Semiconductor inspection tool and equipment maker Hermes Microvision Inc (HMI, 漢微科), which counts Intel Corp as a major customer, yesterday posted a 32 percent sequential decline in quarterly net profit for last quarter, but it expects growth momentum to recover this quarter to drive revenue higher.
Hermes expects the upturn to extend into next year.
“We are optimistic about 2016, which will be a better year than this year,” company chairman Shu Chin-yung (許金榮) told an investors’ conference.
The growth is to come from rising demand for its e-beam inspection tools, as its customers migrate to advanced 10-nanometer (nm) technology, coupled with orders and shipments postponed from this year, Shu said.
“Demand from our key customers looks ok,” HMI president Pan Chung-shih (潘中石) said.
In addition to microprocessor makers like Intel, memory chipmakers are going to need more e-beam inspection tools next year, when companies upgrade technologies to 20nm and 10nm technologies, Shu said.
Based on that optimism, HMI expects an annual growth in revenue in the first quarter.
Hermes is the world’s biggest e-beam inspection tool supplier, commanding an 85 percent market share.
During the quarter ended Sept. 30, net profits plunged to NT$466 million (US$14.34 million), compared with NT$690 million in the second quarter.
Revenue dipped 55 percent sequentially last quarter to NT$1.05 billion as customers delayed deliveries.
Overall this year, revenue is expected to be flat, or slide by a single-digit percentage from last year’s NT$7.21 billion, as the world’s major semiconductor companies have reduced spending on new equipment, Shu said.
However, gross margin is expected to be sustainable at 70 percent this year, Shu said.
“Weak end demand and low visibility has [negatively] impacted global semiconductor companies’ capital budgets. Our customers have also become more cautious about spending, which lends short-term uncertainty to our shipments and revenue,” Shu said.
However, “the impact is on the wane,” he said.
Addressing investors’ concerns that customers’ reusing old equipment for new technology development could curtail demand, Pan said the “chance is very little. Every new technology involves some tailor-made features, which is unlikely to be used in different technologies.”
The worry came after Intel and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said reusing older equipment would help them save on capital spending, which is also considered by chipmakers as an important factor behind their capital spending cut this year.
TSMC is also one of HMI’s major customers.
To cope with industry volatility, HMI said it is developing inspection tools that can be used during high-volume manufacturing procedures.
Most existing inspection tools are used in research and development stages, it said.
HMI shares plummeted 8.09 percent to NT$1,080 yesterday after TSMC slashed its capital expenditure budget by as much as 27 percent.
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