15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip

12. United Microelectronics Corporation (NYSE:UMC) 

United Microelectronics Corporation is an independent semiconductor wafer foundry. The company offers wafer fabrication, circuit design, assembly & testing services, and mask tooling. It provides its products and services to integrated device manufacturers and fabless design companies. The stock is up 2.96% in the last week against the S&P 500’s 1.13% gains. However, it is trading at the same level it was 4 years ago, which is why investors aren’t as keen on the company as other chip stocks.

The recent rally could be because of a 4.17% jump in sales in January. However, there are issues with the company that investors need to know before they jump in based on the current optimism. Last month, the company missed its Q4 estimates and the revenue guidance didn’t excite anyone either. Citi downgraded the stock as a result citing the lack of positive catalysts for the company.

UMC’s guidance for the first quarter includes flat QoQ wafer shipments with a 4-6% decline in gross margins. This suggests the company will report declining QoQ revenues despite an uptick in consumer electronics demand. Similarly, depreciation cost is likely to go up in 2025 and 2026 even though the company expects to reduce its CAPEX by over one-third in 2025. Even though the chart shows a recovering stock price, it may not be a great idea to start taking a position in the stock until more clarity emerges on the company’s growth prospects.