Vanguard International Semiconductor Corp (世界先進), which makes controller chips used in LCD panels, yesterday posted its weakest quarterly net profit in five quarters, as flagging smartphone demand in China and an appreciating local currency ate into profitability.
Net profit contracted 15 percent to NT$1.15 billion (US$38.12 million) in the quarter ending March 31, compared with NT$1.35 billion in the same quarter last year, company data showed.
The company booked a non-operating loss of NT$84 million for last quarter, mostly from a foreign-exchange loss, compared with a non-operating profit of NT$171 million in the previous quarter and NT$36 million a year earlier.
Vanguard expects the impact of a rising currency to escalate this year. A more robust New Taiwan dollar would reduce its gross margin by 2 percentage points this quarter, based on the company’s foreign-exchange assumption of NT$30.2 to the US dollar, up 4 percent from NT$31.4 last quarter, Vanguard said.
Gross margin is forecast to slip to between 29 percent and 31 percent this quarter from last quarter’s 32.1 percent, a five-quarter low, Vanguard said.
Last quarter, a rising NT dollar shaved 0.3 percentage points off its gross margin.
“Unfavorable foreign-exchange rates could cut into the company’s growth in the first and second quarters,” Vanguard vice president D.L. Tseng (曾棟樑) said.
Higher raw wafer prices and increasing labor costs also nibbled at gross margin, the chipmaker said.
Revenue this quarter is forecast to fall by between 0.16 percent and 6.55 percent to the range from NT$5.85 billion to NT$6.25 billion from NT$6.25 billion in the first quarter, Vanguard said.
The revenue projection fell short of most analysts’ expectations. Credit Suisse analyst Randy Abrams was expecting the chipmaker to make NT$6.27 billion this quarter, while others forecast a higher figure of NT$6.83 billion on average, according to Credit Suisse report.
Customer demand for controller chips used in LCD TVs and power management ICs should pick up this quarter from last quarter, while some customers are still digesting inventory, Vanguard chairman Leuh Fang (方略) told investors.
Overall, wafer demand will be flat this quarter compared with last quarter, Fang said.
“We have about two months of order visibility,” Fang said.
Vanguard expects demand to post a marked improvement in the second half, following the seasonal pattern.
“Chinese smartphone companies largely expect demand to return to growth in the second half, with restocking picking up,” Vanguard worldwide sales and planning division vice president Thomas Chang (張東隆) said.
Asked about Vanguard’s progress in tapping the fingerprint sensor market, Chang said customer adoption is slow, but shipments are expected to surge in the fourth quarter.
Fingerprint sensors are forecast to contribute 5 percent to the company’s total revenue at the end of the year, the chipmaker said.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
It is challenging to build infrastructure in much of Europe. Constrained budgets and polarized politics tend to undermine long-term projects, forcing officials to react to emergencies rather than plan for the future. Not in Austria. Today, the country is to officially open its Koralmbahn tunnel, the 5.9 billion euro (US$6.9 billion) centerpiece of a groundbreaking new railway that will eventually run from Poland’s Baltic coast to the Adriatic Sea, transforming travel within Austria and positioning the Alpine nation at the forefront of logistics in Europe. “It is Austria’s biggest socio-economic experiment in over a century,” said Eric Kirschner, an economist at Graz-based Joanneum
BUBBLE? Only a handful of companies are seeing rapid revenue growth and higher valuations, and it is not enough to call the AI trend a transformation, an analyst said Artificial intelligence (AI) is entering a more challenging phase next year as companies move beyond experimentation and begin demanding clear financial returns from a technology that has delivered big gains to only a small group of early adopters, PricewaterhouseCoopers (PwC) Taiwan said yesterday. Most organizations have been able to justify AI investments through cost recovery or modest efficiency gains, but few have achieved meaningful revenue growth or long-term competitive advantage, the consultancy said in its 2026 AI Business Predictions report. This growing performance gap is forcing executives to reconsider how AI is deployed across their organizations, it said. “Many companies
RSS