Foxsemicon Integrated Technology Inc (京鼎), which counts Applied Materials Inc as a major client, expects its gross margin to improve this year after shipping more higher-margin automation systems, a company executive said yesterday.
Foxsemicon, which is 5.97 percent owned by Hon Hai Precision Industry Co (鴻海精密) through a venture capital subsidiary, said it had an unusually strong year last year due to a spike in lower-margin solar equipment orders after a major rival shut down factories.
“This year, revenue will be a bit weaker,” company spokesman Stanley Lu (呂軍甫) said. “However, we hope growing demand for automation systems will help sustain our gross margin as seen in the company’s first-quarter financial results.”
Gross margin rose to 18.2 percent in the first quarter, while net profit stood at NT$78 million (US$2.5 million), according a company filing to the Taiwan Stock Exchange. Last year, the company had a gross margin of 12.1 percent.
Lu said revenue contribution from automation systems rose to 27 percent in the first quarter and should stay at that level for the remainder of the year, compared with last year’s 22 percent.
Gross margin for automation systems is higher than for solar equipment, he said.
Semiconductor equipment, which delivers the highest gross margin, is the largest revenue source for Foxsemicon, making up 70 to 80 percent of its total revenue of NT$4.6 billion last year.
The company’s semiconductor equipment is used by industry leaders, including Intel Corp, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co.
Foxcsemicon said it supplies advanced equipment front-end modules (EFEM) to TSMC and is developing EFEM for advanced 10-nanometer processing technology as requested by the customer.
“As Taiwan’s semiconductor and LCD companies are expanding capital spending, Foxsemicon should have rosy business prospects,” Foxsemicon chairman Liu Yin-kuang (劉應光) told investors ahead of the company’s initial public offering (IPO) later this month.
Foxsemicon is cooperating with local LCD equipment supplier Usun Technology Co (陽程) to expand its LCD business, Liu said.
Despite an emerging Chinese semiconductor industry, Liu said any threat was not imminent, because Chinese rivals have weaker technological capabilities.
However, China would be a new market for Foxsemicon, as the company would vie for more equipment orders from Chinese contract chipmakers, he added.
“South Korea is a major rival, not China,” he said.
Foxsemicon is to debut its shares on the main bourse on July 28, with its IPO price tentatively set at NT$60 per share.
Last year, the company reported a net profit of NT$323.08 million, or NT$3.43 per share, up from NT$42.87 million in 2013, or NT$2.09 a share. Revenue nearly doubled from NT$2.47 billion in 2013 to NT$4.6 billion last year.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by