UMC sees resilient chip demand, plans price hikes amid shortages and war

United Microelectronics Corp. used its latest quarterly results to deliver a blunt message to the chip industry: geopolitics is adding noise, but not breaking demand. The Taiwan foundry said it still sees resilient market conditions even as the Iran war and memory-chip shortages inject volatility into supply chains, and it plans to raise wafer prices starting in the second half of the year.

The company said it expects strong wafer shipments in the second quarter, helped by a rebound in communications demand and steady orders from computer, consumer and industrial customers. Chief Executive Jason Wang said the Middle East conflict and the ongoing memory shortage were creating turbulence, but he still expected demand to hold up. That combination of caution and confidence has become a defining feature of the sector as manufacturers navigate tighter logistics, uneven component supply and customer restocking.

Chief Financial Officer Chitung Liu said the planned price adjustment in the second half of 2026 should leave UMC better positioned for 2027, reflecting both supply-demand conditions and continued investment needs. For a company that specializes in mature-node chips rather than the cutting edge, that pricing leverage matters. UMC’s business is tied less to the AI race than Taiwan Semiconductor Manufacturing Co.’s heavy spending on 2-nanometer and 1-nanometer technology, and more to the broad electronics base that powers everyday devices and industrial equipment.

The financial results underscored that durability. UMC reported first-quarter revenue of T$61.04 billion, up 5.5% from a year earlier, and net income of T$16.17 billion, up 108%. The stock has also been a standout in 2026, rising 51% and beating the broader market’s 36% gain, a sign that investors have been rewarding names with visible demand and disciplined pricing even as macro risks rise.

The broader takeaway is that semiconductors remain split between two realities. The most advanced chips are driving enormous capital spending around artificial intelligence, but less glamorous wafer fabrication is still essential to cars, appliances, industrial systems and consumer electronics. UMC’s results suggest that in a year shaped by war, shortages and supply-chain stress, that part of the market remains resilient enough to support higher prices and continued orders.