Powerchip Semiconductor Manufacturing Corp (力積電) yesterday reported that its net losses last quarter shrank 79.2 percent from the previous quarter, reflecting improving gross margin as the company’s factory utilization increased and the cost of idle capacity was reduced.
Net losses in the January-to-March period totaled NT$439 million (US$13.56 million), compared with losses of NT$2.11 billion during the previous three months, the pure-play wafer foundry firm said in a document released after the company’s earnings conference.
Last quarter, Powerchip’s revenue fell 3.06 percent to NT$10.82 billion during the industry’s low season, compared with NT$11.16 billion the previous quarter, the company said.
Photo: Lam Yik Fei, Bloomberg
However, gross margin improved by 12.3 percentage points to 15.4 percent, while operating margin was minus-9.9 percent, better than the minus-18.1 percent recorded in the previous quarter, it said.
Last quarter’s net losses translated into losses per share of NT$0.11, compared with losses per share of NT$0.52 the previous quarter, company data showed. The result was roughly in line with market estimates of losses per share of NT$0.1.
However, Powerchip’s top-line and bottom-line results in the first quarter were still lower than the same period last year, with revenue down 5.49 percent and net profit plunging 335 percent due to softening end-market demand and its customers’ continued inventory adjustments, it said.
Powerchip, which makes DRAM and flash chips, as well as power management and driver ICs, on a contract basis, said the massive earthquake that hit Taiwan’s east coast on April 3 would affect its second-quarter shipments by 5 to 8 percent.
The quake measured 7.2 on the Richter scale and magnitude 7.4 on the moment magnitude scale.
The company said the recovery rate of its production lines reached 80 percent within three days of the earthquake and 95 percent within one week.
It hopes 50 to 60 percent of its quake losses — such as scrapped chips and damaged components — would be covered by insurance, Powerchip said.
For this quarter, average selling prices of memory products are expected to climb as end-market demand rises and customers face less inventory pressure, while prices of discrete components and power management ICs could remain stable, it said.
However, prices of CMOS image sensors and small-size display driver ICs, which accounted for about 20 percent of the company's revenue, would face competition from Chinese rivals, making it a key variable affecting the company's profitability, Powerchip said.
Overall, it is cautiously positive about its revenue performance this quarter and expects gross margin to be flat or higher than last quarter, driven by improving factory utilization for logic chip and memorychip operations, the company said.
Powerchip said it has raised its capital expenditure this year to NT$32 billion from an earlier budget of NT$24 billion, as it is adjusting its product mix to cope with market changes and customers’ needs as well as respond to inflation-driven equipment cost increases.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
Servers that might contain artificial intelligence (AI)-powering Nvidia Corp chips shipped from the US to Singapore ended up in Malaysia, but their actual final destination remains a mystery, Singaporean Minister for Home Affairs and Law K Shanmugam said yesterday. The US is cracking down on exports of advanced semiconductors to China, seeking to retain a competitive edge over the technology. However, Bloomberg News reported in late January that US officials were probing whether Chinese AI firm DeepSeek (深度求索) bought advanced Nvidia semiconductors through third parties in Singapore, skirting Washington’s restrictions. Shanmugam said the route of the chips emerged in the course of an
RSS