Vanguard International Semiconductor Corp (世界先進), which makes chips used in liquid-crystal-display (LCD) panels, yesterday posted its first quarterly loss in more than six years as the global economic recession hurt demand.
However, the Hsinchu-based chipmaker told investors that the first quarter was likely to be the trough, matching comments that parent company Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) made the previous day.
TSMC, which holds a 36 percent stake in Vanguard, told investors on Thursday that its business may hit bottom this quarter.
“The operation will remain weak in the upcoming three months, but there is slim likelihood of seeing further declines after the two-quarter slump,” Vanguard chairman Lin Chuan (林全) told ETTV news channel.
In the fourth quarter of last year, Vanguard posted losses of NT$526 million (US$15.56 million), or NT$0.3 per share, compared with net profits of NT$1.18 billion or NT$0.68 per share a year ago and NT$326 million or NT$0.19 per share in the third quarter of last year, a company statement said.
The last time Vanguard posted quarterly losses was in the first quarter of 2003, during which it lost NT$740 million.
“Due to the persistent economic slump globally, customers were conservative about demand,” company spokesman Robert Hsieh (謝徽榮) said in a statement.
Shipments may be halved in the first three months of this year, compared with 162,000 wafers shipped in the fourth quarter of last year, Hsieh said.
Reflecting falling demand, factory usage may fall to 25 percent in the first quarter, compared with 46 percent in the fourth quarter of last year.
The gross margin may deteriorate fast to between minus 65 percent and minus 69 percent this quarter, from minus 9.6 percent last quarter, Hsieh said. Average selling price may slide by low single-digit percentage points from the previous quarter, he said.
Revenues in the fourth quarter declined 38 percent to NT$2.68 billion from the third quarter of last year, he said.
Revenue from chips used in PCs fell to about 37 percent of the chipmaker’s total revenues last quarter mainly because of sluggish demand for the driver ICs used in computer panels as customers digested inventory, the statement said.
For the full year last year, Vanguard’s earnings plunged 76 percent to NT$1.04 billion from NT$4.32 billion in 2007. Revenues slid slightly by 1 percent to NT$16.12 billion last year, from NT$15.97 billion in 2007.
Commenting on Vanguard’s fourth-quarter figures, a Citigroup analyst said the company’s NT$0.3 loss per share and its operating margin of minus 21 percent for the fourth quarter were better than the market expected.
But Andrew Lu (陸行之), an analyst with Citigroup Global Markets in Taipei, said the company’s first-quarter guidance on wafer shipments, average selling price and factory utilization were worse than what TSMC provided on Thursday.
Especially, Vanguard’s gross margin guidance of a minus 65 percent to minus 69 percent in the first quarter could imply an “operating margin of negative 90 percent, if operating expenses cannot be cut in-line with order cuts,” Lu said in a client note yesterday.
Despite the dire near-term figures for the company, “We expect the trough to pass soon as the LCD sector is showing some signs of life,” Lu wrote, attributing his optimism to the sign that inventory cuts on LCD driver ICs are emerging and to the relatively low valuation of Vanguard shares compared to those of its loss-making peers.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS