Sat, Jan 27, 2007 - Page 12 News List

Vanguard quashes rumored Winbond plant purchase

By Lisa Wang  /  STAFF REPORTER

Local contract chipmaker Vanguard International Semiconductor Corp (世界先進) yesterday refuted speculation that it would acquire a plant from local memory chipmaker Winbon Electronics Corp (華邦電子) to expand capacity for future growth.

Local Chinese-language papers reported that Vanguard planned to buy an 8-inch wafer plant from Taiwan's biggest manufacturer of computer memory chips, Powerchip Semiconductor Corp (力晶半導體), last month as Vanguard has fully filled its production capacity.

"We have no comment on the media's speculation," Vanguard said in a filing to the Taiwan Stock Exchange yesterday. "We are exploring all possibilities of lifting production efficiency at low cost."

Vanguard, established in 1994, has only one 8-inch wafer plant and is buying chips from other manufacturers, including Powerchip, to meet customer demand.

The media began focusing on the company's capacity expansion plans after investors began expressing concerns that limited capacity could cap Vanguard's future growth.

In the traditionally slack first quarter, its equipment utilization rate would fall to 95 percent from 105 percent in the last quarter, Vanguard said yesterday.

Wafer shipments would decline by less than 10 percent this quarter, Vanguard said.

The company's gross margin would slide slightly to between 34 percent and 36 percent from 41 percent last quarter on falling chip prices, it said.

Vanguard is scheduled to hold a quarterly investor's conference on Monday.

Last quarter, Vanguard's net income jumped to NT$1.08 billion (US$32.9 million), or NT$0.65 per share, its strongest quarterly earnings in the seven quarters since the third quarter of 2004. On a year-on-year basis, the quarter's earnings reflected a 37-percent increase from the previous NT$788 million, or NT$0.48 a share.

For last year, Vanguard said earnings rose to NT$3.02 billion, or NT$1.83 per share. Revenues totaled NT$12.97 billion.

Shares of Vanguard advanced 4.15 percent to NT$25.1 on the Taiwan Stock Exchange yesterday, beating the benchmark TAIEX's 1.29 percent loss.

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