Semiconductor inventory corrections should end next quarter, paving the way for a pickup in demand in the second half of this year, GlobalWafers Co (環球晶圓) said yesterday.
As a majority of its customers believe demand would bounce back in the second half, the world’s No. 3 silicon wafer maker said it is keeping most of its factories fully utilized to ensure sufficient supply.
“Our customers have committed to take those wafers. They only requested to push back shipments by a month or two,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) told an investors’ teleconference.
Photo: Ritchie B. Tongo, EPA-EFE
“Overall industry inventory adjustment should be mostly resolved in the second quarter,” Hsu said. “We think the recovery will start in the second half of this year, or as late as the end of this year.”
Semiconductors used in power management applications, industrial devices and automotive devices would recover at a faster pace than those used in consumer electronics and memory chips, she said.
The company expects its revenue performance this year to be better than last year, she said.
The Hsinchu-based company reported record revenue of NT$70.29 billion (US$2.3 billion) for last year, rising 15 percent from NT$61.13 billion in 2021.
Gross margin this year should be similar to last year’s 43.2 percent, Hsu said.
The volatility of foreign-exchange rates is the crucial factor that decides the ups and downs of its gross margin, she said.
In response to investors’ concerns that Washington’s strict rules and profit-sharing scheme under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, along with less direct funding, could make GlobalWafers’ new Texas fab an unprofitable deal, Hsu said the company is closely following the development of the regulations.
GlobalWafers expects to have a clearer picture next month or in May as the US government is to release more details in a second-round announcement about rules and measures for material suppliers such as GlobalWafers, she said.
Based on its understanding, the company is likely to receive a bigger portion of direct funding, compared with the 5 percent and 15 percent of a project’s total expenditures stipulated by the CHIPS Act, as GlobalWafers is not eligible for an investment tax credit, she said.
That direct funding range is just a general estimate, as there is no fixed amount of funding regulated yet, she said.
GlobalWafers’ Texas fab is under construction and scheduled to start mass production in the first quarter of 2025 as planned, Hsu said.
More than 80 percent of its capacity has already been reserved by customers, she said.
Regarding concerns that Tesla Inc’s plans to cut its usage of silicon carbide (SiC) semiconductors by 75 percent could undermine GlobalWafers’ financial performance, Hsu said that electric vehicles were only one of many applications for SiC.
Besides, the company is not a pure SiC supplier, but a supplier of wafers, she added.
GlobalWafers said it would stick to its SiC capacity expansion plan, given its small scale and strong forecast of a compound annual growth rate of 34 percent from last year to 2027.
GlobalWafers’ net profit expanded 29.5 percent annually last year to NT$15.37 billion, reaching a record high. Earnings per share climbed to NT$35.31 from NT$27.27 in 2021.
The company also had a record NT$39.73 billion in prepayments from customers at the end of last year, it said.
Customers signing long-term supply agreements are required to prepay, it added.
‘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.
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,
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS