Tue, Apr 16, 2024 page12

• Powerchip Semiconductor reins in net losses by 79.2%

  • By Chen Cheng-hui / Staff reporter
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  Powerchip Semiconductor Manufacturing Corp (力積電) yesterday reported that its net losses last quarter shrank 79.2 percent from the previous quarter, reflecting improving gross margin as the company’s factory utilization increased and the cost of idle capacity was reduced.

  Net losses in the January-to-March period totaled NT$439 million (US$13.56 million), compared with losses of NT$2.11 billion during the previous three months, the pure-play wafer foundry firm said in a document released after the company’s earnings conference.

  Last quarter, Powerchip’s revenue fell 3.06 percent to NT$10.82 billion during the industry’s low season, compared with NT$11.16 billion the previous quarter, the company said.

  

  Powerchip Semiconductor Manufacturing Corp’s headquarters in the Hsinchu Science Park are pictured on Nov. 3, 2022.

  Photo: Lam Yik Fei, Bloomberg

  However, gross margin improved by 12.3 percentage points to 15.4 percent, while operating margin was minus-9.9 percent, better than the minus-18.1 percent recorded in the previous quarter, it said.

  Last quarter’s net losses translated into losses per share of NT$0.11, compared with losses per share of NT$0.52 the previous quarter, company data showed. The result was roughly in line with market estimates of losses per share of NT$0.1.

  However, Powerchip’s top-line and bottom-line results in the first quarter were still lower than the same period last year, with revenue down 5.49 percent and net profit plunging 335 percent due to softening end-market demand and its customers’ continued inventory adjustments, it said.

  Powerchip, which makes DRAM and flash chips, as well as power management and driver ICs, on a contract basis, said the massive earthquake that hit Taiwan’s east coast on April 3 would affect its second-quarter shipments by 5 to 8 percent.

  The quake measured 7.2 on the Richter scale and magnitude 7.4 on the moment magnitude scale.

  The company said the recovery rate of its production lines reached 80 percent within three days of the earthquake and 95 percent within one week.

  It hopes 50 to 60 percent of its quake losses — such as scrapped chips and damaged components — would be covered by insurance, Powerchip said.

  For this quarter, average selling prices of memory products are expected to climb as end-market demand rises and customers face less inventory pressure, while prices of discrete components and power management ICs could remain stable, it said.

  However, prices of CMOS image sensors and small-size display driver ICs, which accounted for about 20 percent of the company's revenue, would face competition from Chinese rivals, making it a key variable affecting the company's profitability, Powerchip said.

  Overall, it is cautiously positive about its revenue performance this quarter and expects gross margin to be flat or higher than last quarter, driven by improving factory utilization for logic chip and memorychip operations, the company said.

  Powerchip said it has raised its capital expenditure this year to NT$32 billion from an earlier budget of NT$24 billion, as it is adjusting its product mix to cope with market changes and customers’ needs as well as respond to inflation-driven equipment cost increases.
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