Sat, Aug 11, 2018 - Page 12 News List

GlobalWafers eyes capacity boost

SEPTEMBER ANNOUNCEMENT:The company said that it has a lot of sites in mind and when plans are done, it would build a 12-inch fab to make high-end products

By Lisa Wang  /  Staff reporter

GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer maker, yesterday said that it would announce a new capacity expansion plan as early as next month as solid customer demand continues to boost prices and factory utilization.

As its capacities have been fully booked until deliveries in 2020, GlobalWafers said it is starting to negotiate new supply contracts with customers for deliveries from 2021 to 2025.

Average selling prices (ASP) of the company’s products would continue to increase, as prices for new contracts are likely be equal to, or slightly higher than, what was charged for deliveries to be made in the final quarter of 2020, the firm said.

An assessment for the expansion plan “is entering the final phase,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) told investors yesterday.

“We have a lot of sites [to choose from]... We will make a decision by the end of September,” Hsu said.

Once the plan is finalized, GlobalWafers intends to build a 12-inch fab to produce high-end products, she said.

Compared with GlobalWafers, local rival Wafer Works Corp (合晶) is more aggressive about capacity expansion.

Wafer Works said in June that it plans to increase production at a new 8-inch fab in Zhengzhou, Henan Province, China, this year to satisfy customer demand.

The fab has an installed capacity of 200,000 polished wafers per month, Wafer Works said.

Wafer Works also plans to boost capacity at an 8-inch fab in Shanghai by 60 percent and increase capacity at an 8-inch fab in Taoyuan’s Longtan District (龍潭) to 300,000 wafers next quarter.

GlobalWafers yesterday gave a rosy outlook for this year and next year, shrugging off investors’ concern about rising inventory among customers amid an upcycle that has been running for several quarters.

“Our customers’ inventories are very healthy,” Hsu said. “There is no sign indicating a slowdown in orders for our 8-inch, or 12-inch capacities.”

“Our view for the second half [of the year] and for next year is very positive. We have high confidence that revenue will continue to grow. Average selling prices will also continue to rise,” Hsu said. “The only uncertainty now is the foreign exchange rate.”

Aside from growth in revenue and ASP, gross margin is also to continue its uptrend this quarter, compared with 37 percent during the April-to-June period, Hsu said.

Commenting on the potential effects of the US-China trade dispute, GlobalWafers said that there would be minimal impact and it would be manageable.

The company has great flexibility in capacity arrangement to avoid potential 25 percent taxes proposed by the administration of US President Donald Trump, as the firm operates 15 fabs in 10 countries, GlobalWafers said.

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