Vanguard International Semiconductor Corp (世界先進), a supplier of power management chips, yesterday raised its capital expenditure for this year by 70 percent to NT$8.5 billion (US$304.09 million), as it prepared early for next year’s capacity expansion because of longer equipment delivery times.
The Hsinchu-based chipmaker initially planned to spend NT$5 billion on new facilities and equipment this year, up 41 percent from last year’s capital expenditure of NT$3.45 billion.
The upgraded capital spending does not include the purchase of an older fab from AU Optronics Corp (AUO, 友達光電) for NT$905 million, Vanguard said, adding that the fab has a monthly capacity of 40,000 8-inch wafers.
Photo: Grace Hung, Taipei Times
“Constant increases in wafer demand from customers have given us clearer order visibility than in the past. We expect the company’s factory utilization rate to be very high throughout 2021,” Vanguard chairman Fang Leuh (方略) told investors in a teleconference.
“Given the supply-demand imbalance, some customers have booked orders in advance to ensure that our capacity can support them next year,” Fang said.
Asked about the possibility of acquiring a less advanced 6-inch fab, Fang said that the company would clinch a deal as long as the fab has a reasonable price and a good location.
Memorychip maker Macronix International Co (旺宏) is expected to sell a 6-inch fab in Hsinchu.
Vanguard said that its expansion plan aims to address increases in customer demand in the mid to long term, as the chip shortage is expected to extend into next year.
Customers must pay a deposit and prepay to acquire new 8-inch wafer capacity, given the expense of the equipment and the hefty depreciation costs, the chipmaker added.
The prepayments would help safeguard Vanguard’s gross margin and curb increases in depreciation costs, it said.
Much of this year’s capital spending would be used to add 8,000 8-inch wafers per month at a Taoyuan fab later this year and an additional 16,000 wafers per month there in the first half of next year.
For the whole of this year, the chipmaker expects a mild increase in capacity over last year.
Vanguard, which made about 60 percent of its revenue from power management ICs last quarter, yesterday gave positive guidance for this quarter, fueled by resilient demand from display driver ICs used in TVs and PCs.
Revenue this quarter is expected to increase 11 percent sequentially, or up to NT$10.2 billion from NT$9.18 billion last quarter.
The chipmaker based its expectations on a 5 percent price hike from last quarter and a 5 percent increase in capacity, primarily at its Singaporean fab.
Gross margin this quarter is to improve to between 39 percent and 41 percent, from 38.1 percent last quarter, the chipmaker said.
In the January-to-March quarter, Vanguard saw its net profit surge 46.36 percent to NT$2.21 billion from NT$1.55 billion last year. On a quarterly basis, net profit increased 21.43 percent from NT$1.82 billion in the fourth quarter of last year.
Earnings per share climbed to NT$1.34 last quarter, compared with NT$1.1 in the previous quarter and NT$0.89 a year earlier.
Gross margin also improved to 38.1 percent last quarter, up from 31 percent in the same period last year and 37.4 percent three months ago.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS