GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that its net profit last quarter was NT$3.86 billion (US$124.87 million), a record high, after gross margin rose to the highest level in the company’s history.
Net profit rose 3.76 percent during the January-to-March period from NT$3.72 billion in the fourth quarter of last year and grew 38.85 percent from NT$2.78 billion a year earlier.
Earnings per share rose to NT$8.88 from NT$8.51 in the previous quarter and from NT$6.36 a year earlier, the company said.
Gross margin reached 41 percent for the first time in the company’s history, compared with 38.5 percent in the previous quarter and 36.2 percent in the same period last year.
The strong results went against an industry slowdown that affected most semiconductor companies, particularly memorychip makers.
“Overall semiconductor market demand is weaker than last year,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) told an investors’ teleconference yesterday.
The industry’s inventory level would peak this quarter and would start to decline at the end of this quarter or next quarter, she said.
“A more [marked] recovery would come in the second half,” Hsu said.
GlobalWafers’ extensive coverage of long-term supply contracts with clients shields it against the industry’s weakness, she said.
The company has been keeping its inventory at a stable NT$7 billion since the fourth quarter of last year, she said.
GlobalWafers has honored almost every long-term agreement (LTA) with clients, with no breach of contracts last quarter, Hsu said in a bid to quell concern over reports that clients planned to negotiate lower prices amid the slowdown.
There were “no shipment push-outs or price renegotiations in the first quarter,” Hsu said. “That is why the impact on [our shipment] volume was lower than our peers without LTAs.”
Given soft demand in the semiconductor market, GlobalWafers last quarter started to provide some flexibility to its long-term clients, such as short-term, or monthly, reschedules for shipments and product swaps, Hsu said.
The company plans to continue to provide the flexibility this quarter, she said.
As its customers intend to fulfill their supply agreements, GlobalWafers expects average selling prices to be flat, or rise slightly this quarter from last quarter, Hsu said.
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