UPDATE: JP Morgan Downgrades United Microelectronics Sees Limited Risk-Reward After Recent Strong Rally

In a report published on Monday analysts from JP Morgan downgraded its rating on United Microelectronics

from Overweight to Neutral and lowered its PT for the company from $14.50 to $14. In the report lead analyst Gokul Hariharan commented that, "We assume coverage of UMC and cut to Neutral, since we see limited risk-reward after the recent strong rally. Near-term dynamics remain strong for the Foundry industry, but this is captured in the recent stock rally. Looking ahead, UMC's status as close follower to TSMC is being threatened by Global Foundries (recent 28nm wins in QCOM, Mediatek), while SMIC is emerging as the key vendor of choice for Chinese design houses, usurping UMC's position. Our Dec-13 PT is NT$14 (implying 0.8x FY14 book, 5% ROE in 2014). Key upside risk is if Taiwan govt allows 12" Fabs in China and downside risk is further yield issues in 28nm." United Microelectronics currently trades at $2.21 and is up 0.91 percent on the day.