Thu, Aug 11, 2011 - Page 12 News List

SAS records steep net profit drop

By Lisa Wang  /  Staff Reporter

Local solar wafer maker Sino-American Silicon Products Inc (SAS, 中美晶) saw second-quarter net profit drop 82 percent from a year ago, as prices plunged amid dwindling demand after European countries cut subsidies for solar device installations.

Net profits fell to NT$130 million (US$4.48 million) in the second quarter, compared with NT$731 million in the same period last year. The second-quarter figure was calculated based on the company’s report yesterday that first-half net profit reached NT$1.25 billion and an earlier report that first-quarter profit reached NT$1.12 billion.

Compared with the first quarter, the net profit in the second quarter dropped 88 percent, according to a filing with the Taiwan Stock Exchange.

“Demand and prices fell swiftly in the second quarter because of uncertainty about the market situation, leading to a reduction in revenue and profitability,” SAS said in a press release yesterday.

The pricing pressure is expected to continue in the second half, but SAS chairman and chief executive Lu Ming-kuang (盧明光) said “the company will remain profitable,” without elaborating.

IMPROVED OUTLOOK

This quarter, the outlook for the solar industry was improving as reflected in stabilizing prices and a mild recovery in demand, SAS said.

The price of multicrystalline silicon wafers dropped 1.52 percent to US$2.59 per unit from a week ago, as Chinese and South Korean suppliers are increasing supply, market researcher TrendForce Corp (集邦科技) said yesterday.

ACQUISITION

Separately, SAS yesterday said it has inked an agreement to acquire the silicon wafer manufacturing business of Japan’s Covalent Materials Corp for ¥35 billion (US$457.9 million) in cash from private equity funds Carlyle Group and Unison Capital.

“This agreement will be key to fueling the next-wave growth momentum for SAS,” company president Doris Hsu (徐秀蘭) told a media briefing.

The acquisition would make SAS the world’s No. 6 silicon-wafer maker with a market share of about 5.4 percent, Hsu said.

The deal would help SAS expand its product portfolio and customer base and enhance the company’s technological capabilities, she said.

At the moment, the silicon wafer manufacturing business made up about 30 percent of SAS’s total revenue.

Covalent Materials supplies silicon wafers to a wide range of customers in the semiconductor, solar and LED markets. Its clients include the world’s biggest contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) and power management chipmaker Microchip Technologies Inc.

Covalent Materials operates four silicon wafer plants in Japan.

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