A strong signal of chip demand recovery! Focus on mature process United Microelectronics Corp. Sponsored ADR (UMC.US) annual revenue regains growth.

United Microelectronics Corp., focusing on mature chip processes such as 14nm and 28nm, announced its latest operating data on Tuesday. The chip manufacturer from Taiwan, China, achieved revenue of NT$18.97 billion in December, an 11.7% year-on-year increase. More importantly, after a significant 20% decline in annual revenue in 2023, United Microelectronics Corp. has resumed its growth trend in 2024. The data shows that from January to December, United Microelectronics Corp. achieved a total revenue growth of 4.39%, reaching approximately NT$232.3 billion. For United Microelectronics Corp., achieving growth for the full year of 2024 was not easy. The prolonged downturn in demand caused by excess inventory of mature process chips since the end of 2022 has severely affected United Microelectronics Corp.'s performance since 2023, with revenue declining significantly for several quarters. In addition, with extremely weak demand for "non-AI chips" in 2023, the total revenue plummeted. The growth in performance of United Microelectronics Corp. in 2024, focusing on mature processes, largely indicates that the overall demand for mature process chips above 14nm is recovering. This signals a departure from the prolonged period of weak demand over the past two years in the chip industry, moving towards a period of recovery and prosperity. Unlike the "chip foundry king" Taiwan Semiconductor Manufacturing Co., Ltd., which focuses on the most advanced chip process technologies (such as 5nm, 4nm, and 3nm), United Microelectronics Corp. offers mature process technologies ranging from 14nm to 28nm and larger values, focusing on mature process nodes. These chip products based on United Microelectronics Corp.'s mature nodes are widely used in the communication, consumer electronics, automotive electronics, and industrial sectors, focusing on stable and cost-effective mature nodes to meet the overall demand in traditional industrial sectors and mid-range consumer electronics markets. This is why some analysts believe that after the outbreak of demand for data center AI chips, the performance data of United Microelectronics Corp. can better represent the "demand situation" of the entire chip industry compared to Taiwan Semiconductor Manufacturing Co., Ltd. The analyst team of Wall Street financial giant Bank of America Corp recently stated in a report that chip stocks are still likely to be one of the most outstanding sectors in the US stock market in 2025. The contribution to the rally is expected to expand from the "AI chip three giants" benefitting from the AI boom to include analog chips and electric vehicle chip stocks, which have long lagged behind the performance of the US stock market and the Philadelphia Semiconductor Index. "After the sharp rise, there is still a lot of room for upside in chip stocks, and we believe that in 2025, two different upward trend curves will emerge," wrote the team led by Bank of America Corp analyst Vivek Arya in the chip stock research report. "In the first half of the year, investments in artificial intelligence driven by US cloud computing super customers and the deployment scale of NVIDIA Corporation's Blackwell architecture AI GPU will maintain the upward momentum of chip companies closely related to AI. In the second half of the year, if the global economy continues to recover, the focus of the market may shift to inventory replenishment and automotive production recovery, which means that long-neglected and significantly underperforming automotive/industrial chip manufacturers may regain favor with investors." The Bank of America-led analyst team also stated that overall, semiconductor market sales are expected to increase by about 15% in 2025, reaching $725 billion, building on the strong growth in 2024. "This is still a very strong growth pace, although it is slightly lower compared to the forecasted 20% growth rate this year. The demand boom cycle of the semiconductor market typically lasts about 2.5 years (followed by a decline cycle lasting about 1 year), and we are currently only in the mid-term phase of this semiconductor upturn cycle that began in [the fourth quarter of 2023]."