Win Semiconductors Corp (穩懋半導體), the world’s largest pure-play gallium arsenide foundry, yesterday said that it is slowing capacity expansion this year as sluggish demand from Chinese smartphone chip designers is driving factory utilization to less than 70 percent this quarter.
The company plans to add 2,000 wafers per month to its plant in Taoyuan’s Gueishan District (龜山) by the end of this year, instead of 4,000 wafers as planned previously.
However, construction of a new factory in Kaohsiung’s Lujhu District (路竹) is to proceed as planned, as the new capacity aims to address longer-term demand in the next two to three years.
Photo: Screen grab from the Win Semiconductors Corp Web site
Besides, crucial semiconductor equipment delivery time has been stretched to between one year and one-and-a-half years since the outbreak of the COVID-19 pandemic, Win Semiconductors said.
“Chinese smartphone supply chains have entered an inventory correction period since the second half of the first quarter, which have had a severe impact” on suppliers, Win president Steven Chen (陳舜平) told investors on a conference call.
“As some of China’s major cities are under lockdown due to Beijing’s COVID-19 policy, it could continue to dampen consumer demand. Thus, we are conservative about how soon the inventory correction would be over. We do not have a clear picture about our customers’ situation,” Chen said.
“The correction is most marked among Chinese smartphone power amplifier chip designers,” he said.
Those customers account for 30 to 40 percent of the company’s smartphone power amplifier shipments, Chen said.
Reflecting dwindling demand, factory utilization is expected to slide further this quarter from 70 percent last quarter and 100 percent in the final quarter of last year, Win Semiconductors said.
Revenue this quarter is expected to dip to a high-single-digit percentage quarter-on-quarter from NT$6 billion in the first three months of this year due to weak cellular power amplifier demand, the company said.
Cellular power amplifiers accounted for about 50 percent of the company’s revenue last quarter.
Gross margin is forecast to drop to a multiyear low percentage in the high 20s or low 30s this quarter from 30.6 percent last quarter.
Despite the recent industrial turbulence, the company still holds an optimistic view about the mid to long-term business outlook, driven by 5G smartphones, 5G base stations, WiFi chips, 3D sensors and chips used in low-earth-orbit satellites, Chen said.
The company is maintaining its capital spending plan of NT$12 billion for this year, it said.
The firm’s first-quarter net profit declined 28 percent year-on-year to NT$786 million from NT$1.1 billion a year earlier.
On a quarterly basis, net profit plummeted 53 percent from NT$1.69 billion.
Earnings per share dipped to NT$2.08 last quarter, from NT$2.72 a year earlier and NT$4.19 in the previous quarter.
Gross margin tumbled to 30.6 percent last quarter from 33.5 percent a year earlier and 40.5 percent in the fourth quarter of last year, primarily due to lower factory utilization.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS