GlobalWafers Co Ltd (環球晶圓), the world’s No. 6 wafer supplier, expects short-term inventory correction and macroeconomic uncertainty to curtail customers’ orders and weaken its revenue growth in the second half of this year, chairman and chief executive officer Doris Hsu (徐秀蘭) said yesterday.
Hsu said the overall semiconductor industry is facing headwinds as customers become more cautious about placing new orders as a spate of new risks surface, such as the yuan’s devaluation and slower growth in China.
“GlobalWafers is no exception. However, the impact will be smaller because we have broader product lines,” Hsu said. “For GlobalWafers, the second half will be a weaker period than the first half in terms of revenue.”
However, the company expects to maintain its profitability, Hsu told reporters on the sidelines of an investors’ conference ahead of the company’s initial public offering (IPO) on the Taipei Exchange later this year.
The IPO price is initially set at NT$73 per share.
GlobalWafers supplies wafers to a long list of the world’s chip manufacturers, from Texas Instruments Inc, Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電) and Infineon Technologies AG.
Its wafers are used mainly in the manufacturing of power management chips, which are installed in automotive and information technology devices, it said.
GlobalWafers, 71 percent owned by local solar wafer maker Sino-America Silicon Products Inc (中美晶), saw its net income rose 1.33 percent to NT$987 million (US$30.2 million) in the first six months, compared with NT$974 million in the corresponding period last year. Gross margin climbed to 25.8 percent from 22.6 percent.
Hsu said that the recent down-cycle in the semiconductor industry will be short term, given that there is much lower excessive inventory than the industry’s last slump, during the financial crisis in 2008.
“In fact, we are starting to see some encouraging signs lately… Two of our customers requested to ship products, which they originally ordered for October, earlier than schedule,” Hsu said. “Overall, we believe the industry is still healthy.”
The long-term outlook for the semiconductor industry is still quite upbeat, as semiconductor contents are increasing in a wide range of applications, such as cars, Hsu said.
Semiconductor unit growth is expected to expand to 1.02 trillion units in 2017, from 990.9 billion units this year, Hsu said, citing IC Insights’ forecast.
Building on this optimism, GlobalWafers is planning to spend NT$2 billion this year on capital expenditures, with the aim of expanding its 8-inch wafer capacities by about 10 percent.
Mark England, president of GlobalWafers’ US subsidiary, said the company’s plant in Texas still has a room for 25 percent capacity expansion.
He said he expects the expansion to be completed by the end of next year.
The expansion will boost the plant’s capacity by more than 100,000 wafers a month.
GlobalWafers operates seven factories in Taiwan, China, Japan and the US, with a total staff of 2,600.
The company is seeking more mergers and acquisitions, or building new plants in search of new growth engine, Hsu said.
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