GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it would take longer for the company’s new US fabs to break even if it did not secure chip subsidies from the US government as estimated previously.
The company’s remarks came as US President Donald Trump’s call yesterday to scrap the US CHIPS and Science Act, or the US$52 billiion semiconductor subsiday program, stoked concerns about the profitability of its two new advanced fabs in Texas and Missouri.
GlobalWafers said its decision to expand in the US is a commercial one driven primarily by the demands of its US customers. In the unlikely event the CHIPS Act is modified and impacts the company's business, GlobalWafers would reassess future investments, including evaluating US market demand, pricing, and potential tariffs if production were moved outside the US.
Photo: CNA
“There are still lots of uncertainties out there, including tariffs, our product mix in the US and average selling prices,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) told a virtual conference when asked about the timing for the US fabs to break even.
If the US implemented sweeping tariffs as planned, the costs of raw materials would surge, and so would average selling prices, Hsu said.
The company is uncertain whether silicon wafers would be included in the US tariff list, Hsu said.
Additionally, foreign exchange rates and the central bank’s interest rate policy also pose uncertainties to the industry, she said.
“So, for now, what we can say is that I think if there were no CHIPS Act fund, then our payback or breakeven time would take a little bit longer,” she said.
Under the CHIPS Act, GlobalWafers expects to receive the first batch of direct funding of US$406 million sometime this year. The grant represents 10 percent of the planned investments of US$4 billion in the two advanced semiconductor wafer manufacturing facilities.
Along with the tax credit, which is equal to 25 percent of the qualified investment, the total government funding would make up 35 percent of GlobalWafers’ investments in the US, it said.
As no official guidance suggests any changes, GlobalWafers is continuing with its original plan, and remain committed to its expansion strategy, it said.
The company plans to deliver wafers from its new US fab in the first half of this year.
Commenting on Taiwan Semiconductor Manufacturing Co’s (台積電) additional US$100 billion investment in the US, Hsu said that “is good news for us.”
“As a key supplier, I think we definitely have to prepare ourselves to be able to meet customer demand,” she said.
“If we have strong demand in the US and cost-competitive operations in Texas and Missouri, and our US customers are willing to make long-term commitments, we will be very willing to expand further, but that would depend on our business performance,” she said.
GlobalWafers yesterday reported an 89.3 percent slump in net profit for last quarter, which it attributed to sagging demand amid a prolonged inventory correction at customers.
Net profit sank to NT$475 million (US$14.48 million), compared with NT$4.44 billion in the corresponding quarter in 2023. That also represented a sequential decline of 84 percent from NT$2.95 billion.
Last year as a whole, GlobalWafers’ net profit plummeted 50 percent to NT$9.84 billion from NT$19.77 billion in the previous year. Earnings per share dipped to NT$21.06 from NT$45.41.
The company expects a more marked recovery in the second half of this year after hitting bottom in the first quarter, on expectations that silicon wafer consumption would increase due to growing demand for advanced packaging technology and artificial intelligence devices, it said.
“We have witnessed some rush orders and customers are requesting quotations from Globalwafers’ global facilities,” the company said. “We expect our business to grow this year compared with 2024, with an even stronger increase projected for 2026.”
It remains a challenge for the company to maintain gross margins at the same level as last year’s 31.6 percent, due to increased depreciation and uncertainty in electricity costs, the company said.
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