Comprehensive Stock Comparison
Compare United Microelectronics Corporation (UMC) vs Tower Semiconductor Ltd. (TSEM) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | TSEM | 9.1% revenue growth vs UMC's 2.3% |
| Value | UMC | Lower P/E (17.2x vs 41.9x), PEG 0.41 vs 2.03 |
| Quality / Margins | UMC | 20.5% net margin vs TSEM's 14.1% |
| Stability / Safety | UMC | Beta 0.75 vs TSEM's 1.73 |
| Dividends | UMC | 4.4% yield; TSEM pays no meaningful dividend |
| Momentum (1Y) | TSEM | +193.8% vs UMC's +69.4% |
| Efficiency (ROA) | UMC | 8.4% ROA vs TSEM's 6.6%, ROIC 9.7% vs 5.4% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
United Microelectronics Corporation is a pure-play semiconductor wafer foundry that manufactures integrated circuits for other companies rather than designing its own chips. It generates revenue primarily from wafer fabrication services — accounting for the vast majority of sales — with additional income from mask tooling, design support, and testing services. Its competitive advantage lies in specialized manufacturing expertise in mature and specialty process technologies — particularly in areas like RFSOI, embedded memory, and high-voltage processes — where it maintains strong customer relationships and technical leadership.
Tower Semiconductor is an independent specialty semiconductor foundry that manufactures analog-intensive mixed-signal chips for customers who design but don't fabricate their own semiconductors. It generates revenue primarily from wafer fabrication services—charging customers for manufacturing their chip designs—with additional income from design enablement and process development services. The company's competitive advantage lies in its specialized expertise in analog and mixed-signal technologies—a niche where larger foundries often don't compete—and its long-term partnerships with customers in automotive, industrial, and medical markets.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Segment breakdown not available.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
UMC leads in 3 of 6 categories (Financial Metrics, Valuation Metrics). TSEM leads in 2 (Total Returns, Analyst Outlook). 1 tied.
Financial Metrics (TTM)
UMC is the larger business by revenue, generating $238.8B annually — 152.5x TSEM's $1.6B. UMC is the more profitable business, keeping 20.5% of every revenue dollar as net income compared to TSEM's 14.1%. On growth, TSEM holds the edge at +13.7% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| RevenueTrailing 12 months | $238.8B | $1.6B |
| EBITDAEarnings before interest/tax | $105.7B | $496M |
| Net IncomeAfter-tax profit | $48.9B | $220M |
| Free Cash FlowCash after capex | $50.1B | -$41M |
| Gross MarginGross profit ÷ Revenue | +29.8% | +23.2% |
| Operating MarginEBIT ÷ Revenue | +19.0% | +12.4% |
| Net MarginNet income ÷ Revenue | +20.5% | +14.1% |
| FCF MarginFCF ÷ Revenue | +21.0% | -2.6% |
| Rev. Growth (YoY)Latest quarter vs prior year | -2.2% | +13.7% |
| EPS Growth (YoY)Latest quarter vs prior year | +3.5% | +42.9% |
Valuation Metrics
At 19.6x trailing earnings, UMC trades at a 70% valuation discount to TSEM's 64.4x P/E. Adjusting for growth (PEG ratio), UMC offers better value at 0.47x vs TSEM's 3.12x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| Market CapShares × price | $26.3B | $14.0B |
| Enterprise ValueMkt cap + debt − cash | $25.3B | $14.0B |
| Trailing P/EPrice ÷ TTM EPS | 19.63x | 64.37x |
| Forward P/EPrice ÷ next-FY EPS est. | 17.24x | 41.89x |
| PEG RatioP/E ÷ EPS growth rate | 0.47x | 3.12x |
| EV / EBITDAEnterprise value multiple | 7.66x | 28.09x |
| Price / SalesMarket cap ÷ Revenue | 3.47x | 8.97x |
| Price / BookPrice ÷ Book value/share | 2.16x | 4.88x |
| Price / FCFMarket cap ÷ FCF | 15.75x | — |
Profitability & Efficiency
UMC delivers a 12.9% return on equity — every $100 of shareholder capital generates $13 in annual profit, vs $8 for TSEM. TSEM carries lower financial leverage with a 0.06x debt-to-equity ratio, signaling a more conservative balance sheet compared to UMC's 0.21x. On the Piotroski fundamental quality scale (0–9), TSEM scores 6/9 vs UMC's 5/9, reflecting solid financial health.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| ROE (TTM)Return on equity | +12.9% | +7.6% |
| ROA (TTM)Return on assets | +8.4% | +6.6% |
| ROICReturn on invested capital | +9.7% | +5.4% |
| ROCEReturn on capital employed | +9.0% | +6.6% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 6 |
| Debt / EquityFinancial leverage | 0.21x | 0.06x |
| Net DebtTotal debt minus cash | -$32.3B | -$74M |
| Cash & Equiv.Liquid assets | $110.7B | $235M |
| Total DebtShort + long-term debt | $78.3B | $162M |
| Interest CoverageEBIT ÷ Interest expense | 43.56x | — |
Total Returns (with DRIP)
A $10,000 investment in TSEM five years ago would be worth $40,754 today (with dividends reinvested), compared to $12,699 for UMC. Over the past 12 months, TSEM leads with a +193.8% total return vs UMC's +69.4%. The 3-year compound annual growth rate (CAGR) favors TSEM at 45.5% vs UMC's 13.8% — a key indicator of consistent wealth creation.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| YTD ReturnYear-to-date | +33.2% | +2.6% |
| 1-Year ReturnPast 12 months | +69.4% | +193.8% |
| 3-Year ReturnCumulative with dividends | +47.3% | +207.9% |
| 5-Year ReturnCumulative with dividends | +27.0% | +307.5% |
| 10-Year ReturnCumulative with dividends | +542.2% | +817.5% |
| CAGR (3Y)Annualised 3-year return | +13.8% | +45.5% |
Risk & Volatility
UMC is the less volatile stock with a 0.75 beta — it tends to amplify market swings less than TSEM's 1.73 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.75x | 1.73x |
| 52-Week HighHighest price in past year | $12.68 | $149.57 |
| 52-Week LowLowest price in past year | $5.71 | $28.64 |
| % of 52W HighCurrent price vs 52-week peak | +82.3% | +83.5% |
| RSI (14)Momentum oscillator 0–100 | 52.4 | 44.6 |
| Avg Volume (50D)Average daily shares traded | 9.7M | 1.6M |
Analyst Outlook
Wall Street rates UMC as "Hold" and TSEM as "Buy". Consensus price targets imply 23.3% upside for TSEM (target: $154) vs -17.6% for UMC (target: $9). UMC is the only dividend payer here at 4.40% yield — a key consideration for income-focused portfolios.
| Metric | UMCUnited Microelect… | TSEMTower Semiconduct… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Hold | Buy |
| Price TargetConsensus 12-month target | $8.60 | $154.00 |
| # AnalystsCovering analysts | 15 | 14 |
| Dividend YieldAnnual dividend ÷ price | +4.4% | — |
| Dividend StreakConsecutive years of raises | 0 | 2 |
| Dividend / ShareAnnual DPS | $14.41 | — |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | 0.0% |
Historical Charts
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Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| United Microelectro… (UMC) | 100 | 396.84 | +296.8% |
| Tower Semiconductor… (TSEM) | 100 | 673.01 | +573.0% |
Tower Semiconductor… (TSEM) returned +308% over 5 years vs United Microelectro… (UMC)'s +27%. A $10,000 investment in TSEM 5 years ago would be worth $40,754 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| United Microelectro… (UMC) | $147.9B | $237.6B | +60.6% |
| Tower Semiconductor… (TSEM) | $1.2B | $1.6B | +25.3% |
United Microelectronics Corporation's revenue grew from $147.9B (2016) to $237.6B (2025) — a 5.4% CAGR. Tower Semiconductor Ltd.'s revenue grew from $1.2B (2016) to $1.6B (2025) — a 2.5% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| United Microelectro… (UMC) | 5.8% | 17.6% | +201.2% |
| Tower Semiconductor… (TSEM) | 16.3% | 14.1% | -13.7% |
United Microelectronics Corporation's net margin went from 6% (2016) to 18% (2025). Tower Semiconductor Ltd.'s net margin went from 16% (2016) to 14% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| United Microelectro… (UMC) | 0.6 | 0.5 | -16.7% |
| Tower Semiconductor… (TSEM) | 11.8 | 60.5 | +412.7% |
United Microelectronics Corporation has traded in a 0x–1x P/E range over 9 years; current trailing P/E is ~20x. Tower Semiconductor Ltd. has traded in a 7x–61x P/E range over 9 years; current trailing P/E is ~64x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| United Microelectro… (UMC) | 3.35 | 16.7 | +398.5% |
| Tower Semiconductor… (TSEM) | 2.09 | 1.94 | -7.2% |
United Microelectronics Corporation's EPS grew from $3.35 (2016) to $16.70 (2025) — a 20% CAGR. Tower Semiconductor Ltd.'s EPS grew from $2.09 (2016) to $1.94 (2025) — a -1% CAGR.
Chart 6Free Cash Flow — 5 Years
United Microelectronics Corporation generated $52B FCF in 2025 (+30% vs 2021). Tower Semiconductor Ltd. generated $-41M FCF in 2025 (-138% vs 2021).
UMC vs TSEM: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is UMC or TSEM a better buy right now?
United Microelectronics Corporation (UMC) offers the better valuation at 19.6x trailing P/E (17.2x forward), making it the more compelling value choice. Analysts rate Tower Semiconductor Ltd. (TSEM) a "Buy" — based on 14 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — UMC or TSEM?
On trailing P/E, United Microelectronics Corporation (UMC) is the cheapest at 19.6x versus Tower Semiconductor Ltd. at 64.4x. On forward P/E, United Microelectronics Corporation is actually cheaper at 17.2x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: United Microelectronics Corporation wins at 0.41x versus Tower Semiconductor Ltd.'s 2.03x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — UMC or TSEM?
Over the past 5 years, Tower Semiconductor Ltd. (TSEM) delivered a total return of +307.5%, compared to +27.0% for United Microelectronics Corporation (UMC). A $10,000 investment in TSEM five years ago would be worth approximately $41K today (assuming dividends reinvested). Over 10 years, the gap is even starker: TSEM returned +817.5% versus UMC's +542.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — UMC or TSEM?
By beta (market sensitivity over 5 years), United Microelectronics Corporation (UMC) is the lower-risk stock at 0.75β versus Tower Semiconductor Ltd.'s 1.73β — meaning TSEM is approximately 129% more volatile than UMC relative to the S&P 500. On balance sheet safety, Tower Semiconductor Ltd. (TSEM) carries a lower debt/equity ratio of 6% versus 21% for United Microelectronics Corporation — giving it more financial flexibility in a downturn.
05Which has better profit margins — UMC or TSEM?
United Microelectronics Corporation (UMC) is the more profitable company, earning 17.6% net margin versus 14.1% for Tower Semiconductor Ltd. — meaning it keeps 17.6% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: UMC leads at 18.5% versus 12.4% for TSEM. At the gross margin level — before operating expenses — UMC leads at 29.0%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is UMC or TSEM more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, United Microelectronics Corporation (UMC) is the more undervalued stock at a PEG of 0.41x versus Tower Semiconductor Ltd.'s 2.03x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, United Microelectronics Corporation (UMC) trades at 17.2x forward P/E versus 41.9x for Tower Semiconductor Ltd. — 24.6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TSEM: 23.3% to $154.00.
07Which pays a better dividend — UMC or TSEM?
In this comparison, UMC (4.4% yield) pays a dividend. TSEM does not pay a meaningful dividend and should not be held primarily for income.
08Is UMC or TSEM better for a retirement portfolio?
For long-horizon retirement investors, United Microelectronics Corporation (UMC) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.75), 4.4% yield, +542.2% 10Y return). Tower Semiconductor Ltd. (TSEM) carries a higher beta of 1.73 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (UMC: +542.2%, TSEM: +817.5%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between UMC and TSEM?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. In terms of investment character: UMC is a mid-cap income-oriented stock; TSEM is a mid-cap quality compounder stock. UMC pays a dividend while TSEM does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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