Foundry service provider Vanguard International Semiconductor Corp (世界先進) yesterday reported its profit for last quarter — the weakest in six quarters — saying that it expected moderate seasonal corrections in the following two quarters thanks to growing demand for power management chips used in artificial intelligence (AI)-related applications such as servers.
Net profit contracted 20 percent annually to NT$1.69 billion (US$54.7 million) from NT$2.13 billion, also down 16.6 percent from NT$2.04 billion in the second quarter, the company said.
Earnings per share dipped to NT$0.91 from NT$1.29 last year and NT$1.1 the prior quarter, it said.
Photo: Grace Hung, Taipei Times
Vanguard chairman Fang Leuh (方略) said in an earnings conference that as most customers are expected to finalize inventory corrections soon — earlier than forecast — the company expects seasonal corrections to be moderate in this quarter and the next one.
“No significant downside movement is expected,” Fang said.
The revenue momentum would be buoyed by persistent AI infrastructure deployment worldwide, Fang said.
AI-related chip revenue contribution rose to a high-single-digit percentage this year, from a low-single-digit percentage last year, he said.
“Semiconductors play a vital role in global AI hardware investment in the long term, and the company holds an advantageous position in supplying power management chips used in data centers, AI servers and applications,” Fang said.
Vanguard expects revenue growth next year to be buoyed by a 3.1 percent expansion in the global economy and high-teens percentage growth in the global semiconductor industry, he said.
This quarter, wafer shipments are expected to decrease by 6 to 8 percent from last quarter, mostly because of seasonal weakness and year-end inventory adjustments, Vanguard president John Wei (尉濟時) said.
“We have three-month order visibility. The company benefits from stable demand for power management chips for the auto, industrial and server segments, although demand for display driver chips is also expected to be weak,” Wei said.
Average prices for the company’s products are to rise 4 percent to 6 percent sequentially, thanks to a better product portfolio, he said.
Gross margin is expected to improve to about 27.5 percent this quarter, from 26.8 percent last quarter, thanks to a weakening New Taiwan dollar versus the US dollar and a better product portfolio, the company said.
Vanguard retained this year’s capital expenditure at NT$65 billion to NT$70 billion, and would earmark 90 percent of it for its first 12-inch wafer fab in Singapore, which is on track to enter volume production in 2027.
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