IntelliEPI Inc (Cayman) (英特磊), which makes epitaxy-based compound semiconductor wafers, yesterday cut its revenue forecast for this year amid dwindling customer demand.
The company now expects revenue to drop by 5 to 15 percent from last year, reversing its earlier estimate of single-digit percentage growth after last year’s record-high revenue of NT$895.15 million (US$28.15 million). IntelliEPI attributed the downward revision to tepid demand for its indium phosphide (InP) wafers.
“We believe we can generate additional revenue from selling wafer manufacturing equipment and gallium arsenide [GaAs] wafers to offset the loss of indium phosphide wafer orders,” IntelliEPI chairman and CEO Kao Yung-chung (高永中) told an investors’ conference in Taipei yesterday.
Photo: CNA
IntelliEPI has received stable orders for GaAs and gallium antimony (GaSb) wafers used in military devices, Kao said.
The company is also in intensive talks with potential customers to sell wafer manufacturing equipment, he said.
Business “is recovering from a trough,” Kao said. “July revenue should be a baseline for assessing the company’s performance in the third and fourth quarters.”
Revenue last month jumped 11.14 percent year-on-year to NT$67.98 million, but cumulative revenue in the first seven months plummeted 37 percent annually to NT$353.49 million, company data showed.
The company’s InP wafers are used in high-speed fiber networks, while GaAs wafers are mainly used in automotive, military and aerospace devices. The company counts Skyworks Solutions Inc, Samsung Electronics Co and Win Semiconductors Corp (穩懋) among its customers.
IntelliEPI is sticking with its capacity expansion plan in Texas, after posting a quarterly loss last quarter, Kao said in response to an investor’s question.
The company in May made a pre-application for tax incentives and subsidies to US authorities. It plans to raise NT$220 million to finance the construction of a new facility in Texas next year, it said.
IntelliEPI drifted into the red last quarter, posting a loss of NT$20.2 million, compared with a net profit of NT$397 million in the first quarter and NT$60 million in the second quarter last year.
Earnings per share dropped to minus-NT$0.55 last quarter, from NT$0.01 a quarter earlier and NT$1.65 a year ago.
Gross margin plunged to 13.5 percent last quarter from 24.94 in the first quarter and 44.52 percent in the second quarter last year.
The company’s earnings performance last quarter was the weakest in about five years, due to a dip in the InP wafer business, Kao said.
Revenue contribution from InP wafers plunged to 15 percent last quarter, from 44.8 percent in the prior quarter, he said.
With business expected to recover in the third and fourth quarters, the company should be able to eke out a profit for the full year, it said.
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