Vanguard International Semiconductor Co (VIS, 世界先進), which makes driver ICs used in LCD panels, yesterday reported net income of NT$1.32 billion (US$43.3 million) for last quarter and said it planned to boost capital spending to NT$3.3 billion to expand capacity.
In the second quarter, the chipmaker made NT$1.32 billion. On an annual basis, last quarter’s net profit grew 8 percent from NT$1.23 billion a year earlier.
To expand capacity, Vanguard planned to increase spending on new equipment by NT$200 million to NT$3.3 billion this year, company president Fang Leuh (方略) told investors.
The spending “aims to overcome production capacity bottlenecks ahead of schedule,” Fang said.
Next year, capital spending would drop to NT$2.1 billion, Fang said.
Global 8-inch wafer capacity should be sufficient next year, but supply in Asia, including Taiwan, is set to be tight, Fang said.
If the global economy remains stable next year, Vanguard’s performance would be as good as this year, Fang said.
In the near term, Fang expected last quarter’s momentum to extend into this quarter, with strong demand from TVs and mobile phone segments.
However, demand could dwindle due to inventory correction in the power management IC segment, he said.
This quarter, Vanguard expects shipments to hold steady, compared with last quarter’s 479,000 8-inch wafers after posting a faster-than-expected 9 percent sequential growth, due to strong client demand and contribution from a new factory it bought from a local chipmaker Sumpro Electronics Corp (勝普).
“We foresee factory utilization to be about 100 percent this quarter,” Fang said.
Gross margin is expected to drop to between 32 percent and 34 percent this quarter, from last quarter’s 34 percent, partly due to the conversion of the Sumpro plant to make logic chips from memory chips, the chipmaker said.
Vanguard expects the conversion to be completed by the middle of next year.
The new factory is scheduled to produce 30,000 wafers a month by the end of this year, helping boost the company’s total capacity by 12 percent this year, Fang said.
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