Sat, Jul 28, 2012 - Page 14 News List

Faraday forecasts positive H2

LOOKING GOOD:The high-tech firm which supplies components to smartphone manufacturers has said that the outlook for the remainder of 2012 looks strong

By Kevin Chen  /  Staff reporter

Faraday Technology Corp (智原科技), a leading application-specific integrated circuit and silicon intellectual property (IP) provider, said yesterday second-quarter financial results met its earlier guidance and indicated a positive outlook for the second half of the year.

The Hsinchu-based company said in an e-mailed statement that its net income reached NT$288 million (US$9.57 million), or NT$0.72 in earnings per share (EPS), in the quarter from on record-high revenues of NT$1.91 billion.

Second-quarter profit was 16.13 percent higher than the figure the Hsinchu-based company reported in the previous quarter, when it posted NT$248 million in profit, or an EPS of NT$0.61, according to the company’s financial report.

On an annual basis, the second-quarter figure was more than 28 times the NT$10 million, or NT$0.03 in EPS, earned a year ago, the report indicated.

For the first half of the year, the company had an EPS of NT$1.33.

Faraday was formed in 1993 as a spin off from contract chipmaker United Microelectronics Corp (聯電). Its businesses include low-margin application-specific integrated circuit (ASIC) design solutions for customers and high-margin silicon intellectual property rights and non-recurring engineering (NRE) services for its ASIC customers.

The company is a major supplier to Samsung Electronics Co’s eMMC (embedded multimedia card) controller integrated chip for smartphones and tablets. It also provides solutions to some Chinese smart-grid system operators and has 40 nanometer ASICs for 4G LTE base stations in NRE projects.

In the second quarter, ASICs were the major growth driver of the company’s revenue, rising 1.6 percent from the previous quarter, while IP revenue dropped 1.3 percent quarter-on-quarter and NRE fees showed a 0.3 percent sequential decline, the report showed.

Overall, second-quarter revenue grew 6.37 percent to a record NT$1.91 billion from NT$1.79 billion in the previous quarter, up 36.56 percent from NT$1.395 billion a year ago, according to the company’s data.

“Overall revenue beat the company’s guidance of single-digit growth and achieved a record-high level,” Faraday spokesman Jensen Yen (顏昌盛) said in the report, adding that revenue growth was mainly driven by multimedia and display applications as well as from communications and PC peripheral sectors.

While low-margin ASIC accounted for 85.6 percent of the company’s revenue in the second quarter, Faraday still managed to maintain its gross margin unchanged at 41.6 percent in the quarter, compared with the first three months. Yen said the figure met the company’s previous guidance of more than 40 percent.

Looking ahead, Faraday said it expected growth momentum to remain positive in the third quarter and continue through the end of the year, mainly because of stable demand for consumer applications, strong sales for multimedia and PC peripheral items, as well as gains from its mid-to-long term investments in the communications sector.

Yen said the company expected third-quarter revenue to set a new quarterly record, with a "high single-digit" gain from last quarter.

Shares in Faraday rose 3.25 percent to NT$39.75 yesterday in Taipei trading, up 37.78 percent this year, Taiwan Stock Exchange data showed.

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