Vanguard International Semiconductor Corp (世界先進), which makes controller chips for LCD panels, yesterday said it expects demand to continue growing next quarter, as customers rebuild inventories.
The Hsinchu-based chipmaker said that after three quarters of inventory digestion, customers have started rebuilding their inventories this quarter, especially in the consumer electronics segment.
“Customer restocking is strong, with the demand for [controller chips for] TVs showing resilient sequential growth,” Vanguard vice president D. L. Tseng (曾棟樑) told an investors’ conference in Taipei.
Tseng attributed the uptrend in demand partly to the Rio Olympics in August. Revenue from chips used in consumer electronics accounted for 21 percent of Vanguard’s sales last quarter.
Given a marked recovery in customer demand, Vanguard said it was confident of surpassing its first-quarter target.
“I am certain that we will meet our first-quarter guidance,” Tseng said.
Foreign-exchange rates also favor the company and could help boost its profit this quarter, he said.
The chipmaker predicted in January that revenue this quarter would grow 10.22 percent to NT$61.5 billion (US$1.9 billion), compared with last quarter’s NT$54.82 billion.
Gross margin is expected to improve to as high as 33.5 percent this quarter from 27.5 percent last quarter, it said.
HSBC Securities Taiwan Corp forecast revenues of NT$6.01 billion for this quarter.
While the company received a larger amount of orders at the end of this month, order visibility remains short, extending only through the middle of May, the company said.
Vanguard is a 28 percent-owned subsidiary of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which accounts for about 20 to 30 percent of its revenue, Tseng said.
In addition to existing products, Vanguard has tapped into the fingerprint sensor market and started small volume shipments to clients.
However, fingerprint sensors are not expected to have a meaningful contribution to its revenue in the near term, Tseng said.
The company is also developing chips used in automobiles and has applied for qualification certificates for some of its products.
Vanguard said it would fully convert its 12-inch fab to logic chip manufacturing by the end of the year, while reducing its memory chip production to zero from 10 percent.
Vanguard shares yesterday soared 3.16 percent to NT$52.3, outperforming the TAIEX, which jumped 1.39 percent.
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