Tue, Feb 21, 2012 - Page 12 News List

Vanguard reports deep plunge in quarterly income

By Jason Tan  /  Staff Reporter

Vanguard International Semiconductor Corp (世界先進), which makes driver integrated circuits (IC) for LCD panels, yesterday posted NT$28 million (US$950,000) in earnings for the fourth quarter last year, plunging 91 percent year-on-year and a drop of 71 percent quarter-on-quarter.

That translated to earnings per share of NT$0.02 in the fourth quarter, compared with NT$0.19 in the corresponding period of 2010 and NT$0.06 in the third quarter.

The decline was a result of conservative orders from clients amid dampened demand for consumer electronics, Vanguard president Leuh Feng (方略) said at an investors’ conference.

Net sales were NT$3.31 billion in the fourth quarter, down 3 percent year-on-year and a dip of 15 percent quarter-on-quarter.

The company painted an equally bleak prospect for this quarter, blaming it on seasonality.

Feng said even though customers had digested excess inventory, the demand was not expected to pick up significantly as the festivities at the end of last year and early this year had concluded.

Wafer shipments this quarter are expected to drop by 4 to 6 percent from 249,000 pieces in the fourth quarter last year, he said.

Fab utilization rate is expected to hit 60 percent, compared with 61 percent in the fourth quarter.

Gross margin, meanwhile, will be 7 to 9 percent, compared with 9 percent in the fourth quarter.

Blended average selling price, which already decreased 2 percent in the fourth quarter, will further drop by 4 to 6 percent this quarter, the company said.

Capital expenditure will be significantly reduced to NT$500 million from NT$2.3 billion last year amid a conservative macroeconomic outlook, it added.

Vanguard is banking on its power management IC revenue to grow 25 percent this year to drive overall momentum.

Power management ICs took up 23 percent of sales in the fourth quarter last year, while driver ICs for smaller panels accounted for 24 percent and those for larger panels were 36 percent.

Shares of Vanguard advanced 3.91 percent yesterday to close at NT$13.3 on the Taiwan Stock Exchange before the earnings announcement.

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