Tue, Nov 05, 2013 - Page 14 News List

Vanguard expects slowing of shipments this quarter

By Kevin Chen  /  Staff reporter

Vanguard International Semiconductor Corp (世界先進) yesterday said it expects wafer shipments to drop sequentially this quarter as the semiconductor industry enters a slow season.

Vanguard said its profit margin would edge down slightly, while average selling prices (ASP) may increase mildly, as it manages to sail through the waves of customers’ inventory adjustments.

“As the customer demand for the wafer foundry post Golden Week becomes more conservative, we expect wafer shipments to decrease by a middling single digit percentage quarter-on-quarter,” Vanguard president Tseng Dong-liang (曾棟樑) said in a statement, after the release of results for last quarter.

Tseng said the company’s fab utilization rate is expected to reach about 100 percent this quarter, while its gross margin will be in the “low 30s” percent. The company’s ASP is forecast to increase by a “low-single digit percentage” sequentially, he added.

Yuanta Securities Co (元大證券) analyst George Chang (張家麒) yesterday said the company’s fourth-quarter guidance is slightly better than the seasonal norm.

However, it is not strong enough for the brokerage to make an earnings upgrade for the company, he said in a client note, citing worries about the sustainability of strong growth momentum next quarter after receiving two straight quarters of strong orders from Apple Inc.

Yuanta now expects Vanguard to report earnings per share of NT$0.7 this quarter, with a full-year EPS of NT$2.69 for this year.

In the third quarter, the company posted net income of NT$1.23 billion (US$41.8 million), up 7.9 percent from NT$1.14 billion in the second quarter and 54.7 percent higher from the NT$795 million a year ago.

That translates into earnings per share of NT$0.76 for last quarter, compared with NT$0.7 recorded in the previous quarter and NT$0.49 in the prior year.

Third-quarter revenue rose 4 percent quarter-on-quarter and 19 percent year-on-year to NT$5.59 billion, while wafer shipment rose one percent to 425,000 wafers from 423,000 wafers from the second quarter.

Gross margin was 34 percent last quarter, compared with 33 percent the previous quarter and 28 percent a year ago, company data showed.

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