diff --git a/.changeset/sweet-doors-sit.md b/.changeset/sweet-doors-sit.md
new file mode 100644
index 000000000..bd1dcde86
--- /dev/null
+++ b/.changeset/sweet-doors-sit.md
@@ -0,0 +1,7 @@
+---
+"@ui5-language-assistant/context": patch
+"vscode-ui5-language-assistant": patch
+"@ui5-language-assistant/vscode-ui5-language-assistant-bas-ext": patch
+---
+
+fix: use latest ui5 version incase of s4 placeholder
diff --git a/packages/context/src/api.ts b/packages/context/src/api.ts
index f8eef92db..7514b0f15 100644
--- a/packages/context/src/api.ts
+++ b/packages/context/src/api.ts
@@ -6,7 +6,7 @@ import {
 } from "./manifest";
 import { finAdpdManifestPath } from "./adp-manifest";
 import { getServices } from "./services";
-import { Context } from "./types";
+import { Context, UI5_VERSION_S4_PLACEHOLDER } from "./types";
 import { getSemanticModel } from "./ui5-model";
 import { getYamlDetails } from "./ui5-yaml";
 import { getViewFiles } from "./utils/view-files";
@@ -51,7 +51,8 @@ export async function getContext(
     let manifestPath = manifestDetails.manifestPath;
     const manifest = await getUI5Manifest(manifestPath);
     let minUI5Version = manifestDetails.minUI5Version;
-    if (manifest) {
+    // if minUi5Version is not S4 placeholder, get it from manifest
+    if (minUI5Version !== UI5_VERSION_S4_PLACEHOLDER && manifest) {
       minUI5Version = getMinimumUI5Version(manifest);
     }
 
diff --git a/packages/context/test/unit/api.test.ts b/packages/context/test/unit/api.test.ts
index 8241da08b..9009351cc 100644
--- a/packages/context/test/unit/api.test.ts
+++ b/packages/context/test/unit/api.test.ts
@@ -7,7 +7,7 @@ import * as viewFiles from "../../src/utils/view-files";
 import * as controlIds from "../../src/utils/control-ids";
 import { UI5SemanticModel } from "@ui5-language-assistant/semantic-model-types";
 import { getContext, isContext } from "../../src/api";
-import type { Context } from "../../src/types";
+import { UI5_VERSION_S4_PLACEHOLDER, type Context } from "../../src/types";
 import * as projectAccess from "@sap-ux/project-access";
 import { OPEN_FRAMEWORK } from "@ui5-language-assistant/constant";
 
@@ -69,7 +69,87 @@ describe("context", () => {
       expect(getMinimumUI5VersionSub).toHaveBeenCalled();
       expect(getCustomViewIdStub).toHaveBeenCalled();
       expect(getYamlDetailsStub).toHaveBeenCalled();
-      expect(getSemanticModelStub).toHaveBeenCalled();
+      expect(getSemanticModelStub).toHaveBeenCalledWith(
+        undefined,
+        "OpenUI5",
+        "1.126.0"
+      );
+      expect(getServicesStub).toHaveBeenCalled();
+      expect(finAdpdManifestPathStub).toHaveBeenCalled();
+      expect(getViewFilesStub).toHaveBeenCalled();
+      expect(getControlIdsStub).toHaveBeenCalled();
+      expect(result).toContainAllKeys([
+        "services",
+        "manifestDetails",
+        "yamlDetails",
+        "customViewId",
+        "ui5Model",
+        "viewFiles",
+        "controlIds",
+        "documentPath",
+      ]);
+    });
+    it("get context - when minUI5Version is '${sap.ui5.dist.version}'", async () => {
+      // arrange
+      const getManifestDetailsStub = jest
+        .spyOn(manifest, "getManifestDetails")
+        .mockResolvedValue({
+          appId: "",
+          manifestPath: "",
+          mainServicePath: "/",
+          customViews: {},
+          flexEnabled: false,
+          minUI5Version: UI5_VERSION_S4_PLACEHOLDER,
+        });
+      const getManifestStub = jest
+        .spyOn(manifest, "getUI5Manifest")
+        .mockResolvedValue({
+          minUI5Version: UI5_VERSION_S4_PLACEHOLDER,
+        });
+      const getMinimumUI5VersionSub = jest.spyOn(
+        projectAccess,
+        "getMinimumUI5Version"
+      );
+      const getCustomViewIdStub = jest
+        .spyOn(manifest, "getCustomViewId")
+        .mockResolvedValue("customViewId");
+      const getYamlDetailsStub = jest
+        .spyOn(ui5Yaml, "getYamlDetails")
+        .mockResolvedValue({
+          framework: OPEN_FRAMEWORK,
+          version: undefined,
+        });
+      const getSemanticModelStub = jest
+        .spyOn(ui5Model, "getSemanticModel")
+        .mockResolvedValue({} as UI5SemanticModel);
+      const getServicesStub = jest
+        .spyOn(services, "getServices")
+        .mockResolvedValue({});
+      const finAdpdManifestPathStub = jest
+        .spyOn(adpManifest, "finAdpdManifestPath")
+        .mockResolvedValue("/path/to/app/variant");
+      const getViewFilesStub = jest
+        .spyOn(viewFiles, "getViewFiles")
+        .mockResolvedValue({});
+      const getControlIdsStub = jest
+        .spyOn(controlIds, "getControlIds")
+        .mockReturnValue(new Map());
+      // act
+      const result = await getContext(
+        "path/to/xml/file",
+        "test-model-cache-path"
+      );
+      // assert
+      expect(getManifestDetailsStub).toHaveBeenCalled();
+      expect(getManifestStub).toHaveBeenCalled();
+      expect(getMinimumUI5VersionSub).not.toHaveBeenCalled();
+      expect(getCustomViewIdStub).toHaveBeenCalled();
+      expect(getYamlDetailsStub).toHaveBeenCalled();
+      expect(getSemanticModelStub).toHaveBeenCalledWith(
+        "test-model-cache-path",
+        "OpenUI5",
+        UI5_VERSION_S4_PLACEHOLDER
+      );
       expect(getServicesStub).toHaveBeenCalled();
       expect(finAdpdManifestPathStub).toHaveBeenCalled();
       expect(getViewFilesStub).toHaveBeenCalled();