The Zhitong Finance App learned that at a time when the global semiconductor sector is facing a sharp pullback due to concerns about chip deleveraging and overvaluation, the latest monthly sales data released by foundry giant Lianhua Electronics (UMC.US) has injected a dose of fundamental strength into the panicked Wall Street investors. The company's unaudited consolidated revenue in July reached NT$23.84 billion, a significant year-on-year increase of 18.98% compared with NT$20.04 billion in July 2025. In the first seven months of this year (January to July), UMC's cumulative consolidated revenue reached NT$153.61 billion, an increase of 12.41% over the previous year.
Breaking out of the slump: Revenue growth showed a clear “steep slope”
A careful review of recent monthly data trajectories shows that UMC's business recovery is characterized by a strong “slope acceleration”. After experiencing last year's slump and “low single-digit” year-on-year growth in the first quarter of this year, UMC's monthly revenue growth rate increased rapidly from April (11% year-on-year increase in April, 17.8% in May, and close to 23% in June), and remained at a high level of nearly 19% in July.
This series of accelerated growth data shows that the mature process supply chain has completely escaped the multi-quarter haze of terminal inventory removal. Driven by the peak season for traditional consumer electronics in the second half of the year and the explosion of AI peripheral chips, the cyclical inflection point of the foundry industry has been fully established.
July data fulfilled the Q2 full load guidelines, and capital expenditure bucked the trend
The strong performance of July sales data perfectly confirms the optimistic forward-looking guidance previously given by UMC in its second quarterly report.
In the second quarter conference call, UMC management predicted that, driven by a strong recovery in downstream demand, wafer shipments in the third quarter will achieve a high single-digit month-on-month increase, and the capacity utilization rate will further rise from 85% in the second quarter to more than 90%. Judging from July's impressive revenue report, this full load expectation is being fulfilled quickly.
In terms of financial quality, UMC's Q2 operating profit increased 38.2% year over year to NT$14.95 billion, and gross margin increased to 32.5%. Due to strong confidence in the second half of the year and medium- to long-term orders, UMC has significantly raised its 2026 capital expenditure budget by 25% to US$2 billion, and approved a production expansion plan of approximately US$5 billion over the next few years to expand its Singapore and Tainan plants in stages.
Focus separation: the AI computing power chain is fully spreading towards “mature manufacturing processes”
Faced with the market's previous pessimistic hypothesis that “demand for AI computing power infrastructure has peaked,” UMC's July growth data gave a clear industry explanation, and also prompted the US stock market to re-evaluate the ecological value of mature processes in the AI era.
Analysts pointed out that the current AI arms race has evolved from a simple “GPU core computing power” to a “physical infrastructure constraint.” Although TSMC has a monopoly on advanced manufacturing processes for top-tier AI GPUs, the surge in power consumption and transmission bottlenecks in AI data centers has directly triggered explosive demand for power management chips (PMICs), BCD processes, microcontrollers, high-end sensors, and silicon photonic interconnect chips.
These peripheral key links are exactly where UMC excels. According to UMC's second quarterly report, its 22nm revenue share has reached a record high of 17.5%, and 12-inch silicon photonic chips have also been mass-produced and delivered for the first time. UMC CEO Wang Shi said earlier that the company expects AI-related revenue to reach 300 million US dollars this year and cross the 1 billion US dollar mark within three years.
Real demand vs stock market killing valuation
Recently, the semiconductor sector has been hit hard by macro-liquidity tightening and liquidation of highly leveraged positions. However, UMC's sales data, which accelerated growth in July, formed a cross-validation of the recent strong performance prospects of TSMC, SK Hynix, and Seagate. The data shows that demand for AI infrastructure and electronics at the physical level shows no signs of declining, and the current sharp decline in the market is due more to chip deleveraging and short-term emotional anxiety about return on investment (ROI).
With the release of the July “good start” data, US stock investors will pay close attention to whether UMC can continue to maintain this growth slope in the third quarter, and the increase in capacity utilization will further drive the company's overall pricing power and gross margin.