Wafer Works Corp (合晶) yesterday said that annual revenue would continue to grow to exceed NT$10 billion (US$328.36 million) next year, bolstered by a significant capacity expansion from its fabs in China and at home.
The capacity expansion comes amid an ongoing scarcity in silicon wafer supply, which has boosted wafer prices and financial performances of wafer suppliers over the past year.
Wafer Works expects the supply crunch to persist this year.
“It is a seller’s market for silicon wafers. Demand has greatly surpassed supply,” company spokesman Mark Hsu (許明哲) told reporters. “Shipments and prices will continue to climb in the third quarter, extending an uptrend over the past [few quarters].”
Hsu declined to say how big the price increase would be.
The company last year hiked wafer prices 15 to 20 percent.
TIGHT LIPS
Larger local rival GlobalWafers Co (環球晶圓) was also tight-lipped about price increases.
However, on Monday it shared a similarly upbeat outlook on demand, saying that the current price uptick would extend into the next four years and its factory would be fully utilized through 2020.
Wafer Works is the world’s No. 6 silicon wafer supplier with 4 percent global market share last year, according to IHS Markit’s tallies. GlobalWafers, ranked No. 3, has a 16 percent market share.
To satisfy customer demand, Wafer Works plans to ramp up a new 8-inch fab in Zhengzhou, Henan Province, with an installed capacity of 200,000 polished wafers per month.
The company yesterday said it also plans to boost 60 percent of an 8-inch fab in Shanghai and increase capacity at an 8-inch fab in Taoyuan’s Longtan District (龍潭) to 300,000 wafers next quarter.
Based on the robust outlook, Wafer Works expects its revenue and net profits to grow this quarter and in the next two quarters, chairman Pat Chiao (焦平海) said in a statement.
‘MAJOR DRIVER’
“The ramp-up of the Zhengzhou fab will be a major driver for the company’s revenue this year,” Chiao said.
Vigorous customer demand has boosted revenue 40 percent in the first four months of this year to NT$3.5 billion, the company said.
Revenue last year rose 18.64 percent to NT$6.38 billion from NT$5.4 billion a year earlier.
Wafer Works returned to the black last year by making NT$195 million in net profit, or NT$0.67 per share.
During the January-to-April period, it has accumulated earrings of NT$0.78 per share, it said.
Shareholders yesterday approved a proposal to distribute a cash dividend of NT$0.4 per common share, representing a payout ratio of 60 percent.
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