Win Semiconductors Corp (穩懋半導體), the world’s largest compound semiconductor foundry, said it bottomed out in the first quarter and expects factory utilization to improve, boosting sales and margins.
“We expect second-quarter revenue to increase by a mid-teen percentage quarter-on-quarter,” Win said in a presentation document released after its earnings conference on Thursday. “We expect second-quarter gross margin to be around the low 30s.”
The firm focuses on gallium-arsenide foundry services for customers in the communications sector and infrastructure-related applications.
End-market applications for its products include smartphones, tablets, base stations, optical fiber networks, satellite communications and automotive electronics.
First-quarter net income was NT$151 million (US$4.89 million), down 79 percent quarterly and annually, with earnings per share of NT$0.41, the lowest in five years.
Revenue totaled NT$3.62 billion, down 14 percent quarterly and 19 percent year-on-year.
“In the first quarter, due to a lower utilization rate and product mix changes, our gross margin declined by 7.6 percentage points sequentially to 25 percent and operating margin declined by 10.4 percentage points to 8.3 percent,” the company said.
As some Asian clients have been placing more orders since the Lunar New Year holiday, the company’s factory utilization rate would rebound this quarter from 50 percent in the first quarter and would continue trending up for the rest of the year, the Liberty Times (the Taipei Times’ sister newspaper) quoted Win Semiconductors senior vice president Steve Chen (陳舜平) as saying on Friday.
Spokesman Joe Tseng (曾經洲) said that based on experience, its gross margin could increase to 30 percent if its utilization rate recovers to between 75 and 80 percent, the Liberty Times reported.
Win Semiconductors is to spend between NT$6 billion and NT$7 billion this year to boost its monthly capacity to 37,000 wafers by the third quarter from 32,000 wafers at the end of last year, Tseng said.
The company’s shares have surged more than 75 percent so far this year on the expectation that 3D sensing products and 5G infrastructure would contribute to revenue.
Hwever, Jih Sun Securities Investment Consulting Co (日盛投顧) analyst Simon Lu (呂金源) said he has a neutral outlook on the stock, as growth in the smartphone market should slow this year and 5G contributions could be very limited.
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