Vanguard International Semiconductor Corp (世界先進), which makes power management chips and display driver chips, expects moderate sales growth this year, aided by healthy supply chain inventory and rising demand from China due to its economic stimulus measures.
“This year would be better than last year. On a sequential basis, we expect a gradual recovery each quarter following a similar pattern to last year,” Vanguard vice president Claire Chen (陳姿鈞) told a virtual investors’ conference yesterday.
Factory utilization would improve to between 70 and 80 percent this year, from 65 percent in the final quarter of last year, Vanguard said, without factoring in potential impact from the macro environment.
Photo: Grace Hung, Taipei Times
Vanguard expects direct impact from the US’ tariff policy would be “trivial” as only a tiny portion of its chips are shipped directly to the US, company chairman Fang Leuh (方略) said, adding that the company is not considering building a factory in the US.
However, its indirect impact on the entire semiconductor industry could be enormous, as potential US tariff hikes on electronics, high-tech products and vehicles would lead to a jump in inflation and electronics prices, he said.
That could weaken consumer spending and ultimately diminish US economic growth and semiconductor demand, he added.
Even so, Vanguard’s plan to build a 12-inch wafer fab in Singapore with NXP Semiconductor NV would proceed as scheduled, it said, adding that it would ramp up production in 2027.
To fund the fab’s construction, Vanguard plans to expand its capital expenditure this year to between NT$60 billion and NT$70 billion (US$1.83 billion to US$2.13 billion) compared with NT$15.94 billion last year.
This quarter, wafer shipments are forecast to expand between 8 and 10 percent sequentially, Vanguard president John Wei (尉濟時) said, attributing the growth to rising demand from China and customers’ requests to ship products ahead of schedule amid concern over US tariff hikes.
Vanguard would also recognize income from its long-term supply agreements, accounting for about 2 percent of its total revenue, Wei said.
Average selling prices are forecast to dip about 4 to 6 percent sequentially this quarter, he said.
Gross margin would improve to between 29 percent and 31 percent compared with 28.7 percent last quarter, while factory utilization rate would climb to between 70 and 75 percent from 65 percent a quarter earlier, he said.
Vanguard’s net income fell 4.4 percent to NT$7.05 billion last year, the weakest ever. Earnings per share dropped to NT$4.16 from NT$4.43.
The company’s board of directors approved a proposal to distribute cash dividends of NT$4.5 per common share, the same as last year, with the money coming from its reserve income.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
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