Vanguard International Semiconductor Corp (世界先進) yesterday said revenue this quarter would drop by about 15 percent from last quarter, as customers digest inventory amid sluggish demand for consumer electronics during the slow season.
Vanguard, which makes driver ICs used in displays and power management chips, joined its global peers in giving a bleak outlook for the current quarter.
Revenue is expected to fall for a third consecutive quarter to between NT$7.9 billion and NT$8.3 billion (US$259.7 million and US$272.9 million) this quarter, compared with NT$9.57 billion the previous quarter, Vanguard said.
Photo: Ann Wang, Reuters
Its factory utilization rate is expected to fall by 10 percentage points this quarter, as customers continue to scale down orders, the chipmaker said.
The expected decline does not fully reflect the extent of an industry slump, as Vanguard has allocated a small part of its manufacturing capacity to help customers “pre-build” chip inventory for shipments at a later date.
Gross margin is expected to slide to 29 to 31 percent this quarter, from 39.2 percent last quarter, approaching the lowest level since the first quarter of 2020, the company said.
Falling average selling prices are also weighing on gross margin this quarter, the chipmaker said.
“We are working with customers to deal with the severe inventory correction cycle, as end-product market demand is depressed by the macroeconomic situation,” Vanguard chairman Fang Leuh (方略) told an online investors’ conference.
“The first quarter should be the coolest season as indicated by macroeconomy and customers’ expectations. That will be followed by a gradual recovery, but we are not clear how fast the recovery will be,” he said.
Vanguard said that it has seen inventory pressure mainly from driver ICs used in notebook computer displays, power management chips and industrial segments, such as data centers.
Driver ICs used in TV displays are expected to hit the bottom this quarter, it said.
Power management chips contributed 78 percent to Vanguard’s revenue last quarter.
In response to the slowdown, Vanguard halved its capital expenditure this year to about NT$10 billion, from NT$19.4 billion last year, by postponing the delivery of some new manufacturing equipment.
More than half of the capital expenditure would be allocated to building a new fab, Fab 5, and boosting wafer capacity there, the chipmaker said.
Vanguard would carry out its capacity expansion plans despite the industrial downturn, as it is obligated to supply wafers to customers based on long-term agreements signed before market sentiment soured.
The investment would help boost its manufacturing capacity by 8 percent this year from last year, the chipmaker said.
Vanguard said it is evaluating the possibility of investing in a new 12-inch factory to satisfy customers’ long-term demand for wafers.
Cost inefficiency makes it infeasible to invest in another 8-inch fab, it said.
Vanguard operates five 8-inch fabs.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
RSS