Vanguard International Semiconductor Co (世界先進), which makes power management ICs and driver ICs for displays, yesterday said that it would raise capital spending by about 35 percent for this year to boost 8-inch wafer capacity amid strong customer demand.
For the whole of this year, Vanguard plans to spend NT$3.5 billion (US$118.62 million) on new equipment and facilities, up from a capital spending budget of NT$2.6 billion disclosed in February.
The additional spending would be mostly for its newly acquired fab in Singapore, as Vanguard plans to invest a total of NT$1.9 billion this year and next year to increase the fab’s capacity to 40,000 8-inch wafers a month in the first half of next year, up from 30,000 wafers currently.
Photo: Hung Yu-fang, Taipei Times
The Singaporean fab has a maximum production capacity of 60,000 wafers a month, Vanguard said.
The chipmaker said it would continue to gradually add capacity.
“What we currently see is that customer demand for 8-inch wafers is very strong, which is also reflected in the overall 8-inch wafer market,” Vangurad chairman Fang Leuh (方略) told a teleconference.
As 8-inch wafer capacity worldwide is limited, “demand is to exceed supply significantly in the second half of this year. Supply constraints are to persist at least through the first half of 2021,” Fang said, adding that the bullish outlook would be supported by falling COVID-19 infections and a rebounding world economy next year.
He also expects across-the-board growth next year.
This quarter, customers continue to show strong appetite for driver ICs used in large TV panels and power management ICs, Vanguard said.
That would bring Vanguard’s revenue this quarter to NT$8 billion to NT$8.4 billion, indicating a sequential growth of up to 2 percent.
Higher revenue contribution from the Singaporean fab also helps, the chipmaker said.
“Customers’ demand for the company’s wafer foundry remains similar to the second quarter. We have order visibility of about two months,” Fang said.
Gross margin would be 32 to 34 percent this quarter, compared with 33.2 percent last quarter, the company said.
Vanguard reported net profit of NT$1.48 billion for last quarter, unchanged from NT$1.48 billion in the same period last year, but up 0.4 percent from NT$1.476 billion in the first quarter.
Revenue was NT$8.23 billion last quarter, up 4.9 percent quarter-on-quarter and 18.9 percent year-on-year, as the company benefited from increased demand from power management ICs used in data centers, servers and work-from-home-related devices, as well as driver ICs for TV panels.
Growth was eroded by weakness in automotive applications and driver ICs for small flat panels used in mobile phones, the chipmaker said.
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