Compound semiconductors maker Episil Technologies Inc (漢磊科技) yesterday said it aims to work with Vanguard International Semiconductor Corp (世界先進) to expand production of 8-inch silicon carbide wafers to an economic scale and strive to gain orders from global customers such as Japan’s Renesas Electronics Corp and Denso Corp.
The two firms on Tuesday signed an agreement to produce 8-inch silicon carbide wafers at a 6-inch fab operated by Episil. Vanguard also agreed to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.25 million).
Six-inch wafers remain a mainstream product in the silicon carbide market, but 8-inch wafers are expected to catch up in the next one to two years, Episil chairman Shyu Jann-hwa (徐建華) told investors.
Photo: CNA
The company’s move follows the step of major chipmakers such as Infineon Technology AG of Germany, which has opened a new 8-inch fab in Malaysia to produce silicon carbide wafers.
“We are optimistic about long-term demand for silicon carbide, although there is an oversupply, which we consider as a short-term issue,” Shyu said.
“With the use of silicon carbide gradually spreading from electric vehicles to home appliances, industrial devices and artificial intelligence data centers, it creates good business opportunities for foundry companies,” Shyu added.
Episil has failed to obtain orders from several global integrated-device manufacturers (IDM) as it lacks capacity, Shyu said.
The collaboration with Vanguard would help overcome this problem, he said, adding that the move is cost-efficient compared with building a new fab.
The 8-inch fab would operate a pilot line with a monthly capacity of 1,500 wafers before expanding to about 10,000 wafers over the next few years depending on customer demand, he added.
Episil is targeting Japanese IDMs such as Renesas Electronics, Denso and Toshiba Corp as potential customers, the company said.
Episil’s revenue in the first half of the year dropped 20.23 percent year-on-year to NT$2.94 billion as customers struggled with inventory issues, with silicon-based revenue tumbling 32 percent due to sagging demand from automotive and consumer electronics segments.
The company recorded a NT$212.28 million loss in the first half of the year, compared with a net profit of NT$91.94 million during the same period last year.
Episil swung into a loss of NT$0.64 per share in the first 6 months of this year, from earnings of NT$0.28 per share a year ago.
The company’s factory utilization rate would remain lower than 50 percent in the second half of this year, which would continue weighing on its gross margin because of higher depreciation costs from idled equipment, it said.
Gross margin dropped to 0.15 percent in the first half from 12.66 percent a year earlier.
The company expects business to improve in the fourth quarter thanks to stabilizing wafer pricing and an increase in customer demand, it said.
Wafer prices have fallen more than 30 percent since the beginning of this year, it added.
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