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Why United Microelectronics Stock Soared Today

What happened

Shares of United Microelectronics (NYSE: UMC) have soared today, up by 11% as of 1:40 p.m. EDT, after the chip foundry specialist certified a product design. The company also received positive sentiments from an analyst.

So what

Cadence Design Systems (NASDAQ: CDNS) and United Microelectronics announced that the Cadence mmWave reference flow has been certified for the foundry's 28HPC+ manufacturing process technology, which will allow mutual customers to utilize the integrated RF design flow in order to accelerate product timelines. The reference flow includes designs, layout implementation, and electromagnetic analysis of transistors.

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mmWave frequencies are a core aspect of 5G cellular technology that wireless carriers and smartphone makers around the world are transitioning to. Cadence's customer base includes prominent smartphone manufacturers.

"We've developed a comprehensive mmWave reference flow with Cadence that utilizes their comprehensive RF design flow in conjunction with a UMC foundry kit so engineers can create accurate, innovative designs using our 28HPC+ process technology," UMC Director of IP Development and Design Support T.H. Lin said in a statement. "Leveraging the flow capabilities and the familiar Virtuoso design environment, customers can minimize iterations and deliver designs based on our 28nm technology much more efficiently."

Now what

Meanwhile, Fubon Research issued a positive research note to investors noting that UMC's sales in June topped expectations as well as the company's own guidance. UMC earlier this month reported that revenue in June increased 24.6% to 14.6 billion New Taiwan dollars, bringing second-quarter revenue to NT$44.4 billion. That result is approximately 3% higher than Fubon's estimates.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Cadence Design Systems. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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