Vanguard International Semiconductor Corp (世界先進) yesterday said that its second-quarter net profit grew 7.2 percent from a year earlier, thanks to robust demand for power management chips used in 5G base stations.
After-tax profit came in at NT$1.48 billion (US$47.63 million), rising from NT$1.42 billion a year earlier and 8.2 percent from NT$1.39 billion in the previous quarter.
Earnings per share rose to NT$0.9 from NT$0.86 a year earlier and NT$0.84 a quarter earlier, beating the company’s forecast three months ago because of a favorable foreign-exchange rate and better product portfolio.
Sales of power management chips surged to a record 61 percent of overall revenue last quarter, while driver ICs used in televisions and PCs fell to 30 percent due to slower-than-expected inventory digestion, the company said.
The Hsinchu-based chipmaker expects worldwide 5G deployment to continue to drive its revenue growth this quarter, while demand for driver ICs would remain weak.
“We are not seeing significant seasonal upticks in the second half of this year as we did before. Typically, the second half is the high season, as the back-to-school season and the year-end holiday shopping spree fuel demand,” Vanguard chairman Fang Leuh (方略) told an investors’ conference.
The protracted trade spat between the US and China has continued to weigh on global economic growth, which is posing a risk to sales of end products and chips used in them, while trade tensions between Japan and South Korea have added uncertainty to the world economy, he said.
“Client demand for our wafers this quarter is similar with that in the second quarter,” Fang said.
“Order visibility is about two months through the end of the third quarter,” he added.
To cope with the sluggish demand for its other chips, Vanguard trimmed its capital spending for this year by 8.55 percent to NT$10.7 billion from the NT$11.7 billion it disclosed on April 30.
The company plans to earmark about NT$7.7 billion to finance the acquisition of an 8-inch fab from GlobalFoundries Inc in Singapore.
Vanguard is to take over the fab at the end of this year.
Revenue this quarter is expected to come in at NT$6.9 billion to NT$7.3 billion, indicating zero to 5 percent growth from last quarter’s NT$6.92 billion, Fang said.
Gross margin is expected to come in at 35.5 and 37.5 percent from 37 percent in the second quarter, he added.
Meanwhile, chief financial officer Tseng Dong-liang (曾棟樑) is to retire on Aug. 31 and senior financial director Amanda Huang (黃惠蘭) is to take over his post in September, the company said.
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