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# UMC Expects Blended Chip Prices To Rise About 10% In 2027, Ending Years Of Erosion
- URL: https://www.bullished.co/umc-expects-blended-chip-prices-to-rise-about-10-in-2027-ending-years-of-erosion-adbb9d65/
- Published: 2026-10-28T18:41:00.000Z
- Updated: 2026-10-28T18:41:00.000Z
- Description: CEO Jason Wang says customer talks are at a "very late stage" as full capacity limits shipments and pushes growth toward value.
- Author: Matteo Parrino
- Tags: Earnings, UMC, Industry: Technology

UMC, the Taiwanese chip foundry, expects its blended average selling price to [rise about 10%](https://cio.economictimes.indiatimes.com/news/investments/umc-invests-3-2-billion-in-capacity-expansion-amid-ai-revenue-growth-forecast/135262991?ref=bullished.co) in 2027, CEO Jason Wang told analysts on the company's third-quarter earnings call Wednesday. He called 2027 a "turning point" after years of price erosion.

## A full-year number, not a first-quarter target

Pressed by a UBS analyst, Wang said the 10% compares full-year 2027 with full-year 2026 and is not an initial view for the first quarter. CFO Chi-Tung Liu said first-quarter guidance will come on the next earnings call.

Liu told a Morgan Stanley analyst the figure covers the whole company and includes both like-for-like price increases and a richer product mix. A like-for-like number is hard to give, he said, because the technologies and products differ so much. "10% is probably the best indication for now," he said.

Wang gave the same reason when a Bank of America analyst asked for a breakdown, calling the talks complex, with contracts already in place and different applications involved.

## Why customers would accept higher prices

The Bank of America analyst noted that utilization had climbed while pricing stayed stable, and asked why customers would accept an increase now. Wang pointed to product mix, rising costs, extra depreciation from investment, and tighter capacity in selected technologies.

The annual talks began in the third quarter, he said, and are at a "very late stage," so management has "a fairly confidence" in its guidance.

Wang said 2026 growth came mainly from volume and utilization, and that 2027 will become increasingly value driven. With utilization above 90% and some technologies near full capacity, he said shipment growth will be limited by available capacity.

## Fabs near full, margins under pressure

UMC, which makes chips to customers' designs, said third-quarter capacity utilization reached 92%, up from 85% in the second quarter, Liu said. Wang said several 12-inch fabs ran at full capacity. Revenue grew 8% from the prior quarter to NT$74.2 billion, and gross margin improved to 34% from 32.5%.

Liu said price increases are likely to start in the first quarter, but raw material costs are rising and depreciation will be higher for a couple of years. He said gross margin is unlikely to approach its previous high.

Wang said AI-related revenue is about [$300 million](https://www.taipeitimes.com/News/biz/archives/2026/10/29/2003866785?ref=bullished.co) in 2026 and could exceed a quarter of revenue in three years. He also said the board approved extra capital spending for silicon photonics and advanced packaging, with new capacity starting in late 2028.

Liu said first-quarter guidance on the next earnings call will be the first test of the pricing talks.

### Sources

- [Taiwan's United Microelectronics Sees Trouble Brewing in Budget Smartphones, but Says Its Exposure Is Limited](https://www.benzinga.com/markets/earnings/26/10/62648893/taiwans-united-microelectronics-sees-trouble-brewing-in-budget-smartphones-but-says-its-exposure-is-limited?ref=bullished.co) — benzinga.com
- [AI revenue to reach US$300m this year, UMC says - Taipei Times](https://www.taipeitimes.com/News/biz/archives/2026/10/29/2003866785?ref=bullished.co) — taipeitimes.com
- [UMC Reports Third Quarter 2026 Results – Company Announcement - FT.com](https://markets.ft.com/data/announce/detail?dockey=600-202610280735BIZWIRE%5FUSPRX%5F%5F%5F%5F20261028%5FBW813596-1&ref=bullished.co) — Financial Times
- [Taiwan's UMC Invests $3.2 Billion for Major Chip Capacity Expansion, ETCIO](https://cio.economictimes.indiatimes.com/news/investments/umc-invests-3-2-billion-in-capacity-expansion-amid-ai-revenue-growth-forecast/135262991?ref=bullished.co) — cio.economictimes.indiatimes.com
- [Taiwan's UMC Invests $3.2 Billion for Major Chip Capacity Expansion, ETManufacturing](https://manufacturing.economictimes.indiatimes.com/news/hi-tech/taiwans-umc-approves-additional-3-2-billion-for-capacity-expansion/135268253?ref=bullished.co) — manufacturing.economictimes.indiatimes.com