Win Semiconductors Corp (穩懋半導體) yesterday said revenue for this quarter would continue increasing from last quarter as handset and Wi-Fi-related clients become more aggressive in increasing their inventories ahead of new product launches in the second half of the year.
“Moving forward, we are expecting our customers to continue their inventory restocking in the third quarter for both seasonal demand and new product launches,” the Linkou (林口), Taoyuan County-based company said in a statement after its quarterly earnings call. “Accordingly, we expect our revenues for the third quarter to grow sequentially and we aim to sustain our margins at the second-quarter levels.”
Win Semiconductors, the world’s largest pure-play gallium arsenide (GaAs) foundry, provides foundry services for GaAs components used in handsets, including smartphones.
The Taiwanese foundry counts Singapore’s Avago Technologies Ltd, Japan’s Murata Manufacturing Co, China’s RDA Microelectronics Inc (銳迪科) and US-based Skyworks Solutions Inc — who all produce GaAs-based electronic devices used by Apple Inc, Samsung Electronics and Nokia Oyj in their products — as its major clients.
In the April-to-June quarter, Win Semiconductors reported net income of NT$439.88 million (US$14.64 million), or earnings per share (EPS) of NT$0.59, with revenue of NT$2.46 billion.
Last quarter’s results represented an increase of 106 percent from net income of NT$213.38 million, or EPS of NT$0.29, in the first quarter. Revenue also expanded by 48 percent from NT$1.67 billion the previous quarter.
The figures were 60 percent lower than a year earlier, when net income was NT$546.78 million, or NT$0.72 per share. Revenue was NT$3.18 billion in the same period last year, company data showed.
The company’s gross margin and operating margin improved to 35 percent and 23.1 percent respectively last quarter from 30 percent and 12.2 percent in the first quarter. A year ago, the company reported gross margin of 32.84 percent and operating margin of 24.01 percent.
Win Semiconductors said a strong sequential growth of 48 percent in revenue last quarter indicated that its customers had started a new phase of inventory restocking in preparation for seasonal demand.
The company said improving gross margin amid falling revenue on an annual basis also showed its efforts to enhance operating efficiency, while growing non-handset business had begun to bear fruit.
In the second quarter, the company’s revenue breakdown by applications showed that power amplifier (PA) chips for handsets accounted for about 55 percent of its total sales, followed by Wi-Fi-linked components for 30 percent and 25 percent for infrastructure-related orders, such as those from fiber-optic, satellite and national defense businesses.
The company’s cumulative sales from January through last month were 28.44 percent lower year-on-year at NT$5.09 billion, but the declining pace was better than the 31.56 percent annual fall registered in the first six months.
“We believe our business is back on track with normal seasonality,” Win Semiconductors said in the statement, adding that factory utilization rate is to stay at about 80 to 90 percent this quarter.
However, analysts said the company’s GaAs-based PA products still face potential challenges in the second half.
That includes Qualcomm Inc’s complementary metal-oxide-semiconductor PA for 64-bit long-term evolution chipset and the increasing adoption of multi-band multi-mode PAs in today’s mobile handsets, they said.
Win Semiconductors shares closed 2.04 percent lower at NT$26.45 yesterday, before the company unveiled its latest earnings and sales data.
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