GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, on Tuesday offered a lukewarm outlook for this quarter and next after revenue last quarter fell 2.9 percent to NT$17.38 billion (US$538.95 million) from the previous quarter as customers digested inventory and were cautious about wafer restocking.
Revenue this quarter would be slightly lower than last quarter and revenue momentum next quarter would remain weak, GlobalWafers chairwoman Doris Hsu (徐秀蘭) told investors.
A pickup in demand is likely in the second quarter of next year, when customers’ inventories fall, Hsu said.
Photo: EPA-EFE
GlobalWafers factories making smaller-diameter wafers suffered the most, with a capacity utilization rate of 60 to 65 percent, while its 8-inch factory usage dropped to 80 to 90 percent as demand started trending down last quarter, she said.
Its 12-inch factories fared better, with a utilization rate of 90 to 100 percent, she added.
A couple of months ago, GlobalWafers saw that demand from some integrated device manufacturing (IDM) customers was soft, particularly for automotive components and applications, Hsu said.
The company now sees the slowdown as a short-term phenomenon, as those customers are striving to deplete inventories, she said.
Despite the inventory pressure, GlobalWafers has secured more long-term supply agreements (LTA) and most customers are honoring them, the company said.
The company expects average selling prices for LTA customers to climb next year, given higher depreciation costs and improving demand, it said.
Capital spending this year would fall short of the firm’s target of NT$40 billion, as it has pushed out deliveries of construction materials and manufacturing tools to cope with sagging demand, it said.
However, next year would be the peak of capital spending for GlobalWafers, it said, adding that the construction of its new US fab is on track.
Separately, contract chipmaker Vanguard International Semiconductor Corp (世界先進) on Tuesday warned of weakening revenue growth this quarter, as it faces challenges from softening demand for auto chips.
Wafer shipments this quarter are expected to contract by 8 to 10 percent from last quarter, Vanguard said.
Average selling prices would be little changed, or down 2 percent sequentially, due to soft demand and intensifying competition from Chinese peers, it said.
Gross margin would be between 22 and 24 percent this quarter, down from 26.5 percent last quarter, it said.
Factory utilization is to deteriorate to between 55 and 65 percent this quarter, it added.
“Overall, market demand remains soft,” Vanguard vice president Claire Chen (陳姿鈞) said. “We are seeing a recovery in large display driver ICs for TVs, while demand for notebook computers is stabilizing. The automotive and industrial segments are still under inventory correction.”
To cope with the challenging environment, Vanguard is exploring new business opportunities in emerging applications such as artificial intelligence (AI) servers, AI PCs, electric vehicles and high-performance computing devices, company president John Wei (尉濟時) said.
Hopefully, the efforts would yield significant results next year, he said.
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS