Vanguard International Semiconductor Corp (世界先進), which manufactures microchips primarily used in liquid-crystal-display (LCD) panels, said yesterday its net income in the second quarter had more than halved as prices fell on slowing demand.
Net income shrank 53 percent to NT$475 million (US$15.5 million) during the quarter ending on June 30, compared with NT$1.02 billion a year ago, a company statement said.
Factory usage fell to about 82 percent last quarter as customers reduced orders, from 98 percent in the same quarter last year, it said.
During the April-June period, low-margin memory chip business made up a bigger share, or 23 percent, of Vanguard’s revenues of NT$4.58 billion, from 14 percent in the first quarter. The chipmaker did not provide year-on-year comparative figure.
“As the global economy becomes more uncertain, customers are more cautious about [placing] orders and aggressive in inventory control,” company spokesman Robert Hsieh (謝徽榮) said, in reference to the company’s outlook for the rest of the year.
As a result, equipment utilization could drop further to 80 percent in the third quarter, the chipmaker said.
This would be the lowest level in more than two years from the first quarter of 2006, when the factory utilization rate was 71 percent.
Gross margin may decline further to between 16 percent and 18 percent during the third quarter, compared with 19 percent in the second quarter and 42 percent in the third quarter of last year, Vanguard said in the statement.
Profit margin could drop further to between 6 percent and 8 percent this quarter, from 10 percent last quarter and from 34 percent in the third quarter of last year.
The company could post revenues for the current quarter in the range between NT$4.2 billion and NT$4.5 billion, down from NT$4.54 billion last quarter, the statement said.
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