charlie Chan: Mm.

Jason Wang: I would just have to say we haven't seen any impact on the recent market dynamic, but it's something always on our radar screen, and we're continuing monitoring. Yeah.

Speaker #7: And we'll continue monitoring it . Yeah .

Charlie Chan: Yeah. How about smartphone or PC demand recovery, if you have a crystal ball? Do you think that two major segment of the end demand will take a significant recovery next year?

Speaker #9: Yeah . How about how about smartphone or PC demand recovery . If you have crystal ball , do you think that two major segments of the demand will take significant recovery next year ?

[Analyst 2]: Yeah. How about smartphone or PC demand recovery? If you have a crystal ball, do you think that two major segments of the end demand will significantly recover next year?

Charlie Chan: Yeah. How about smartphone or PC demand recovery, if you have a crystal ball? Do you think that two major segment of the end demand will take a significant recovery next year?

Speaker #7: Well , I mean , at least for the Q4 25 , we expect the wafer shipment will remain flat . And the the market is reflect pretty healthy inventory level as well .

Jason Wang: At least for Q4 2025, we expect the wafer shipment will remain flat. The markets reflect pretty healthy inventory levels as well. We see slightly communication segments decline in our segment, but the computing, consumer, automotive are slightly increased. I'm not sure that's affected by that particular supply issue, but I think it reflects probably more of an end demand associated.

Jason Wang: Well, I mean, at least for the Q4 of 2025, we expect the wafer shipment will remain flat.

Charlie Chan: Right.

Jason Wang: The market reflects pretty healthy inventory level as well.

Speaker #9: The .

Charlie Chan: Right.

Speaker #7: The you know , we see slightly communication segment decline in our segment . But the the computing consumer automotive are slightly increased . So you know , I I'm not sure that's affected by that particular supply issue .

Jason Wang: We see slightly communication segment decline in our segment. The computing consumer automotive are slightly increased. You know, I'm not sure that's affected by that particular supply issue. I think it reflects, you know, probably more of end demand associated.

Speaker #7: I think it reflects, you know, probably more of a demand associated.

Speaker #9: Okay okay . Thanks , Jason . Very very helpful . I'll be back to the Q thank you .

Charlie Chan: Okay. Thanks, Jason. Very helpful. I will be back to the queue. Thank you.

[Analyst 2]: Okay. Thanks, Jason. Very, very helpful. I'll be back to the queue. Thank you.

Charlie Chan: Okay. Thanks, Jason. Very helpful. I will be back to the queue. Thank you.

Speaker #4: Thank you . Next one , Laura Jane Citi , go ahead , please .

Michael Lin: Thank you. Next one, Laura Chang, Citi. Go ahead, please.

Operator: Thank you. Next one, Laura Chen, Citi. Go ahead, please.

Jason Wang: Thank you. Next one, Laura Chen, Citi. Go ahead, please.

Speaker #10: Yes . Hi . Thank you . Thank you for taking my question . My first question is also about the margin outlook . You mentioned that the depreciation costs for this year will up about 20% plus year on year .

Laura Chang: Yes. Hi. Thank you. Thank you for taking my question. My first question is also about the margin outlook. You know, you mentioned that the depreciation cost for this year will up about 20%+ year-over-year. We know that, actually, in the first half, the depreciation cost increased almost like a 30%. Does that means that depreciation cost year-over-year increase trend to slowing down into Q4? With overall your utilization rate and also ASP seems to be resilient and also higher exposure on 20nm, should we looking for some of the potential upside of the growth margin?

Laura Chen: Yes. Hi. Thank you. Thank you for taking my question. My first question is also about the margin outlook. You know, you mentioned that the depreciation cost for this year will up about 20%+ year-over-year. We know that, actually, in the first half, the depreciation cost increased almost like a 30%. Does that means that depreciation cost year-over-year increase trend to slowing down into Q4? With overall your utilization rate and also ASP seems to be resilient and also higher exposure on 20nm, should we looking for some of the potential upside of the growth margin?

[Analyst 3]: Yes. Hi. Thank you. Thank you for taking my question. My first question is also about the margin outlook. Chi-Tung, you mentioned that the depreciation cost for this year will up about 20%+ year-on-year. We know that actually, in the first half, the depreciation cost increased almost like 30%. Does that mean that the depreciation cost year-on-year increase trend is slowing down into Q4 with overall your duration rate and also ASP seems to be resilient and also higher exposure on 28-nanometer? Should we be looking for some of the potential upside of the gross margin?

Speaker #10: But we know that actually in the first half the depreciation cost are increased almost like 30% . So does that means that depreciation cost on year increase trend to slowing down into Q4 with overall your utilization rate and also ASP seems to be resilient and also higher exposure on 28 nanometer .

Speaker #10: Should we be looking for some of the potential upside of the gross margin?

Speaker #6: Well , other than depreciation , there are other factors like Jason mentioned . We will have a clearer view on the ASP , which is an important component for the margin equations .

Chitung Liu: Well, other than depreciation, there are other factors. like Jason mentioned, we will have a clearer view on the ASP, which is an important component for the margin equations. just on depreciation alone, yes, the increase magnitude were down to about low teens in the year of 2026 versus 20 something in the 2025. in the previous quarter, we also mentioned either 2026 or 2027 should be the peak of the recent depreciation curve. On that regard, it does provide a good floor for helping our EBITDA margin.

Chi-Tung Liu: Other than depreciation, there are other factors. Like Jason mentioned, we will have a clear view on the ASP, which is an important component for the margin equations. Just on depreciation alone, yes, the increase magnitude will be down to about low teens in the year of 2026 versus 20-something in 2025. In the previous quarter, we also mentioned either 2026 or 2027 should be the peak of the recent depreciation curve. On that regard, it does provide a good floor for helping our EBITDA margin.

Speaker #6: But just on depreciation alone . Yes . The increase magnitude were down to about low teens in the year of 2026 versus 20 something in the 2025 .

Speaker #6: And in the previous quarter . We also mentioned either 26 or 27 should be the peak of the recent depreciation curve . So on that regard , it does provide a good see floor for for helping our EBITDA margin .

Speaker #10: Okay , great . Thank you . And also the second question is I recall that we mentioned about the Interposer business before . We know that the AI demand is surging .

Laura Chang: Okay, great. Thank you. Also, the second question is, I recall that we mentioned about the interposer business before. We know that the AI demand is surging. Just want to understand UMC, do you have any update view on the interposer strategy? Also, we know that UMC also have wafer to wafer technology. Just wondering what's the plan here, and also do you want to further expand the capacities on interposer?

Laura Chen: Okay, great. Thank you. Also, the second question is, I recall that we mentioned about the interposer business before. We know that the AI demand is surging. Just want to understand UMC, do you have any update view on the interposer strategy? Also, we know that UMC also have wafer to wafer technology. Just wondering what's the plan here, and also do you want to further expand the capacities on interposer?

[Analyst 3]: Great. Thank you. The second question is I recall that we mentioned about the interposer business before. We know that the AI demand is surging. I just want to understand, UMC, do you have any updated view on the interposer strategy? We know that UMC also has wafer-to-wafer technology. Just wondering, what's the plan here? Do you want to further expand the capacities on interposer?

Speaker #10: So just want to understand UMC , do you have any updated view on the Interposer strategy . And also we know that UMC also have wafer to wafer technology .

Speaker #10: So, just wondering what’s the plan here? Also, do you want to further expand the capacities on Interposer?

Speaker #7: Well, the latest development in the advanced packaging space is that we will continue preparing our advanced packaging solution for this growing market.

Jason Wang: Well, the latest development on the advanced packaging space, we will continue preparing our advanced packaging solution for this growing market, in association with the energy consumption of the Cloud AI and the Edge AI market. We are developing the 2.5D interposer with the DTC, the deep trench capacitor, and discrete DTC to address the power efficiency requirement in OAI, HPC, PC, notebook and smartphone space. Second, UMC is leveraging the scalable 30 wafer packaging stacking and the TSV to enhance our specialty technology offering. We are in the mass production extremely small form factor for the 5G and 6G RF IC right now by leveraging the wafer-to-wafer stacking technology.

Jason Wang: The latest development on the advanced packaging space is that we will continue preparing our advanced packaging solution for this growing market and associated with the energy consumption of the cloud AI and the edge AI market. For UMC, we are developing the 2.5D interposer with the deep trench capacitor, the deep trench capacitor, and discrete deep trench capacitor to address the power efficiency requirements in all AI, HPC, PC, notebook, and smartphone space. Second, UMC is leveraging the scalable 3D wafer packaging stacking and the TSV to enhance our specialty technology offering. We are in the mass production of extremely small form factor for the 5G and 6G RFIC right now by leveraging the wafer-to-wafer stacking technology. Based on the success of the 5G and 6G RFIC through the wafer-to-wafer stacking, we are also developing memory-to-memory stacking and memory-to-larger stacking service for the high bandwidth computing requirements.

Speaker #7: And in associated with the energy consumption of the core AI and the the AI market for UMC , we we are developing the two and a half D interposer with the DTC , the deep trench capacitor and discrete discrete DTC to address the power efficiency requirement in all AI , HPC , PC , notebook and smartphone space .

Speaker #7: And second UMC leveraging the the scalable 3D wafer to waver packaging , stacking and the TSV to enhance the the our enhance our specialty technology offering .

Speaker #7: We are in the mass production industry extremely small form factor for the 5G and RF right now . By leveraging the wafer stacking technology based on the success of the the 5G and six G , RFI through the the wafer to wafer stacking , we are also developing memory to memory stacking and memory to larger stacking service for the high bandwidth computing requirements .

Jason Wang: Based on the success of the 5G and 6G RF IC, through the wafer-to-wafer stacking, we are also developing memory-to-memory stacking and memory-to-logic stacking service for the high bandwidth computing requirements. Our technology really is associated with the center with the DTC capability and the wafer-to-wafer stacking capability. Right now the still within our current capacity size, there's no expansion plans, but there are a lot of customer interest and engagement in development right now.

Speaker #7: So our technology really associated with the the center , with the DTC capability and the wafer to wafer stacking capability . Right now , the the still still within our current capacity size , there's no expansion planned .

Jason Wang: Our technology really is associated with the center with the deep trench capacitor capability and the wafer-to-wafer stacking capability. Right now, it's still within our current capacity size. There's no expansion planned, but there are a lot of customer interest and engagement in development right now.

Speaker #7: But the there are a lot of customer interest and engagement in development right now .

Speaker #10: Okay. Great. Can you also give us some idea of how this kind of business opportunity is growing in the next few years?

Laura Chang: Okay. Great. Can you also give us some like idea how is that kind of business opportunity growing into the next few years?

Laura Chen: Okay. Great. Can you also give us some like idea how is that kind of business opportunity growing into the next few years?

[Analyst 3]: Okay. Great. Can you also give us some idea how is that kind of business opportunity growing into the next few years?

Speaker #7: I mean, as we anticipated, the cloud AI and the AI market will probably be taking off in the next two years.

Jason Wang: I mean, as we anticipated, the Cloud AI and the Edge AI market will probably taking off in the next 2 years or so. You know, we think preparing those technology capability today will position us well to serve that market when the market comes. I think many customers are engaging in that discussion, exploring the product roadmap at this stage. In terms of actual volume and the ramp up schedule, I would expect it's gonna probably be in late 2026 or sometime in 2027.

Jason Wang: As we anticipated, the cloud AI and the edge AI market will probably take it out in the next two years or so. We think preparing those technology capabilities today will position us well to serve that market when the market comes. I think many customers are engaging in that discussion, exploring the product roadmap at this stage. In terms of the actual volume and the runbook schedule, I would expect it's going to probably be in late 2026 or sometime in 2027.

Speaker #7: So and , you know , so we think preparing those technology capability today will position us well to serve that market . When the market comes up .

Speaker #7: I think many customers are engaging in that discussion , exploring the the product roadmap at this stage . But in terms of the actual volume and the the the ramp up schedule , I would expect it's going to be probably be in late 2026 or or sometime in 2027 .

Speaker #10: Okay . Thank you . That's very clear .

Laura Chang: Okay. Thank you. That's very clear.

Laura Chen: Okay. Thank you. That's very clear.

[Analyst 3]: Okay, thank you. That's very, very clear.

Speaker #4: Thank you . Next one . Sonja Ling , UBS . Go ahead please .

Michael Lin: Thank you. Next one, Sunny Lin, UBS. Go ahead, please.

Operator: Thank you. Next one, Sunny Lin, UBS. Go ahead, please.

Jason Wang: Thank you.

[Analyst 2]: Next one, Sonya Ling, UBS. Go ahead, please.

Speaker #11: Well, good afternoon. Thank you for taking my questions. Congrats on the very good outlook. I'm very glad to see business stabilizing and improving.

Sunny Lin: Well, afternoon. Thank you for taking my questions. Congrats on the very good outlook. Very glad to see business stabilizing and improving. My first question is on the pricing. I understand more specific guidance should be provided in January or in early 2026. I want to get a bit more color on the latest progress on your engagement with the clients. In 2024 and 2025, basically you provided roughly mid-single digit type of price reset for across the board. How should we expect, like going to early 2026, would it be fair to assume that now given the improving supply demand, even if any price decline should be lower than the magnitude in early 2024 and early 2025?

[Analyst 3]: Thank you for taking my questions. Congrats on the very good outlook. Very glad to see business stabilizing and improving. My first question is on the pricing. I understand more specific guidance should be provided in January or in early 2026, but I want to get a bit more color on the latest progress on your engagement with the clients. In 2024 and 2025, basically, you provided roughly a single-digit type of price reset across the board. How should we expect going to early 2026? Would it be fair to assume that now, given the improving supply demand, even if any price decline should be lower than the magnitude in early 2024 and early 2025?

Speaker #11: So my first question is on the pricing . Understand more specific guidance should be provided in January or in early 2026 . But I want to get a bit more color on the latest progress on your engagement with the clients .

Speaker #11: So in 2024 and 2025 , basically you provided roughly mid-single digit type of price reset for across the board . And so how should we expect like going to early 2026 ?

Speaker #11: We be fair to assume that now , given the improving supply demand , even if any price decline should be lower than the magnitude in early 2024 and early 2025 .

Speaker #7: Well , I mean , this is that that's that's definitely I mean , that's our goal , right ? I mean , but while we are still in discussion and aligning with our customer , I can't really quote that .

Jason Wang: Well, I mean, this definitely, I mean, that's our goal, right? I mean, while we are still in discussion and aligning with our customer, I can't really quote that. I have to really see the data before I can comment about it. You know, but, you know, throughout the annual discussions and the task happens, yes, in January, we'll probably continue engaging similar discussion. In terms of magnitude of it, I think it's kinda too early to guide it at this point, yeah.

Charlie Chan: Well, I mean, this definitely, I mean, that's our goal, right? I mean, while we are still in discussion and aligning with our customer, I can't really quote that. I have to really see the data before I can comment about it. You know, but, you know, throughout the annual discussions and the task happens, yes, in January, we'll probably continue engaging similar discussion. In terms of magnitude of it, I think it's kinda too early to guide it at this point, yeah.

Jason Wang: That's definitely our goal, right? While we are still in discussion and aligning with our customer, I can't really quote that. I have to really see the data before I can comment about it. Throughout the annual discussions and the test patterns, yes, in January, we'll probably continue engaging in similar discussions. In terms of the magnitude of it, I think it's kind of too early to guide it at this point. Yeah.

Speaker #7: I have to really see the data before I can comment about it . You know , the but , you know , throughout the , the annual discussions and the test patterns .

Speaker #7: Yes . In in January , we will continue engaging similar discussion . But in terms of the magnitude of I think it's kind of too early to guide it at this point .

Speaker #7: Yeah .

Speaker #11: Got it . Maybe a follow up on the ASP . There are still some concerns that there may be some overhang from LTA expiring in the coming few quarters .

Sunny Lin: llow-up on broad ASP. There are still some concerns that there may be some overhang from LTAs expiring in the coming few quarters that could weigh on your broad ASP. So Jason, could you maybe provide a bit more color on if any impact or that impact is already gone mostly?

Sunny Lin: A follow-up on broad ASP. There are still some concerns that there may be some overhang from LTAs expiring in the coming few quarters that could weigh on your broad ASP. So Jason, could you maybe provide a bit more color on if any impact or that impact is already gone mostly?

[Analyst 3]: Got it. Maybe a follow-up on blended ASP. There are still some concerns that there may be some overhang from LTAs expiring in the coming few quarters that could weigh on your blended ASP. Jason, could you maybe provide a bit more color on if any impact or that impact is already gone mostly?

Speaker #11: That could weigh on your blind ASP . And so , Jason , could you maybe provide a bit more color on if any impact or that impact is already gone ?

Speaker #11: Mostly .

Speaker #7: I mean , LTA is one of the mechanism that , you know , help us and our customers working other partners , you know , not only based on ASP , it's also we we we we based on that providing a mutual commitment for us to put in capacity to support the customer and at the same time , you know , the customer demonstrate some commitment for the for the business engagement .

Jason Wang: I mean, LTA is one of the mechanisms that, you know, help us and our customers working as a partner. You know, not only based on the ASP, it's also, we based on that, providing a mutual commitment for us to put in capacity to support the customer. At the same time, you know, the customer demonstrate some commitment for the business engagement. LTA will continue serving that purpose. While given the market dynamics, we're always working closely with our customer and to support them in gaining market shares without losing the market share and gaining the market shares, and also with the market dynamics, you know, in terms of commercial needs. At the same time, we have to balance in terms of CapEx returns.

Jason Wang: LTA is one of the mechanisms that helps us and our customers working upon this, you know, not only based on the ASP. It's also, we based on that, providing a mutual commitment for us to put in capacity to support the customer. At the same time, you know, the customer demonstrates some commitment for the business engagement. LTA will continue serving that purpose. Given the market dynamics, we're always working closely with our customer to support them in getting market shares without losing the market share and getting the market shares, and also with the market dynamics, you know, in terms of commercial needs. At the same time, we have to balance in terms of the CapEx returns. It is a complicated process and a discussion.

Speaker #7: So LTA , LTA will continue serving that purpose while giving the market dynamics . We always working closely with our customer and to support them and getting market shares without losing market share and gaining the market shares .

Speaker #7: And also with the market dynamics , you know , in terms of commercial needs . So but at the same time , we have to balance in terms of CapEx returns .

Speaker #7: So it it is a complicated process and the discussion and we've been doing that for the past two years , and will continue supporting our customers to to march into that direction , finding the win win solution based off the LTA arrangement .

Jason Wang: It is a complicated process and a discussion, and we've been doing that for the past two years, and we'll continue supporting our customers to march into that direction, finding a win-win solution, based off the LTA arrangement. Yeah.

Jason Wang: We've been doing that for the past two years, and we'll continue supporting our customers to march into that direction of finding a win-win solution based off the LTA arrangement. Yeah.

Speaker #7: Yeah , but .

Speaker #11: The not a .

Sunny Lin: Got it.

[Analyst 3]: Got it.

Speaker #7: Mutual commitment of LTA remains intact . Yeah .

Jason Wang: The mutual commitment of LTA remains intact. Yeah.

Speaker #11: Got it . So maybe one question on 2026 just to make sure that got the right number . So for 2026 . Jason earlier did you mention the target would be to grow business by double digit ?

Sunny Lin: Got it. Maybe one question on 2026, just to make sure that I got the right number. For 2026, Jason, earlier did you mention the target would be to grow business by double-digit?

[Analyst 3]: Got it. Maybe one question on 2026, just to make sure that I got the right number. For 2026, Jason, earlier, did you mention the target would be to grow business by double digits?

Speaker #7: I mentioned about the 22 and 28 millimeter that we expect . The momentum will go into 2026 , and we expect double digit growth year over year .

Jason Wang: I mentioned about a 22 and 28nm that we expect the momentum will go into 2026, we expect a double-digit growth year-over-year. Yes.

Jason Wang: I mentioned about the 22-nanometer technology platform and 28-nanometer technology platform, that we expect the momentum will go into 2026, and we expect a double-digit growth year-over-year. Yes, for the 22-nanometer technology platform and 28-nanometer technology platform, yes.

Speaker #7: Yes . For the . .

Speaker #11: Got it .

Sunny Lin: Got it. Thank you. Maybe a question on Singapore expansion. If any, like, latest update that you could share with us in terms of how quickly the capacities will be ramp in 2026?

Speaker #12: Yes .

[Analyst 3]: Got it. Thank you. Maybe a question on Singapore expansion. If any latest update that you could share with us in terms of how quickly the capacities will be ramped in 2026?

Speaker #11: Thank you. It may be a question on Singapore expansion. So if there are any latest updates that you could share with us in terms of how quickly the capacities will ramp up in 2026.

Speaker #7: We I think the the the the milestone has not changed . We project that the the 12 IP , three production run will start in January 2026 and it will ramp up with a higher volume starting in second half of 2026 .

Jason Wang: I think the milestone has not changed. We project that the Fab 12A P3 production ramp will start in January 2026, and it will ramp up with a higher volume starting in second half of 2026. That milestone schedule remains.

Jason Wang: I think the milestone has not changed. We project that the 12 IP3 production run will start in January 2026, and it will ramp up with a higher volume starting in the second half of 2026. That milestone schedule remains.

Speaker #7: And that that milestone schedule remains .

Speaker #11: Got it . Thank you very much . Maybe last question . So in terms of dividend policy , given the improving cash flow outlook in the coming few years , would the company consider maybe revisiting the dividend policy to change to like absolute cash dividend ?

Sunny Lin: Got it. Thank you very much. Maybe last question. In terms of dividend policy, given the improving cash flow outlook, in the coming few years, would the company consider maybe revisiting the dividend policy, to change to, like, absolute cash dividend? Would that be possible?

[Analyst 3]: Got it. Thank you very much. Maybe last question. In terms of dividend policy, given the improving cash flow outlook in the coming few years, would the company consider maybe revisiting the dividend policy to change to like absolute cash dividend? Would that be possible?

Speaker #11: Would that be possible . ?

Speaker #6: Well, it's not that impossible. But we always try to strike a good balance between the high percentage, high percentage payout ratio, and absolute.

Jason Wang: Well, it's not impossible, we always try to strike a good balance between the high percentage payout ratio and absolute dividends. I think that strategy or that position will continue.

Chi-Tung Liu: It is not impossible, but we always try to strike a good balance between the high % payout ratio and absolute dividends. I think that strategy or that position will continue.

Speaker #6: Dividends. So, I think that strategy or that position will continue.

Speaker #11: Got it. Thank you very much.

Sunny Lin: Got it. Thank you very much.

[Analyst 3]: Got it. Thank you very much.

Speaker #4: Thank you . Next one . Goku Holland JP Morgan . Go ahead please .

Michael Lin: Thank you. Next one, Gokul Hariharan, J.P. Morgan. Go ahead, please.

Operator: Thank you. Next one, Gokul Hariharan, JPMorgan. Go ahead, please.

[Analyst 2]: Thank you. Next one, Gokul Hariharan, JPMorgan. Go ahead, please.

Speaker #13: Yeah . Hi . Thanks for taking my question , Jason . And so just wanted to understand a little bit more on the pricing .

Gokul Hariharan: Yeah, hi. Thanks for taking my question, Jason and Chitung. Just wanted to understand a little bit more on the pricing. I know that you're in pricing negotiations with customers. Could we talk a little bit about 22nm and 28nm? How is the pricing trend there? Do you expect that there is any concession that you may need to make on 22nm and 28nm pricing, or that is going to be reasonably firm? Maybe also the same question on the 8-inch portion of the capacity as well, given some of your competitors are also kind of coming down or kind of exiting some of the 8-inch capacity.

[Analyst 1]: Yeah, hi. Thanks for taking my question, Jason and Chi-Tung. I just wanted to understand a little bit more on the pricing. I know that you're in pricing negotiations with customers. Could we talk a little bit about 22 and 28? How is the pricing trend there? Do you expect that there is any concession that you may need to make on 22 and 28 pricing, or that is going to be reasonably firm? Maybe also the same question on the 8-inch portion of the capacity as well, given some of your competitors are also kind of putting down or kind of exiting some of the 8-inch capacity.

Speaker #13: I know that you're involved in pricing with customers. Could you talk a little bit about 22 and 28? How is the trend there?

Speaker #13: Do you expect that there is any concession that you may need to make on 22 and 28 pricing , or that is going to be reasonably firm and maybe also the same question on the eight inch portion of the capacity as well , given some of your competitors , some of your competitors are also kind of shutting down or kind of exiting some of the eight inch capacity .

Speaker #7: Well , our pricing strategy , you know , being very consistent and we will work closely with our customers and , and , you know , for protecting and getting market shares .

Jason Wang: Well, our pricing strategy, you know, has been very consistent, and we will work closely with our customers and, you know, for attracting and gaining market shares. You know, that remains. That will not change. You know, in the particular number, the ASP guidance, you know, I think it's better that we have all the picture together and to share with you. In terms of pricing strategy and positioning, that has not changed. We do believe that the pricing is a combination of our value proposition, from technology differentiation, manufacturing capability, reliable, you know, capacity, and the, you know, and the diversified manufacturing locations and so on.

Jason Wang: Our pricing strategy has been very consistent, and we will work closely with our customers for protecting and getting market shares. That remains. That will not change. In the particular number, the ASP guidance, I think it's better that we have all the pictures together to share with you. In terms of the pricing strategy and positioning, that has not changed. We do believe that the pricing is a combination of our value proposition from technology differentiation or maybe.

Speaker #7: So , you know , that remains that will not change . So , you know , in the in the particular number , the the the AST guidance , you know , I , I think it's better that we have all the , all the picture together .

Speaker #7: And to share with you, in terms of pricing strategy and positioning, that has not changed. We do believe that the pricing is a combination of our value proposition from technology differentiation and manufacturing capability.

Jason Wang: think it will build the reliable capacity and the, you know, diversified manufacturing locations, so on. We think there's a lot to offer. Along with the mutual commitment from many of the customers, we, you know, we believe that we will strive to a right balance for the pricing discussion. However, again, you know, from the specific, you know, guidance on ASP outlook, I would probably prefer to wait until we finish up. I don't want to mislead you at this point. That goes with, you know, whether it's 22 or 28-nanometer, and as long as the 8-inch, because each technology now has a different market dynamics, and we will work within that dynamics. Meanwhile, you're talking about if we see anything from the 8-inch, you know, opportunity or due to any other of our peers, we don't typically comment about our, you know, competitors.

Speaker #7: Reliable , you know , capacity and the the , you know , and the diversified manufacturing locations . So , so we , we , we think there's a lot to offer .

Jason Wang: We think there's a lot to offer and along with the mutual commitment from many of the customer, we, you know, we believe that we will strike to a right balance for the pricing discussion. However, again, you know, from the specific, you know, guidance on ASP outlook, I will probably prefer to wait until we finish up. I don't wanna mislead you at this point. That goal is, you know, whether it's 22 or 28nm, and as well as the 8-inch, because each technology, you know, has a different market dynamics, and we will work within that dynamics. Yeah.

Speaker #7: And the along with the , the mutual commitment from with many of the customers , we , you know , we we believe that we will strive to a right balance for the the pricing discussion .

Speaker #7: However , again , you know , from the from the Pacific , you know , guidance on ASP outlook , I , I will probably prefer to wait until we finish up .

Speaker #7: I don't want to mislead you at this point . So but and that goal is , you know , whether it's 22 or 28 millimeter .

Speaker #7: And as long as the eight inch bigger each each technology now has a different market dynamics . And we will work within that dynamics .

Speaker #7: Yeah . Meanwhile you're talking about if we see anything from the eight inch , you know , opportunity or due to any other our peers , we don't typically comment about our , competitors .

Jason Wang: Meanwhile, you're talking about if we see anything on the 8-inch, you know, opportunity or due to any other our peers, we don't typically comment about our, you know, competitors. We believe our market share increase in 2025 being at 8-inch, but not just 8-inch, overall 8-inch and 12-inch legacy nodes. We believe those node remains a sweet spot for a wide range of analog-rich products. We'll continue to strengthen our product portfolio, focus on those space, and hopefully we can increase our market shares. We continue to optimize our existing platform and developing new solution to better address that market needs. This is the area that UMC has built some longstanding relationships and trusted relationships with our customers.

Speaker #7: We believe our market share increase . We believe our market share increase in 2025 . In eight inch , but not just eight inch overall , eight inch and 12 inch legacy nodes .

Jason Wang: We believe our market share increases in 2025 in 8-inch, but not just 8-inch, overall 8-inch and 12-inch legacy nodes. We believe those nodes remain the sweet spot for a wide range of analog reach products. We'll continue to strengthen our product portfolio, focus on those space, and hopefully, we can increase our market shares. We continue to optimize our existing platform and develop a new solution to better address that market need. This is the area that United Microelectronics Corporation has built some long-standing relations and trusted relationship with our customers. We believe this structure trend will reinforce our position as a preferred functional partner for customers in this niche. That will actually help us to sustain our, you know, maybe growth in those 8 and 12-inch legacy nodes over the long run.

Speaker #7: And we believe those are and will remain a sweet spot for a wide range of analog reach products. So we'll continue strengthening our product portfolio.

Speaker #7: Focus on those spaces, and hopefully we can increase our market share. We continue to optimize our existing platform and develop a new solution to better address market needs.

Speaker #7: This is the area that UNC has built some long , long standing relationship and trust relationship with our customers . So we believe this trend will reinforce our position as a preferred foundry partners for for customer in this needs .

Jason Wang: We believe this structure trend will reinforce our position as a preferred foundry partners for customer in this needs. That will actually help us to sustain our, you know, maybe growth in both 8-inch and 12-inch legacy nodes over the long run.

Speaker #7: And that will actually help us to sustain our our , you know , maybe growth in both a and 12 inch legacy . Notes .

Speaker #7: Over the long run .

Speaker #13: Got it . Yeah . Clear on the pricing that we can wait for January . But I think just wanted to also ask on the semiconductor section 232 tariffs .

Gokul Hariharan: Got it. Yeah, clear on the pricing that we can wait for January. I think, just wanted to also ask on the semiconductor Section 232 tariffs. How are the discussions with your customers going? Let's say there is a 15% to 20% tariffs on exports, which needs to be offset with any kind of US investment or US capacity that you have. How, how does UMC manage that situation, and which of the investments or if any that can qualify for that kind of an offset? I think for some of your peers, I think that is pretty clear. Just wanted to understand how UMC is considering the situation.

Operator: Got it. Yeah. Clear on the pricing that we can wait for January. I just wanted to also ask on the semiconductor Section 232 tariffs. How are the discussions with your customers going? Let's say there is a 15% or 20% tariff on exports, which needs to be offset with any kind of U.S. investment or U.S. capacity that you have. How does United Microelectronics Corporation manage that situation? Which are the investments, or if any, that can qualify for that kind of an offset? For some of your peers, I think that is pretty clear. I just wanted to understand how United Microelectronics Corporation is considering the situation.

Speaker #13: How are the discussions with your customers going and let's say there is a 15 or 20% tariffs on exports , which needs to be offset with any kind of US investment or US capacity that you have .

Speaker #13: How how does UMC manage that situation ? And which are the investments or if any , that can qualify for that kind of an offset ?

Speaker #13: I think for some of your peers , I think that is pretty clear . But just wanted to understand how how UMC is considering the situation .

Speaker #7: Well , I kind of touched that earlier . Our we have been a very diversified manufacturing . We have a very diversified manufacturing location in the past , and so we we have very , you know , I think we pretty much very complement to the current market dynamic , you know , the the current geographically discussion on diversification , supply chain resilience .

Jason Wang: Well, I kinda, you know, touched that earlier. We have been a very diversified manufacturing location in the past. We have very, you know, I think we pretty much very complement to the current market dynamic. You know, the current geographically discussion on diversification, supply chain resilience. I think our past initiative serves that. We just continue. We may alter that, you know, making some adjustment about that strategy, but, you know, not significantly. For instance, the way, you know, we including building capacity in Singapore and US is very much aligned to that direction.

Jason Wang: I kind of touched that earlier. We have been a very diversified manufacturing location. We have a very diversified manufacturing location in the past. We have a very, you know, I think we pretty much very complement to the current market dynamic. The current geographically discussion on diversification, supply chain resilience, I think our past initiative served that. We'll just continue. We may alter that, you know, making some adjustment about that strategy, but you know, not significantly. For instance, the way we're including building capacity in Singapore and the U.S., it's very much aligned to that direction. Of course, the tariff situation, whether it is, you know, X %, we don't know yet for Taiwan, but we know some areas already, you know, already came out as a 15%, and that's where we have our manufacturing sites.

Speaker #7: I think our path initiative serve that . And so we just continue . We may alter that , you know , making some adjustments , that strategy .

Speaker #7: But you know, not significantly. For instance, we know we are including building capacity in Singapore and the U.S., and it's very much aligned to that direction.

Jason Wang: you know, of course, the tariff situation, whether it is, you know, X percent, we don't know yet for Taiwan, but we know some areas already, you know, already came out as a 15% and which that's where we have our manufacturing sites. Customers are in discussion, in interest of make sure that they have access to those facilities and to those locations. We are definitely entertaining that conversation, in a manner of growing our business engagement. We hope that become more of an opportunity to us, not just a negative impact. Now, for some area that is not clear yet, we have to navigate through that.

Speaker #7: You know , of course , the tariff situation , whether it is , you know , X percentage , we don't know yet for Taiwan , but we know some areas already , you know , already came out as a 15% and which that's where we have our manufacturing sites .

Jason Wang: You know, of course, the tariff situation, whether it is, you know, X%, we don't know yet for Taiwan, but we know some areas already, you know, already came out as a 15% and which that's where we have our manufacturing sites. Customers are in discussion, in interest of make sure that they have access to those facilities and to those locations. We are definitely entertaining that conversation, in a manner of growing our business engagement. We hope that become more of an opportunity to us, not just a negative impact. Now, for some area that is not clear yet, we have to navigate through that.

Speaker #7: So, customers are in discussion in interest of, you know, making sure that they have access to those facilities and to those locations.

Jason Wang: Customers are in discussion in interest of, you know, make sure that they have access to those facilities and to those locations. We are definitely entertaining that conversation in the manner of growing our business engagement. We hope that becomes more of an opportunity to us, not just a negative impact. For some areas that is not clear yet, and we have to navigate through that, it's our belief that, you know, we have very smart people in this industry. Despite, you know, which direction it goes, we will navigate through this process and finding a win-win solution for mutual benefits.

Speaker #7: So we we are definitely entertaining that conversation in a in a manner of growing our business engagement . So we hope that becomes more of a opportunity to us , not just a negative impact .

Speaker #7: Now , for some area that is not clear yet . And we have to navigate through that . I you know , it's our belief that , you know , we have a very smart people in this industry .

Jason Wang: I, you know, it's our belief that, you know, we have very smart people in this industry and, you know, despite, you know, how which direction it goes, we will navigate through this process. Yeah. Finding a win-win solution-

Speaker #7: And , you know , despite , you know , how which direction it goes , we will navigate through this process .

Speaker #12: Yeah .

Speaker #7: And finding a win win solution .

Speaker #12: At this .

Gokul Hariharan: And just-

Gokul Hariharan: And just.

Speaker #7: Mutual benefits .

Jason Wang: Of mutual benefits. Yeah.

Speaker #13: Yeah . Just following . Yeah . Just following up on that Jason I think geographical diversification is one aspect , but also the second aspect is US capacity , right ?

Operator: Yeah. Just following up on that, Jason, I think geographical diversification is one aspect, but also the second aspect is U.S. capacity, right? Is your understanding that your 12 nanometer collaboration with Intel kind of counts as a U.S. investment and U.S. capacity, given I think the total investment is actually quite small, even though you are actually shouldering a lot of the technology-related tasks?

Gokul Hariharan: Just following, just following up on that, Jason, I think geographical diversification is one aspect, but also the second aspect is US capacity, right? Is your understanding that your 12nm collaboration with Intel kind of counts as a US investment and US capacity, given I think the total investment is actually quite small, even though you are actually shouldering a lot of the technology related debt?

Speaker #13: So is your understanding that your 12 nanometer collaboration with Intel kind of counts as US investment and US capacity given ? I think the total investment is actually quite small , even though you are actually shouldering a lot of the technology related tasks .

Speaker #7: Well , I mean , I , I , I , I can't comment about this small but the investment is investment and we are putting capacity in the US and the , the , the starting point of a toenail meters only lays a solid foundation for us to explore , maybe even other collaboration opportunities as well .

Jason Wang: Well, I mean, I can't comment about the big or small, but the investment is investment, and we are putting capacity in the US. The starting point of the 12 nanometers only lays a solid foundation for us to explore maybe even other cooperation opportunity as well. That also if there's anything to update, we will update you, but that could also representing even more investment, right? It's just we're not ready to update you anything yet. Even I look at a 12 nanometer today, that is a quite significant in terms of investment.

Jason Wang: I can't comment about the figure of small, but the investment is investment, and we are putting capacity in the U.S. The starting point of the 12-nanometer only lays a solid foundation for us to explore maybe even other collaboration opportunities as well. If there's anything to update, we will update you, but that could also represent even more investment, right? We're not ready to update you anything yet. Even I look at the 12-nanometer today, that is quite significant in terms of investment.

Speaker #7: So that also once if there's anything to update , we will update you . But that could also representing even more investment , right .

Speaker #7: So, but we're just not ready to update you on anything yet. But even I look at the 12 millimeters today. That is quite significant in terms of investment.

Speaker #12: Yeah .

Speaker #13: You got it . Maybe one last question on the advanced packaging bit . I think you last time updated , I think around six or so of wafer capacity for 2.5 d .

Gokul Hariharan: Got it. Maybe one last question on the advanced packaging bit. I think you last time updated, I think around 6K or so of wafer capacity for 2.5D IC packaging. Is that still where we are in terms of the capacity? For your 2.5D packaging with differential faster, what is the application? Is it slightly different application that you are targeting compared to the mainstream market, and that's why you're kind of waiting on the capacity expansion while the industry is still like really asking for a lot of capacity?

Operator: Got it. Maybe one last question on the advanced packaging bit. I think you last time updated, I think around 6K or so of wafer capacity for 2.5D IC packaging. Is that still where we are in terms of the capacity? For your 2.5D packaging with the deep trench capacitor, what is the application? Is it a slightly different application that you are targeting compared to the mainstream market? That's why you're kind of waiting on the capacity expansion while the industry is still really asking for a lot of capacity.

Speaker #13: I see packaging. Is that still where we are in terms of the capacity? And for your 2.5 packaging with deep branch capacitor, what is the application?

Speaker #13: Is it a slightly different application that you are targeting compared to the mainstream market? And is that why you're kind of waiting on the capacity expansion?

Speaker #13: While the industry is still like really asking for a lot of capacity .

Speaker #7: For the 22.5 d intervals , six K today is the stays . They're there is no expansion plan beyond that . Given the the technology roadmap migrating to the DTC .

Jason Wang: Oh, the 2.5D interposer of 6,000 today stays there. There is no expansion plan beyond that. Given the technology roadmap migrating to the DTC, and we're developing the DTC capability. For that, we're serving the AI HPC, PC, notebook, and smartphone space. Our advanced packaging roadmap will center from the DTC, you know, going into.

Jason Wang: Oh, the 2.5D interposer of 6K today stays there. There is no expansion plan beyond that. Given the technology roadmap migrating to the deep trench capacitor, and we're developing the deep trench capacitor capability. For that, we're serving the AI, HPC, PC, notebook, and smartphone space. Our advanced packaging roadmap will center from the deep trench capacitor, going into 2026. Yeah.

Speaker #7: And we're developing the DTC capability and the and for for that we're serving the HPC , PC , notebook and smartphone space . And so our our advanced packaging roadmap was centered , the DTC , you know , going into the 2026 .

Gokul Hariharan: Mm.

Jason Wang: The 2026. Yeah.

Speaker #12: Yeah .

Speaker #13: And would you say that the six K is now fully utilized , or do you still have a lot of slack in that six K capacity right .

Operator: Would you say that the 6K is now fully utilized, or do you still have a lot of slack in that 6K capacity right now?

Gokul Hariharan: Would you say that the 6,000 is now fully utilized, or you still have a lot of slack in that 6,000 capacity right now?

Speaker #14: Now ?

Speaker #7: I mean , the product migrating to DTC , that's why we not expanding the capacity on the the two and a half D right .

Jason Wang: As the product migrating to DTC, that's why we're not expanding the capacity on the 2.5D right now.

Jason Wang: I mean, it's the product migrating to deep trench capacitor. That's why we're not expanding the capacity on the 2.5D right now.

Jason Wang: As the product migrating to DTC, that's why we're not expanding the capacity on the 2.5D right now.

Speaker #12: Now .

Speaker #13: Okay okay . Fair enough . And this DTC capacity how how significant do you think it is going to become in terms of revenues ?

Gokul Hariharan: Okay. Okay. Fair enough. This DTC capacity, how significant do you think it is going to become in terms of revenues? Let's say, I think you were expecting end of 2026 ramp up, so let's say in 2027, is that a fairly significant part of your total portfolio, or is it still going to be quite small, similar to the interposer-related revenues that has been more like a single-digit, low single-digit kind of percentage revenue?

Operator: Okay. Fair enough. This DTC capacity, how significant do you think it is going to become in terms of revenues? Let's say, I think you were expecting end of 2026 ramp-up. Let's say in 2027, is that a fairly significant part of your total portfolio, or is it still going to be quite small, similar to the interposer-related revenues that are more like a single-digit, low single-digit kind of percentage of revenue?

Speaker #13: Let's say I think you were expecting end of 26 ramp up . So let's say in 2027 is that is that is that a fairly significant part of your total portfolio or is it is it still going to be quite small , similar to the Interposer related revenues ?

Speaker #13: That is being more like single-digit, low single-digit kind of percentage of revenue?

Speaker #7: I think it's kind of too early to to predict that , you know , the part of the , the market is associated with the edge AI market and which , you know , we we .

Jason Wang: I think it's kind of too early to predict that. You know, the part of the market is associated with the Edge AI market and which, you know, we have to wait until that has more clarity. I think at this point it's too early to project that. In terms of technology-wise, I think that's definitely the core of the next generation. We need to make sure that we have prepared for it. Yeah.

Jason Wang: I think it's kind of too early to predict that. Part of the market is associated with the edge AI market, which, you know, we have to wait until that has more clarity. I think at this point, it's too early to project that. In terms of technology-wise, I think that's definitely the core of the next generation. We need to make sure that we have prepared for it.

Speaker #12: Have to .

Speaker #7: Wait until that has more clarity . And so I , I think at this point it's too early to project that . But in terms of technology wise , I think that's definitely the core of the next generation .

Speaker #7: So, we need to make sure that we have prepared for.

Speaker #12: It . Yeah .

Speaker #13: Got it. Yeah. Thank you very much.

Gokul Hariharan: Got it. Yeah. Thank you very much.

Operator: Got it. Thank you very much.

Speaker #14: Much .

Speaker #4: Thank you . Next one Janco Venter irritate . Go ahead please .

Jason Wang: Thank you. Next one, Jenko Venter. Arete, go ahead, please.

Michael Lin: Thank you. Next one, Janco Venter, Evercore. Go ahead, please.

Operator: Thank you. Next one, Janco Venter, Evercore. Go ahead, please.

Speaker #15: Hi . Thank you for taking my questions . I just wanted to follow up on on the , you know , investment into the US and just get an update on the state of the PDK and then also we just want to understand the business model around this engagement on 12 nanometer .

Janco Venter: Hi. Thank you for taking my questions. I just wanted to follow up on the, you know, investment into the US and just get an update on the state of the PDK. Also, we just want to understand the business model around this engagement on 12nm. Is it revenue share? Is it profit share? You know, just secondly on that, you know, will it be cannibalistic to the 22nm, 28nm customers as you start migrating to 12nm? Any color that you can add to that to help us just understand this opportunity would be quite helpful.

[Analyst]: Hi. Thank you for taking my questions. I just wanted to follow up on the investment into the U.S. and just get an update on the state of the PDK. I also want to understand the business model around this engagement on 12-nanometer. Is it revenue share? Is it profit share? Secondly, will it be cannibalistic to the 22-nanometer, 28-nanometer customers as you start migrating to 12-nanometer? Any color that you can add to that to help us just understand this opportunity would be quite helpful.

Speaker #15: Is it revenue share . Is it profit share . And then you know , just secondly on that , you know , will it be cannibalistic to the 22 , 28 nanometer customers as you start migrating to 12 nanometer , any color that you can add to that to us , just understand this opportunity would be quite helpful .

Speaker #7: Sure. On the project standpoint, the currently the 12 millimeter cooperation.

Jason Wang: Sure. From a project standpoint, currently the 12 nanometer cooperation with Intel is progressing well and remain on track according to the project milestone. We expect the early PDK will be ready for the first wave of customers in January 2026. Both UMC and Intel are aligning with the customer device specs to facilitate the ramp-up. Overall, the cooperation is proceeding as a schedule, and customer product tape-out is expected at beginning of 2027. That is the update on the 12 nanometers. The business model itself, we are working collaborated together and engaging with the customer. The actual business model that, you know, we've probably not elaborated shares right now. Once the, you know, I think that will be a...

Jason Wang: Sure. From a project standpoint, currently the 12nm cooperation with Intel is progressing well and remain on track according to the project milestone. We expect the early PDK will be ready for the first wave of customers in January 2026. Both UMC and Intel are aligning with the customer device specs to facilitate the ramp-up. Overall, the cooperation is proceeding as a schedule, and customer product tape-out is expected at beginning of 2027. That is the update on the 12nm. The business model itself, we are working collaborated together and engaging with the customer. The actual business model that, you know, we've probably not elaborated shares right now. Once the, you know, I think that will be a.

Jason Wang: Sure. From the project standpoint, currently, the 12-nanometer collaboration with Intel is progressing well and remains on track according to the project milestone. We expect the early PDK will be ready for the first wave of customers in January 2026. Both UMC and Intel are aligning with the customer device specs to facilitate the ramp-up. Overall, the collaboration is proceeding as scheduled, and customer product takeout is expected at the beginning of 2027. That is the update on the 12-nanometer. The business model itself, we are working collaboratively together and engaging with the customer. The actual business model that we've probably not leveraged to share right now. Once the business revenue recognition is ready, we'll update that. The collaboration model is actually fairly structured, but we probably have to report it after we enter production. I think that's the two questions you have, right? Did I miss it?

Speaker #12: Is .

Speaker #7: Intel is progressing well and remain on track according to the project milestone . And we expect the early PDK will be ready for the first wave of customers in January 2026 and the the both UMC and Intel are aligning with the customer device specs to facilitate the the ramp up .

Speaker #7: Overall , the collaboration proceeding as a schedule and customer product table is expected at the beginning of 2027 .

Speaker #12: So that .

Speaker #7: That is the update on the 12m . The business model itself . We are working collaborated together and engaging with the customer and the the the actual business model that , you know , we probably not leveraged to share right now , but once the , you know , I think that will be a the , the business revenue recognition once it's ready , we will update that and and and the collaboration model is actually very structured and but just , you know , we probably have to report it after we enter production .

Jason Wang: The business revenue recognition, once it's ready, we'll update that. The cooperation model is actually very structured and but just, you know, we probably have to report it after we enter production. I think that's the two question you have, right? Did I miss it?

Speaker #7: The . I think that's the two questions you have right . They .

Speaker #15: Yeah .

Janco Venter: Yeah.

[Analyst]: Yeah, that makes sense. Yeah, that's right. Maybe just one follow-up. I think you touched on this earlier. We talked about potentially looking at further investments. Now, if we look at, you know, actually, we're trying to understand if there's scope perhaps to extend this agreement to single-digit nodes because if you look at Intel's business, they fully depreciated 7 nanometers. It seems like an obvious area to extend the agreement. Is this something that you would potentially be looking at, and does that make strategic sense for United Microelectronics Corporation?

Speaker #7: Yeah .

Jason Wang: Yeah.

Speaker #15: That makes sense . Yeah . That right . Maybe just one follow up . And I think you touched on this earlier . We talked about potentially looking at further investments .

Janco Venter: That makes sense. Yeah, that's right. Maybe just one follow-up, I think you touched on this earlier. We talked about potentially looking at further investments. Now, you know, if we look at, you know, actually we're trying to understand if there's scope perhaps to extend this agreement to single-digit nodes, because if you look at Intel's business, they've fully depreciated 7-nanometer, and it seems like an obvious area to extend the agreement. You know, is this something that you would potentially, you know, be looking at, and does that make strategic sense for UMC?

Speaker #15: Now you know , if we look at you know , actually we're trying to understand if there's scope perhaps to extend this agreement to single digit nodes , because if you look at Intel's business , they fully depreciated seven nanometer .

Speaker #15: And it seems like an obvious area to extend the agreement . You know , is this something that you would potentially , you know , be looking at ?

Speaker #15: And does that make strategic sense for UMC ?

Speaker #7: Well , I mean , the yes , the simple answer is yes . Right . And but we have to starting from we have to start from the 12 nanometer .

Jason Wang: Well, I mean, Yes. The simple answer is yes, right? But we have to start it from the 12nm, so we had to make sure that execute well, so we can lay a solid foundation on that. For technology beyond 12nm, we are open to explore the future opportunity through the partnership arrangement that are mutually beneficial. You know, I would say the cooperation with Intel is strengthening UMC strategic position in US significantly and for the US market and also broaden our addressable market while adhering our discipline, the CapEx approach. We are very committed to this partnership. So far the project is the progress is actually progressing well.

Jason Wang: Yes, the simple answer is yes, right? Because we have to start it from the 12 nanometers. We had to make sure that has to do well so we can lay a solid foundation on that. For technology beyond 12 nanometers, we are open to explore the future opportunity through the partnership arrangements that are mutually beneficial. I will say the collaboration with Intel is strengthening United Microelectronics Corporation's strategic position in the U.S. significantly and for the U.S. market and also broaden our addressable market while adhering to our discipline, the CapEx approach. We are very committed to this partnership. So far, the project is, the program is actually progressing well. Yes.

Speaker #7: So we have to make sure . That as well , so we can lay a solid foundation on that for technology beyond 12 nanometer , we are open to explore the the future opportunity through the partnership arrangement that are mutually beneficial .

Speaker #7: You know, I will say the collaboration with Intel is strengthening UMC's strategic position in the U.S. significantly. It is beneficial for the U.S. market and also broadens our addressable market well, aligning with our disciplined CapEx approach.

Speaker #7: So we we are very committed to this partnership and and so far , the project is the program is progressing well . Yes .

Speaker #15: Thank you very much for that.

Janco Venter: Thank you very much for that.

[Analyst]: Thank you very much for that.

Speaker #4: Thank you . Next one , Bruce Lu , Goldman Sachs , go ahead please .

Michael Lin: Thank you. Next one, Bruce Lu, Goldman Sachs. Go ahead, please.

Operator: Thank you. Next one, Bruce Lu, Goldman Sachs. Go ahead, please.

Jason Wang: Thank you. Next one, Bruce Liu, Goldman Sachs. Go ahead, please.

Speaker #16: Go ahead please .

Operator: Bruce Lu, Goldman Sachs. Go ahead, please.

Speaker #17: Hello. Hello. Can you hear me?

Bruce Lu: Hello. Can you hear me?

Rachel Smith: Hello. Can you hear me?

Bruce Lu: Hello. Can you hear me?

Speaker #7: Yes .

Jason Wang: Yes.

Speaker #17: Yes I just want to follow up the for the U.S. collaboration beyond beyond 12mm . What are the showstopper for us to , you know , move beyond , you know , 12 nanometer at the current stage ?

Rachel Smith: Yes. I just want to follow up for the US collaboration beyond 12 nanometers. What are the showstoppers for us to move beyond the 12 nanometers at the current stage? Or do we consider to go backwards to do like relative mature node capacity in the US?

Bruce Lu: Yes. I just want to follow up the, for the US collaboration beyond 12 nanometers. What are the showstopper for us to, you know, move beyond, you know, 12 nanometer at the current stage? Do we consider to, you know, go backwards to do like relative mature, node capacity in US?

Speaker #17: Or do we consider to , you know , go backwards to do like relatively mature ? No . The capacity in U.S. .

Speaker #7: I mean , I that's interesting question , right ? I mean , the the I think when we talk about this collaboration with Intel , strengthen our positioning in the US market , you know , hopefully we're not only limited at 12 nanometers .

Jason Wang: That's interesting question, right? I mean, the I think when we talk about this cooperation with Intel strengthen our positioning in the US market, you know, hopefully we're not only limited at 12 nanometers. You know, if we can have a full potential of this position, that's why we're actually very open to explore the future opportunities. I don't think there's a. I won't call it any showstopper, but I think as long as it's mutually beneficial, I mean, we'll definitely open to explore that. Now, is the exploration limited to the more advanced node or backward? I think we are also open to that. We're not limiting ourself with that consideration.

Jason Wang: That's an interesting question, right? I think when we talk about this collaboration with Intel, it strengthens our positioning in the U.S. market. Hopefully, we're not only limited at 12 nanometers and that, if we can have a full potential of this position. That's why we're actually very open to explore the future opportunities through this. I don't think there's a, I won't call it any showstopper, but I think as long as it's mutually beneficial, we're definitely open to explore that. Now, is the exploration limited to the more advanced node or backward? I think we are also open to that. We're not limiting ourselves with backward.

Speaker #7: And that , you know , if we can have a full , full potential of this , this position and we so that's why we actually very open to explore the future opportunities .

Speaker #7: And through this . So I don't think there's a I , I won't call it any showstopper . But I think as long as it's a mutually beneficial , I mean , we'll , we'll definitely open to explore that .

Speaker #7: Now it's the exploration limited to the more advanced or backward I , I think we are also open to that . We're not limiting ourselves with that .

Speaker #18: Kind of position .

Speaker #17: No , no , just on the question is like it's clearly mutually beneficial , right . So , you know , who has the ball ?

Rachel Smith: No, Jason, the question is that it's clearly mutually beneficial, right? You know, who has the ball? I mean, you know, who doesn't want to move on?

Bruce Lu: No, no, Jason, the question is that it's clearly mutually beneficial, right? You know, who has the ball? I mean, if, you know, who doesn't want to move on?

Speaker #17: I mean, you know, who doesn't want to move on?

Speaker #7: I think the , the there's , you know , in , in any of the engagement , not just the , you know , you require the market validation , you need to make sure you're doing your due diligence .

Jason Wang: I think the, there's, you know, in any of the engagement, not just this, you know, you require the market validation. You need to make sure you're doing your due diligence. I think the, I will probably comment that the, all conversation are open and the due diligence need to be in place before we move forward. It's not really a showstopper. It's not going which sport, is we have to make sure we conduct the appropriate process.

Jason Wang: I think in any of the engagements, not just this, you require the market validation. You need to make sure you're doing your due diligence. I will probably comment that the old conversations are open, and the due diligence needs to be in place before we move forward. It's not truly a showstopper. It's not Boeing which scores. We have to make sure we conduct the appropriate process. Yeah.

Speaker #7: So I think the, I will, I will, I will probably comment that the old conversations are open and the due diligence needs to be in place before we move forward.

Speaker #7: So it's not truly a showstopper. It's not boring. Which score is? We have to make sure we conduct the appropriate process.

Speaker #7: Yeah .

Speaker #17: So so in other words , the prerequisite condition would be that you probably need to deliver 12 nanometers . You know , with like decent size of revenue , decent size of customer profile , customer .

Bruce Lu: In other words, it's like the prerequisite condition would be that you probably need to deliver 12nm, you know, with like decent size of revenue, decent size of customer, then you know, both side might consider to move it on. Is that a right consideration?

Rachel Smith: In other ways, the prerequisite condition would be that you probably need to deliver 12 nanometers with a decent size of revenue, decent size of customer profile, customer. You both might consider to move it on. Is that a right consideration?

Speaker #17: Then you , you , you know , both are might consider to move it on . Is that is that the right consideration .

Speaker #17: .

Speaker #7: Now I , I mean I won't say that it's a prerequisite , but that is one of the important considerations . But more importantly is the if if this collaboration is economically , economically beneficial to both both sides and and so I think the , the once we are more mature and ready and we definitely will update you .

Jason Wang: I won't say that is a prerequisite, but that is one of the important considerations. More importantly, if this collaboration is economically beneficial to both sides. I think that once we are more mature and ready, we definitely will update you. Again, our position on this topic is we are open to that exploration.

Jason Wang: I mean, I won't say that is a prerequisite, but that is one of the important considerations. More importantly is the, if this collaboration is economically beneficial to both sides. I think the once we are more mature and ready, we definitely will update you. Again, our position on this topic is we are open to that exploration.

Speaker #7: But again our position on this topic is we are open to that exploration .

Speaker #17: Okay . So when can we expect to see the meaningful revenue contribution from 12 nanometers ?

Rachel Smith: Okay. When can we expect to see the meaningful revenue contribution from 12 nanometers?

[Analyst]: Okay. When can we expect to see the meaningful revenue contribution from 12 nanometers?

Bruce Lu: Okay. When can we expect to see the meaningful revenue contribution from 12 nanometers?

Speaker #7: Well , I mean , right now for the early product table is going to be in 2027 . And so we we probably going to start seeing some contribution in 2027 .

Jason Wang: Right now for the early product takeout, it's going to be in 2027. We're probably going to start seeing some contribution in 2027, but then ramping after that.

Jason Wang: Well, I mean, right now for the early product takeoff is gonna be in 2027. We're probably gonna start seeing some contribution in 2027, but then ramping after that. Yeah.

Speaker #7: But then ramping after that .

Speaker #17: So I see . Understand . Thank you .

[Analyst]: I see. Understand. Thank you.

Bruce Lu: I see. Understand. Thank you.

Rachel Smith: I understand. Thank you.

Speaker #4: Thank you . And in the interest of time we're taking the last question . Last one Charlie Chan Morgan Stanley . Go ahead please .

Michael Lin: Thank you. In the interest of time, we're taking the last question. Last one, Charlie Chan, Morgan Stanley. Go ahead, please.

Michael Lin: Thank you. In the interest of time, we're taking the last question. Last one, Charlie Chen, Morgan Stanley. Go ahead, please.

Jason Wang: Thank you. In the interest of time, we're taking the last question. Last one, Charlie Chen, Morgan Stanley. Go ahead, please.

Speaker #4: .

Speaker #9: Thanks for taking my follow up question . So it's actually wavefront wafer related . So Jason , can you share with us who could be kind of many partners ?

Charlie Chan: Thanks for taking my follow-up question. It's actually wafer and wafer related. Just can you share with us who could be kind of memory partners? I mean, it seems like it requires a lot of so-called customized design interface, et cetera. Are those are more Taiwanese partners or you have some global top memory partners for wafer on wafer? Secondly, if you can you share some potential kind of end applications and the timing for wafer on wafer? Thank you.

Jason Wang: Thanks for taking my follow-up question. It's actually wafer-to-wafer related. Can you share with us who could be kind of memory partners? It seems like it requires a lot of so-called customized design interfaces, etc. Are those more Taiwanese partners, or do you have some global top memory partners for wafer-to-wafer? Secondly, if you can, can you share some potential kind of end applications and the timing for wafer-to-wafer? Thank you.

Speaker #9: I mean , it seems like it requires a lot of so-called customized design interfaces , etc. . So those are more Taiwanese partners or you have some global top memory , top memory partners for wavefront , wafer .

Speaker #9: And secondly , if if you can , can you share some potential kind of and applications and the timing for wavefront wafer . Thank you all .

Speaker #7: The way the wafer-to-wafer stacking capabilities are developing is significant. We are in mass production for some of the extremely small form factor devices in the IC space.

Jason Wang: On the wafer-to-wafer stacking capabilities, we are in mass production for some of the extremely small form factor devices in the RF IC space. We're talking about that because we believe, you know, if you look at the markets going, and we believe this technology will serve, you know, more than just a small form factor. It provides the option for the memory-to-memory, the larger to larger to memory stacking options. By providing the option to the customer, they say they can explore many different product applications. At this point, the advanced packaging technology is developing into two cornerstone. One is the DTC capability, another is on the wafer-to-wafer stacking capability.

Jason Wang: The wafer-to-wafer stacking capabilities, we are in mass production for some of the extremely small form factor devices in the RFID IC space. We're talking about that because we believe, you know, if you look at where the market's going, and we believe this technology will serve, you know, more than just a small form factor. It provides the option for the memory-to-memory, the larger-to-larger, larger-to-memory stacking options. By providing the option to the customer, they say they can explore many different product applications. At this point, the advanced packaging technology is developing into two cornerstones. One is the DTC capability, and another is on the wafer-to-wafer stacking capability. Once the technology is ready, then we can explore to many different applications.

Speaker #7: The the we we talking about that because we believe , you know , if you look at the the the market's going and we believe this technology will serve , you know , more than just a small small form factor provides the option for the the memory to memory .

Speaker #7: The larger to larger , larger to memory stacking options . So by providing the option to the customer , they say they they they can explore many different product applications .

Speaker #7: So at this point the our advanced packaging technology is developing into two cornerstones . One is the DTC capability , another is on the wafer to wafer stacking capability .

Speaker #7: And then we once the technology is ready , then we can explore to many different applications .

Charlie Chan: Mm.

Jason Wang: Once the technology is ready, we can explore to many different applications.

Charlie Chan: On this wafer-on-wafer, do you see kind of advantage or differentiation to industry or so, for example, TSMC or China's, I'm not sure, maybe XMC, you know? Yeah, any sort of tech differentiation you may have?

Speaker #9: On this wavefront, where do you see kind of advantage or differentiation in this period? For example, TSMC or China’s? I’m not sure.

Jason Wang: On this wafer-to-wafer, do you see kind of an advantage or differentiation to industries, for example, TSMC or China's, I'm not sure, maybe XMC? Yeah, any sort of technology differentiation you may have?

Speaker #9: Maybe . Xmc you know . Yeah . Any any sort of technology differentiation . You may have .

Speaker #7: Well , I mean , the developing differentiated technologies is definitely our mandate . So we we continue driving that technology differentiations . But the same time , you have to make sure that you are part of the ecosystem .

Jason Wang: Developing differentiated technologies is definitely our mandate. We continue driving that technology differentiation. At the same time, you have to make sure that you are part of the ecosystem, you know, where the market is going. We see this from the market standpoint, from the technology product migration standpoint. We believe this is a two very important capability and technology. We're preparing ourselves to get that ready, and then we can start exploring different business opportunities. Yeah.

Jason Wang: Well, I mean, the developing differentiation technology is definitely our mandate. We continue...

Jason Wang: Well, I mean, the developing differentiation technology is definitely our mandate. We continue.

Charlie Chan: Right.

Jason Wang: Driving that technology differentiations. At the same time, you have to make sure that you are part of the ecosystem, you know.

Jason Wang: Driving that technology differentiations. At the same time, you have to make sure that you are part of the ecosystem, you know. Where the market's going.

Speaker #7: You know where the market is going. So we see this from the market standpoint, as well as from the technology product migration standpoint.

Charlie Chan: Mm.

Jason Wang: Where the market's going.

Charlie Chan: Right.

Jason Wang: We see this from a market standpoint, from a technology product migration standpoint, we believe this is a two very important capability and technology. We're preparing ourself and to get that ready, and then we can start exploring different business opportunities. Yeah.

Speaker #7: We believe this is a to a very important capability . And technology . So we'll we're preparing ourselves and to get that ready .

Speaker #7: And then we can start exploring a different business opportunities . Now .

Jason Wang: Got it. Thank you. Looking forward to your next updates.

Charlie Chan: Got it. Thank you. Looking forward to your next updates.

Speaker #9: Thank you . Looking forward to your next update .

Speaker #19: Yeah, sure. Absolutely. Thank you.

Jason Wang: Yeah, sure. Absolutely.

Jason Wang: Thank you.

Speaker #4: Thank you. And ladies and gentlemen, thank you all for your questions. In today’s Q&A session, I’ll turn it over to the UMC Head of IR for closing remarks.

Operator: Thank you. Ladies and gentlemen, thank you all for your questions. That concludes today's Q&A session. I'll turn it over to UMC Head of IR for closing remarks.

Charlie Chan: Thank you.

Michael Lin: Thank you. Ladies and gentlemen, thank you all for your questions. That concludes today's Q&A session. I'll turn it over to UMC head of IR for closing remarks.

Operator: Thank you. Ladies and gentlemen, thank you all for your questions. That concludes today's Q&A session. I'll turn it over to UMC head of IR for closing remarks.

Speaker #5: Thank you for attending this conference today . We appreciate your questions . As always . If you have any additional follow up questions , please feel free to contact IR at UNC .

Rachel Smith: Thank you for attending this conference today. We appreciate your questions. As always, if you have any additional follow-up questions, please feel free to contact ir@umc.com. Have a good day.

Michael Lin: Thank you for attending this conference today. We appreciate your questions. As always, if you have any additional follow-up questions, please feel free to contact ir@umc.com. Have a good day.

Speaker #5: Com. Have a good day.

Speaker #4: Thank you. And ladies and gentlemen, that concludes our conference for the third quarter of 2025. We thank you for your participation in the UMC conference.

Michael Lin: Thank you. Ladies and gentlemen, that concludes our conference for Q3 2025. We thank you for your participation in UMC's conference. There will be a webcast replay within 2 hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Thank you again. Goodbye.

Operator: Thank you. Ladies and gentlemen, that concludes our conference for Q3 2025. We thank you for your participation in UMC's conference. There will be a webcast replay within 2 hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Thank you again. Goodbye.

Operator: Thank you. Ladies and gentlemen, that concludes our conference for third quarter 2025. We thank you for your participation in United Microelectronics Corporation's conference. There will be a webcast replay within two hours. Please visit www.umc.com under the Investors Event section. You may now disconnect. Thank you again. Goodbye.

Speaker #4: There will be a webcast replay within two hours . Please visit WW . Under the investors event section , you may now disconnect .

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