VIS July Revenue Hits NT$3.557B, Down 13.38% MoM

Vanguard International Semiconductor Corporation (VIS) has announced its consolidated revenue for July 2024, totaling NT$3.557 billion, reflecting a 13.38% decrease from June's NT$4.106 billion and a 1.11% drop from NT$3.596 billion in July 2023. Despite this decline, VIS's cumulative revenue for the first seven months of 2024 reached NT$24.255 billion, marking a 12.09% year-over-year increase and the second-highest revenue on record for this period.

VIS's Vice President and CFO, Amanda Huang, explained that the reduction in July revenue was primarily due to lower wafer shipments. However, the company remains confident about its third-quarter outlook, expecting stronger performance compared to the previous quarter.

During a recent earnings call, VIS projected a 9% to 11% increase in wafer shipments for Q3 2024, driven by rising customer demand. Although the average selling price (ASP) might decrease by 0% to 2% due to product mix adjustments, the utilization rate is anticipated to rise by 7 to 9 percentage points, reaching approximately 70%, which is expected to enhance the gross margin to between 28% and 30%.

VIS General Manager, John Wei, noted that while customer demand is growing steadily, the company remains cautious about end-market demand, particularly in the automotive sector, where inventory adjustments are ongoing. VIS currently has a 2 to 3-month visibility for its orders and plans to increase the monthly production capacity of its Fab 5 by 2% in Q3, reaching approximately 286,000 wafers. The company expects its full-year capacity to grow by 1%, totaling around 3.387 million wafers.

In terms of manufacturing processes, VIS anticipates continued revenue growth for its 0.18μm and 0.25μm nodes, largely driven by the strong demand for power management ICs (PMICs). The company also expects an increased contribution from PMICs to its overall revenue. Depreciation expenses for Q3 are forecasted to rise slightly to NT$2.17 billion, with full-year depreciation expected to increase by 10% to approximately NT$8.67 billion.

To support its growth strategy, VIS’s board has approved a capital budget of NT$6.353 billion for machinery and related facility equipment. Additionally, VIS plans to issue up to 200,000 new shares, with 20,000 shares available for public offering, to fund the construction of a 12-inch wafer fab at its overseas subsidiary, VSMC Singapore.