Win Semiconductors Corp (穩懋半導體), the world’s largest gallium arsenide wafer foundry, yesterday posted record-high net income for last quarter, driven by strong demand for power amplifiers used in 5G mobile phones and compound semiconductors used in 3D sensors.
The company expects the growth momentum of 5G-related and 3D sensing devices to carry into this year, fueling revenue to grow beyond last year’s record-high NT$21.38 billion (US$711.91 million), up 23 percent annually.
It is premature to predict how an outbreak of COVID-19 would affect its businesses, given uncertainty over containment of the coronavirus and the firm’s diverse customer base, Win Semiconductors said.
The company said that it would stick to its capacity expansion of 5,000 wafers per month to cope with increasing demand for vertical-cavity surface-emitting laser chips that are primarily used in 3D sensors.
Win Semiconductors is a major supplier to Lumentum Holdings Inc, which supplies 3D sensors for Apple Inc’s iPhone.
“We believe 5G-related [applications] is a major growth driver this year,” Win Semiconductors president Kyle Chen (陳國樺) told investors in a teleconference.
“The penetration rate of 5G mobile phones is forecast to climb to between 15 percent and 20 percent this year, from just 1 percent last year,” he said.
Win Semiconductors would benefit from such explosive growth in 5G mobile phone shipments, as each smartphone is equipped at least two more power amplifiers than a 4G cellphone, Chen said.
Power amplifiers for 5G smartphones are expected to make up a bigger portion of the company’s total shipments this year, from 10 percent last year, he said.
Last year was a banner year for the company in expanding to gallium nitride chips for 5G-enabled base stations, Win Semiconductors said, adding that it would expand capacity for such chips after securing orders from a key client.
A seasonal down cycle would reduce revenue this quarter, it said, forecasting that would revenue dip by a low double-digit percentage from NT$4.21 billion last quarter.
“The first quarter is a slow season, as mobile phone demand usually dwindles,” Chen said, adding that fewer working days would also trim revenue.
Gross margin would fall to the low 40 percent range this quarter, from 44.2 percent last quarter, the company said.
Win Semiconductors reported that net income last quarter grew 12.2 percent to NT$1.84 billion, from NT$1.64 billion in the previous quarter and compared with NT$733 million in the same quarter a year earlier.
For last year as a whole, net income totaled NT$4.4 billion, soaring 43.32 percent from NT$3.07 billion in 2018, with earnings per share rising from NT$7.39 to NT$10.59, the company said.
The company plans to spend NT$6 billion on new facilities and equipment, slightly up from NT$5.3 billion last year, it said.
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