Local chip designer Faraday Technology Corp (智原科技) yesterday posted a net profit of NT$146 million (US$4.78 million) for last quarter, a quarter-on-quarter increase of 160.71 percent thanks to strong demand for application-specific ICs used in smart meters, networking products and 5G small cells.
On an annual basis, net profit surged 67.82 percent from NT$87 million, while earnings per share rose to NT$0.59 from NT$0.22 a quarter earlier and NT$0.35 a year earlier.
The Hsinchu-based company expects revenue this quarter to fall by a single-digit percentage from last quarter’s NT$1.59 billion, the highest level in 13 quarters.
However, it still expects to register annual growth in revenue, Faraday chief financial officer Grace Tseng (曾雯如) said.
Gross margin is to remain at about 50 percent this quarter, compared with 50.4 percent last quarter, Tseng said, attributing the slight decline to non-recurring engineering (NRE) services on 14-nanometer technology.
The company is collaborating with Samsung Electronics Co to provide 14-nanometer chips.
Faraday president Steve Wang (王國雍) said that he is optimistic about next year, as customers are accelerating the pace of the design to the mass-production process.
In addition, the company is benefiting from the US-China trade dispute, Wang said.
As China builds its own chip manufacturing capabilities and reduces its dependence on US firms, the company has seen an increase in orders, he said.
Most chips designed in the past one or two years are entering the final stages of verification and are to enter mass production next year, he added.
Faraday charges royalty fees for the chips it designs for clients, mostly after they enter mass production. That royalty income is the firm’s biggest source of revenue, providing 59 percent last quarter.
“Growth momentum from smart meters is to carry into next year. Chinese customers are showing strong demand,” Wang said.
Faraday can leverage foundry capacity in China from its parent company, United Microelectronics Corp (UMC, 聯電), Wang added.
In addition, the company expects chips for artificial intelligence Internet of Things apps and enterprise solid-state drives to start contributing next year, he added.
Revenue from the NRE and intellectual property rights businesses would hit a new high this year, extending record growth in the third quarter, Wang said.
NRE contributed 26 percent of the company’s revenue last quarter, Faraday said, adding that most NRE services utilize relatively advanced 40-nanometer and 28-nanometer technologies.
The intellectual property rights business accounted for 14.6 percent of third-quarter revenue, it said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
UNCERTAINTIES: The world’s biggest chip packager and tester is closely monitoring the US’ tariff policy before making any capacity adjustments, a company official said ASE Technology Holding Inc (日月光投控), the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy. Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security. ASE subsidiary Siliconware Precision Industries Co (SPIL, 矽品精密) is participating in Nvidia