Vanguard International Semiconductor Corp (世界先進) yesterday said that it expects revenue to grow up to 7.78 percent sequentially this quarter, a slow season, amid steady chip demand and contributions from newly acquired fab.
The Hsinchu-based chipmaker also said that it expects the effects of the COVID-19 outbreak in China to be temporary, and is optimistic about 8-inch wafer demand this year, given rising demand for 5G-related applications, driver ICs used in ultra-high-definition displays and power management chips.
“Most expect the COVID-19 outbreak to bring a short-term interruption. The impact should be no longer than two quarters,” Vanguard chairman Fang Leuh (方略) told an investors’ conference. “Customers are still firm about orders.”
Revenue is expected to climb to an all-time high of between NT$7.5 billion and NT$7.9 billion (US$246.69 million and US$259.84 million) this quarter, compared with NT$7.33 billion last quarter, the chipmaker said.
“The company has two months of order visibility till the end of the first quarter, which is underpinned by stable customer demand for Vanguard’s wafers and contributions from the Singapore fab,” Fang said.
Vanguard acquired an 8-inch fab in Singapore from US-based GlobalFoundries Inc for US$236 million to solve prolonged capacity constraints.
Vanguard said that gross margin would be under pressure due to higher manufacturing costs and increases in depreciation costs from the Singapore fab.
An unfavorable foreign exchange rate would also reduce its gross margin, the company said.
Gross margin this quarter is expected to dip between 29 percent and 31 percent, compared with 36.1 percent in the final quarter of last year, it said.
With the new fab, Vanguard expects total capacity to grow 11 percent quarter-on-quarter to 234,000 8-inch wafers this quarter.
Vanguard said it plans to spend NT$2.6 billion on new equipment this year, which would grow its capacity by 15 percent annually this year.
Vanguard said that net profit inched up 1.1 percent to NT$1.497 billion in the final quarter of last year, compared with NT$1.496 billion in the previous quarter. On an annual basis, net profit fell 22.3 percent from NT$1.93 billion.
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