United Microelectronics Corp. (UMC) has projected its gross margin for Q1 2025 may fall below 30%, primarily due to the impact of a 6.4 magnitude earthquake and a decline in product prices.

The earthquake disrupted operations at UMC’s Southern Taiwan Science Park facility, leading to employee evacuations.

Jason Wang, UMC co-president, explained that the earthquake, along with a 4-6% decline in product prices, is expected to negatively affect the company’s gross margin.

However, the company remains optimistic, forecasting a 10% growth in the global semiconductor industry in 2025, driven by AI servers and increased chip demand for smartphones and computers.