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GlobalWafers remains conservative about sales outlook this year

Tuesday, August 13, 2019

Silicon wafer company GlobalWafers has turned conservative about its sales outlook this year, citing unfavorable macro factors affecting semiconductor demand.

GlobalWafers chairperson Doris Hsu in June remarked that the company would see its revenues increase only slightly on year in 2019. Hsu had estimated previously "much better" sales results compared to 2018 levels.

At GlobalWafers' recent investors meeting, Hsu noted that some major clients have been cautious about placing orders despite the arrival of the peak season. The silicon wafer manufacturer also disclosed revenues fell 12.6% sequentially to a 17-month low of NT$4.48 billion (US$142.8 million) in July 2019.

Meanwhile, spot prices for silicon wafers have been falling reaching levels 14-28% lower than the LTA (long-term contract agreement) quotes, according to a report by Taiwan's Central News Agency. GlobalWafers, which has the majority of its revenues generated by LTAs, is likely to suffer from a dramatic erosion in profitability next year, the report quoted market watchers as saying.

Fellow silicon wafer company Formosa Sumco Technology (FST) saw its cumulative 2019 revenues through July decline 21.7% from a year earlier to NT$7.27 billion. FST has been affected negatively by a rapid fall in spot market prices.

GlobalWafers reported net profit dropped 8.2% sequentially to NT$3.55 billion in the second quarter of 2019, with EPS reaching NT$8.15. GlobalWafers' net profit for the first half of 2019 amounted to NT$7.41 billion, rising 18% on year, with EPS arriving at NT$17.02.

By: DocMemory
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