Vanguard International Semiconductor Corp (世界先進), a supplier of display driver ICs and power management chips, yesterday predicted that revenue this quarter would expand more than 13 percent sequentially to a new record, mainly due to price hikes amid a persistent imbalance between supply and demand.
Near-term demand is “very strong,” while its longer-term business outlook is underpinned by a structural change in matured 8-inch technology nodes amid scarce supply, as well as the rapid increase in demand that is expected for 5G devices and electric vehicles in next few years, the Hsinchu-based chipmaker said.
“Generally speaking, demand for Vanguard’s foundry services will increase at a constant rate this quarter, greatly enhancing order visibility,” Vanguard chairman Fang Leuh (方略) told investors in an online conference. “We expect factory utilization to remain high for the whole of 2021.”
Photo: Grace Hung, Taipei Times
Demand for driver ICs used for smartphone displays and in other devices shows the greatest growth momentum, which will lead to an increase in 0.18 micron technology and advanced technologies revenue contribution this quarter, Fang said.
Revenue from 0.18 micron and more-advanced technology made up 52 percent of Vanguard’s revenue last quarter following five consecutive quarters of increases, the company said.
Vanguard plans to hike prices by a low-teen percentage this quarter from last quarter, given the favorable supply-demand environment and increases in manufacturing costs, it said.
Shipments are to increase at a quarterly pace of 3 percent this quarter, it said.
To alleviate a supply crunch, Vanguard said it plans this quarter to add about 8,000 wafers a month of capacity at its Taoyuan fab.
The added capacity — which would be for customers who have inked long-term supply agreements — would help Vanguard cope with supply constraints and the rising cost of building new capacity, it said.
The remaining capacity — about 16,000 wafers per month — will be available from the middle of next year, it said.
Gross margin is expected to improve to between 44 and 46 percent this quarter, after reaching a 14-year high of 40.9 percent last quarter, Vanguard said.
The chipmaker attributed the gross margin improvement to price rises, an improved product portfolio and technology upgrades.
The firm does not expect substantial changes in competition from Chinese rivals, Fang said.
There is no imminent risk of order loss to chipmakers operating 12-inch fabs, as cost and production efficiency hurdles are high, he said.
Vanguard operates four fabs, all of which produce 8-inch wafers.
Net profit surged 75.6 percent to NT$2.6 billion (US$93.09 million) in the quarter ended June 30, compared with NT$1.81 billion in the second quarter of last year.
That was a quarterly increase of 17.5 percent from NT$2.21 billion.
That translated into earnings per share of NT$1.58 last quarter, up from NT$0.9 in the second quarter of last year and NT$1.34 in the January-to-March quarter.
Vanguard kept capital expenditure for this year unchanged at NT$8.5 billion.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
RSS