Vanguard International Semiconductor Co (世界先進) yesterday said that it is raising its wafer prices and seeking new acquisition deals to further expand capacity, as there is strong demand from customers for driver ICs used in notebook computers and TV displays, as well as power management chips.
The chipmaker’s comments came after it posted its best quarterly net profit in about seven quarters at NT$1.53 billion (US$52.75 million) for the quarter ending Sept. 30, an increase of 3 percent from NT$1.48 billion a quarter earlier. That represented growth of 2.1 percent from NT$1.5 billion a year earlier.
The Hsinchu-based chipmaker said it is launching a new pricing scheme this quarter as there has been persistently solid demand for driver ICs for TV displays and power management chips, resulting in a supply crunch.
Photo: CNA
The strong demand extended order visibility to the first half of next year, company chairman Fang Leuh (方略) said.
The chipmaker usually has three-month order visibility.
Vanguard said that as growth would be across the board, it expects factory utilization to remain at a high level in the period through June 30, compared with 90 percent last quarter.
Demand from the automotive industry is also recovering, it added.
“Compared with last epicycle in 2017, demand is showing structural changes — as the COVID-19 pandemic has changed people’s lifestyles and ushered in a slew of new demand — rather than simply being driven by seasonal factors,” Fang said.
“The arrival of the 5G era has also significantly increased consumption of power management chips used in [5G] smartphones... Those applications will support sustainable demand for 8-inch wafers in the mid-to-long term,” he said.
Vanguard plans to spend NT$3.8 billion on expanding capacity at its Singapore fab and its Taiwan fabs this year, Fang said.
The chipmaker said that it expects its total capacity to grow 15 percent year-on-year this year.
Aside from organic capacity expansion, the company is constantly scouting new acquisition deals, even beyond Taiwan and Singapore, to boost its production scale, Fang said.
About a year ago, Vanguard acquired an 8-inch fab in Singapore from GlobalFoundries Inc.
Growth momentum is expected to drive the chipmaker’s revenue this quarter to a new record high of NT$8.4 billion to NT$8.5 billion, Fang said.
That would represent quarterly growth of 0.67 to 5.47 percent from NT$8.34 billion last quarter.
Demand for driver ICs used in TVs and notebook computers remains strong this quarter, while demand for management ICs for smartphone displays is also picking up, the company said.
Power management ICs accounted for the biggest portion, or 55 percent, of the company’s revenue last quarter, it said.
Gross margin is expected to climb to about 36 percent this quarter from 34 percent last quarter, as higher wafer prices and a better product portfolio would absorb the adverse impact from the appreciation of the New Taiwan dollar against the US dollar, the firm said.
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