Vanguard Semiconductor International Co (世界先進), which makes power management ICs and driver ICs for displays, yesterday said that net profit last quarter fell 1.4 percent from the previous quarter to NT$1.48 billion (US$49.27 million) as a newly acquired fab from GlobalFoundries Inc dragged down gross margin and prices.
Net profit was NT$1.5 billion in the fourth quarter of last year. Despite the quarterly decline, net profit rose 6.4 percent annually from NT$1.39 billion.
Earnings per share fell to NT$0.89 from NT$0.91 the previous quarter, but rose from NT$0.84 a year earlier.
Photo: Hung Yu-fang, Taipei Times
Gross margin dipped to 31 percent last quarter from 36.1 percent the previous quarter, as well as in the first quarter of last year, the company said in a statement.
The chipmaker said that it aims to limit the new fab’s erosion of its gross margin to within 5 percentage points this year.
Vanguard expects gross margin to improve to 31 to 33 percent this quarter, driven by robust customer demand and higher factory utilization of as high as 93 percent, up from about 90 percent a quarter earlier.
“At the moment, we still see our customers showing very strong demand through the second quarter,” Vanguard chairman Fang Leuh (方略) told investors during a teleconference.
“We have two months of [order] visibility until the end of the second quarter,” Fang said.
Vanguard said that it is cautious about customer demand in the second half of the year, given the sliding global economy and climbing unemployment rates worldwide.
“Uncertainty for the second half is huge,” Fang said.
Customers are not cutting orders on any downside risks yet, he added.
Vanguard expects growth momentum to boost revenue by 2 to 7.14 percent to a record high of between NT$8 billion and NT$8.4 billion this quarter, from NT$7.84 billion in the first quarter of this year.
It expects robust demand for power management ICs used in data centers, servers and work-from-home-related devices to fuel growth momentum, the company said.
Growth momentum would also come from driver ICs used in TV displays, as its Chinese display customers are gaining shares after South Korea’s Samsung Electronics Co exited the LCD market, it said.
However, driver ICs used in smartphone displays would be flat or would decline slightly this quarter from last quarter, due to customers’ inventory corrections, Vanguard said.
Power management ICs contributed 55 percent to Vanguard’s total revenue last quarter, while driver ICs for large-sized displays and small-sized displays accounted for 26 percent and 8 percent respectively.
The 8-inch fab in Singapore, which was acquired from GlobalFoundries, is operating normally and is not affected by the city-state’s disease prevention measures, as the semiconductor industry is considered a key industry for Singapore, Vanguard said.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS