Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in power management and display driver chips, yesterday said that its wafer shipment would grow up to 5 percent sequentially this quarter, driven by recovering demand in the communications, industrial and automotive sectors.
Factory utilization is also projected to improve, rising to between 75 and 80 percent — an increase of about 5 percent from the previous quarter, company president John Wei (尉濟時) told an online earnings call.
“As we have about three months of [order] visibility, we have higher on-hand orders for the second quarter compared with the first quarter. The third quarter will also be better than the second,” Wei said. “Given the effect of front-loading demand, we are carefully monitoring if such momentum will carry into the second half.”
Photo: Grace Hung, Taipei Times
Average selling prices this quarter are expected to remain flat or rise by up to 2 percent quarter-on-quarter, following a 5 percent decline last quarter, largely due to price competition, Wei said.
However, the company anticipates that a stronger New Taiwan dollar would weigh on its gross margin by about 3 percent, assuming the currency appreciates 6 percent quarter-on-quarter to NT$30.9 against the US dollar, Vanguard said.
Each 1 percent change in the NT dollar’s value affects gross margin by about 0.5 percent, it said.
As a result, the company expects its gross margin to decline to between 27 and 29 percent this quarter, down from 30.1 percent in the previous quarter.
Vanguard expects a more pronounced rebound in customer demand in its computing segment, particularly for chips used in servers, both with and without artificial intelligence (AI) capabilities, as well as in high-performance computing devices and notebook computers, vice president Claire Chen (陳姿鈞) said.
About two-thirds of the company’s computing revenue last quarter came from power management chips used in AI servers and notebooks, Chen said.
The computing segment accounted for more than 20 percent of total revenue in the same period, she said.
Vanguard also said it would maintain its capital expenditure budget for this year at between NT$60 billion and NT$70 billion (US$1.98 billion to US$2.31 billion), with 90 percent of the funds allocated to its new 12-inch fab in Singapore, chief financial officer Amanda Huang (黃惠蘭) said.
The facility is on track to begin production in 2027.
Vanguard yesterday reported its strongest quarterly performance in nine quarters last quarter, with net profit rising 30.7 percent quarter-on-quarter to NT$2.41 billion, up from NT$1.85 billion in the previous quarter.
On an annual basis, net profit surged 89.8 percent from NT$1.27 billion.
Earnings per share increased to NT$1.30, compared with NT$1.03 in the prior quarter and NT$0.77 a year earlier.
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