Vanguard International Semicon-ductor Corp (世界先進) announced yesterday that its second-quarter earnings had almost doubled, thanks to recovering demand, but investors said they were concerned that the company's conservative capacity expansion plan could curb its long-term growth.
The contract chipmaker, 27 percent owned by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), posted NT$648 million (US$19.71 million), or NT$0.39 a share, in net income for the quarter that ended in June, compared with NT$373 million, or NT$0.23 per share, a year earlier.
Vanguard, which only has an 8-inch plant, said its growth momentum would carry into the current quarter because of growing demand for liquid-crystal-display (LCD) panels for computers and handsets, which would boost its factory usage to over 95 percent.
"We are seeing some upside in the driver IC for new panels used in wide-screen computers. We also found rising panel demand for low-priced handsets," Vanguard vice president Thomas Chang (張東隆) said.
Vanguard's customers have low-level inventories of such new products and demand was healthy, Chang said.
Wafer shipments would expand 20 percent at a quarterly pace in the third quarter and the average selling price would be stable, company president Hsu Chung-shi (
Chips used in flat panels accounted for more than half of the chipmaker's total second-quarter revenues of NT$2.95 billion, which represented an 8 percent increase over the same period last year.
Despite the robust outlook for the current quarter, investors had hoped the firm's new management team would be more ambitious about capacity expansion.
"We have no substantial plan to build any new factories," said former minister of finance Lin Chuan (林全), who replaced Paul Chien (簡學仁) as chairman in May.
The firm's capital spending for this year would be unchanged at NT$1.7 billion, but the chipmaker planned to boost its monthly output to 65,000 wafers by the end of this year, Lin told investors. That would be about 12 percent growth from 58,000 wafers a month in the second quarter.
"It's quite disappointing to hear that. I had hoped the new management would be more aggressive. They sound no different from their predecessors," said Roland Hsu (徐振志), who tracks the semiconductor industry for JP Morgan.
Lin said Vanguard would maintain stable ties with TSMC, whose orders make up about 30 percent of Vanguard's revenues.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts