Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in producing power management and display driver chips, yesterday withdrew its full-year revenue projection of moderate growth for this year, as escalating US tariff tensions raised uncertainty and concern about a potential economic recession.
The Hsinchu-based chipmaker in February said revenues this year would grow mildly from last year based on improving supply chain inventory levels and market demand. At the time, it also anticipated gradual quarter revenue growth.
However, the US’ sweeping tariff policy has upended the industry’s supply chains and weakened economic prospects for the world economy, it said.
Photo: CNA
“Now with the tariffs in play, all those forecast should be put behind,” Vanguard chairman Fang Leuh (方略) told reporters in Taipei yesterday. “Before the tariff war ends, it will be very difficult to make a forecast about the global economy and the global semiconductor industry. The short-term impact will be negative.”
Despite the new US tariffs, Vanguard International Semiconductor Corp said the direct impact on its operations would be minimal, as only about 1 percent of its total chip production is shipped to the US.
Given the unpredictability of US President Donald Trump’s tariff policies, the company would take a wait-and-see approach, Fang said.
Trump initially paused the implementation of the “reciprocal” tariffs for 90 days before they took effect. However, he later raised tariffs on Chinese imports to 125 percent — and then again to 145 percent — in response to Beijing’s retaliatory measures.
Fang said Vanguard would continue with its expansion in Singapore, including construction of a new 12-inch wafer fabrication plant in collaboration with NXP Semiconductors NV. The new facility is scheduled to begin volume production in 2027.
However, the company has no plans to build a new manufacturing facility in the US, citing its focus on mature process technologies and its relatively smaller scale of operations, Fang added.
Overall, Vanguard could slightly benefit from the tariff war as some Chinese chip designers are seeking non-China chipmakers to supply their customers in the US and Europe, Fang said, adding that the company has already received rushed orders for that purpose.
However, the company would not proactively compete with Chinese chipmakers in China’s cut-throat market, where overcapacity has caused a stiff price war, he added.
Vanguard posted 24 percent annual growth in revenue for the first quarter of this year, amounting to NT$11.95 billion (US$365.39 million) attributable to wafer shipment growth. On a sequential basis, revenue expanded 3 percent.
The company attributed the growth to a pickup in demand for TV and smartphone chips after Beijing launched economic stimulus packages.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
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