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.
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