GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday posted a quarterly net profit more than double that of a year earlier, as strong customer demand continued to squeeze capacity.
It expects the momentum to continue into next year as there are no signs of weakening demand, even amid speculation about negative effects from the escalating trade war between the US and China.
“We have heard that some memory companies plan to scale down their capital spending. We have double-checked with our strategic customers and key customers. They do not want to reschedule or delay wafer shipments,” chairwoman Doris Hsu (徐秀蘭) told investors in a teleconference. “Some customers have even placed orders for extra wafers.”
Many customers are optimistic about market conditions, she said, adding that only a handful expect short-term inventory adjustments in the first quarter next year.
Most customers carry little inventory, she added.
GlobalWafers saw preorders from strategic and long-term customers soar to a record-high NT$22 billion (US$710.02 million) as of last quarter, further evidence of exuberant demand for silicon wafers.
Silicon wafer shipments are primarily driven by strong demand for automotive devices, high-resolution image sensors, memory chips and power management chips, Hsu said.
The company plans to invest US$438 million in a new 12-inch fab in South Korea to handle increased market demand, it said, adding that the fab would have an installed capacity of 150,000 wafers a month when beginning mass production in 2020.
“Based on our latest checks with customers, silicon wafer demand will keep growing in 2019. It is very clear to us that ASP [average selling price] will be higher in 2019 than in 2018,” Hsu said.
Net profit surged 119 percent to NT$3.63 billion, from NT$1.65 billion in the same period last year. Earnings per share rose from NT$4.78 to NT$8.31, while gross margin surged to an all-time high of 39 percent from 26.29 percent a year earlier.
The company’s board approved a share buyback plan worth NT$1.2 billion. The firm plans to repurchase 4 million shares, or 9.35 percent of its total outstanding shares, at a price ranging from NT$250 to NT$300 each.
The buyback is to be launched today and run through Dec. 28.
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