Vanguard International Semiconductor Corp (世界先進) on Thursday said it expects sales this quarter to meet the middle to high end of its guidance amid tight 8-inch production capacity.
The Hsinchu-based company in October forecast that revenue this quarter would be between NT$6.8 billion and NT$7.2 billion (US$225.14 million and US$238.39 million).
Compared with NT$7.13 billion in the July-to-September period, that would be a sequential decline of 4.5 percent or a gain of 1.1 percent respectively.
“Currently, the strongest demand for the company’s 8-inch wafers is from power management integrated circuits, LCD driver ICs and image sensors,” the Chinese-language news Web site Cnyes.com quoted Vanguard chairman Fang Leuh (方略) as saying at a luncheon with minority groups in Hsinchu.
“With the rise in 5G demand, the market is recovering faster than expected and tight 8-inch wafer capacity situations have already occurred,” Fang said.
With the addition of a fab in Singapore in the first quarter of next year, it is expected that the firm’s production capacity would increase by 15-20 percent annually and revenue would also rise, Fang said.
Vanguard is to complete its acquisition of the 8-inch fab in Singapore from GlobalFoundries Inc on Tuesday, he said.
Vanguard specializes in LCD driver ICs and logic ICs, as well as power management ICs and complementary metal-oxide semiconductor image sensors.
Inventories of driver ICs for large panels have been greatly reduced after adjustments by customers for half a year and demand should return to normal in the near term, Fang said.
Demand is increasing for fingerprint IC sensors, he said.
As the company’s global peers also face tight supplies of 8-inch wafers, GlobalFoundries would outsource orders to Vanguard’s Singapore fab, the Chinese-language Liberty Times (the sister newspaper of the Taipei Times) reported on Friday, citing Fang.
Vanguard plans to allocate between NT$2 billion and NT$3 billion for capital expenditure next year to focus on the conversion of manufacturing processes and the deployment of project deliverables, the Liberty Times reported.
As demand for power management ICs, which accounted for 60 percent of Vanguard’s sales in the third quarter, would remain strong in the near term, and with new customers likely to increase thanks to China’s semiconductor localization efforts, the company is expected quickly ramp up utilization at the Singapore plant, SinoPac Securities Investment Service Corp (永豐投顧) said.
Vanguard’s business performance in the first quarter of next year would be better than the seasonal pattern in slack seasons, but the Singapore plant’s initial operations might have an adverse effect on average gross margin, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a client note on Friday.
Vanguard shares rose 2.43 percent to close at NT$80 in Taipei trading on Friday. They have advanced 34.45 percent this year.
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