UMC Stock Surges 5% After Dividend Ex-Date, Defying Market Volatility

Semiconductor foundry UMC (2303-TW) (UMC-US) went ex-dividend today (August 8), distributing approximately NT$2.608 in cash per share. The ex-dividend reference price was NT$152.5, with the stock opening higher at NT$156, quickly filling the ex-dividend gap. Despite early morning volatility that briefly turned the stock negative, it was consistently supported throughout the day, ultimately rising over 5%.

UMC has recently benefited from a significant rebound in demand for mature processes, with current capacity utilization rates rising above 80%. Market expectations suggest that as the second half of the year approaches peak season, and wafer starts for AI-driven power management chips continue to increase, UMC's capacity utilization will further improve. Additionally, the effects of price increases are gradually becoming apparent, leading to expectations that UMC's second-half performance will outperform the first half.

UMC has previously issued a price increase notice, informing customers that starting this month, prices will be raised to address rising raw material costs and the commencement of operations at its new Singapore fab. The price increases primarily target new wafer starts and new processes requested by customers, helping to offset the pressure on gross margins from increased costs. Further price increases are expected to be implemented next year.

UMC's June revenue performance was impressive, reaching a new high in 3 years and 8 months, amounting to NT$23.125 billion. This represents a 0.79% month-over-month increase and a 22.85% year-over-year increase. Second-quarter revenue was NT$68.733 billion, up 12.61% quarter-over-quarter and 16.98% year-over-year. Cumulative first-half revenue was NT$129.771 billion, up 11.28% year-over-year. Benefiting from a significant increase in demand for mature processes, UMC's second-quarter revenue also set a new high for the 15th consecutive quarter.