Contract chipmaker Vanguard International Semiconductor Corp (世界先進) yesterday posted its strongest profit in three quarters last quarter, but said wafer shipments are expected to dip more than 10 percent sequentially this quarter as customers entered a year-end inventory adjustment cycle.
Net profit last quarter surged 31.4 percent annually, or 18.6 percent sequentially, to NT$2.13 billion (US$66.63 million), thanks to a seasonal pickup in customers demand.
Earnings per share rose to NT$1.29 from NT$0.98 in the same period last year and NT$1.09 in the second quarter.
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Vanguard expects wafer shipments to slide between 10 percent and 12 percent quarter-on-quarter.
The chipmaker also expects inventory adjustments — likely to extend into the first quarter of next year — to crimp demand for chips used in vehicles and industrial devices.
“Currently, the company has order visibility of two to three months,” Vanguard president John Wei (尉濟時) told investors yesterday.
Its factory utilization rate is expected to drop to about 65 percent this quarter from 73 percent last quarter, while gross margin is estimated to range from 27 percent to 29 percent, compared with 29 percent in the second quarter, the company said.
The company’s blended average selling prices are projected to rise 3 percent to 5 percent this quarter from last quarter, thanks to stronger demand for higher-price power management ICs, offsetting sluggish demand for driver ICs used in flat panel displays, it said.
Power management ICs contributed 66 percent of the chipmaker’s revenue last quarter, while display driver ICs accounted for about 31 percent, company data showed.
Vanguard said it expects to recognize additional income from long-term-agreement customers this quarter following terms renegotiations, which would approximately make up 3 percent to 4 percent of the quarter’s revenue.
The company yesterday raised its capital expenditure for this year again to about NT$5 billion, from an earlier estimate of NT$4.5 billion, due to related spending for the construction of its first 12-inch fab in Singapore through a joint venture, VisionPower Semiconductor Manufacturing Co Pte Ltd (VSMC), with NXP Semiconductor NV.
Its board of directors on Monday approved NT$24.12 billion equipment and facilities expenditures for VSMC and NT$1.18 billion for existing 8-inch fabs.
Despite the capital spending increases, the company aims to keep its cash dividend distribution unchanged at NT$4.5 per share for at least the next three years as it has accumulated significant distributable earnings, Vanguard chairman Fang Leuh (方略) said.
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