Nova Technology Corp (朋億), a high-technology process equipment supplier that specializes in serving semiconductor companies, yesterday gave a lukewarm forecast for next year as semiconductor companies in China and Taiwan are slowing down their new fab construction efforts due to an inventory-driven slump.
Nova said as customers did not cancel orders entirely, its backlog orders have climbed 6.22 percent annually to NT$12.5 billion (US$400 million), from NT$11 billion during the same period last year.
The number is an all-time high for the company, but Nova said it would take about two to two-and-a-half years for it to convert those orders into revenue — while it would have taken one year in the past — as customers suspended some of their new fab construction projects in response to an inventory-driven slump.
Photo: Grace Hung, Taipei Times
A lack of supply of some key materials such as engineering plastics is also playing a role in the situation, Nova said.
Key material shortages have been in place for the past two years, which led to a cost increase of at least 60 percent compared with two years ago.
“We are looking at a flat [year next year] as compared with the second half of this year. Demand does not look good. Some Chinese chipmakers have put off their construction of new fabs,” Nova president David Ma (馬蔚) told reporters in Taipei yesterday.
“We do not expect a significant growth in revenue unless we land new supply contracts overseas next year,” Ma said.
Powerchip Semiconductor Manufacturing Corp (力積電) this month announced that it is planning to build an ￥800 billion (US$5.42 billion) factory in Japan with financing from investment group SBI Holdings Inc and the Japanese government.
Powerchip makes drive ICs and power management ICs for customers on a contract basis.
Nova is also vying for a supply contract from Taiwan Semiconductor Manufacturing Co (台積電) for its factories in Kumamoto, Japan, given its long-term partnership with Japan’s Sumitomo Chemical Co, Nova said.
Besides, Nova is exploring new opportunities to supply process equipment to chip testing and packaging service providers, who are considering whether to build new capacity in Malaysia, Ma said.
China is the biggest revenue source for Nova, accounting for 54.5 percent of last quarter’s revenue of NT$6.45 billion.
Taiwan comes next, comprising 36.7 percent of Nova’s revenue.
The company’s main revenue source in Southeast Asia is Singapore, where United Microelectronics Corp (聯電), the second-biggest foundry company in Taiwan, is expanding a 12-inch fab, Ma said.
Net profits contracted about 6 percent year-on-year to NT$248 million in the third quarter, from NT$264 million in the same period last year. Its earnings per share dropped to NT$3.52 from NT$3.89.
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