Tue, May 07, 2019 - Page 12 News List

Formosa SUMCO sales fall on sagging wafer demand

By Lisa Wang  /  Staff reporter

Silicon wafer supplier Formosa SUMCO Technology Corp (台勝科) yesterday reported a 28 percent decline in revenue for last month amid slowing customer demand, boding ill for the revenue outlook this quarter.

Revenue plummeted at an annual pace of 28.72 percent to NT$960.11 million (US$31.05 million) last month from NT$1.35 billion in April last year. It also represented a monthly decline of 38.89 percent from NT$1.35 billion in March.

Last month’s revenue marked the lowest level in about 26 months.

“April revenue might be an early indicator of the company’s second-quarter business,” Formosa SUMCO vice president R.S. Chao (趙榮祥) said by telephone yesterday.

“Customers from the foundry and memory sectors are experiencing weak demand and asking for lower [wafer] prices,” Chao said.

Revenue might dip by a double-digit percentage sequentially this quarter, as foundry and memory customers are beset by inventory digestion in their supply chain, the company said.

The company counts the world’s largest foundry, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and DRAM chipmaker, Nanya Technology Corp (南亞科技), among its major customers.

Nanya Technology has axed this year’s capital spending for a second time to cope with flagging demand.

First-quarter revenue dropped 13.64 percent sequentially and 4.61 percent from a year earlier to NT$3.64 billion, the company said in a filing with the Taiwan Stock Exchange.

“We are suffering more than our peers because we sign [supply] contracts on a quarterly basis, rather than on a longer-term basis,” it said.

Local rival GlobalWafers Co (環球晶圓) bucked the industry downtrend, as its first-quarter revenue rose 12.09 percent from a year earlier to NT$15.59 billion.

GlobalWafers, the world’s third-largest silicon wafer maker, said that more than 80 percent of its 12-inch wafers are sold through multi-year contracts with clients.

Demand for 8-inch wafers remains robust with its 8-inch wafer plant in a Milan, Italy, suburb maintaining a capacity utilization rate of 100 percent this year.

Formosa SUMCO is scheduled to release its financial results for last quarter on Wednesday next week, Chao said.

The company is 46.95 percent owned by SUMCO Techxiv Corp, while Formosa Plastics Corp (台塑) and its investment arm hold a combined 38 percent share.

Shares of Formosa SUMCO fell 2.94 percent to NT$115.50 yesterday, while GlobalWafers dipped 3.57 percent to NT$338.

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