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5G demand to drive semiconductor revenue in Q3


Thursday, July 30, 2020

Win Semiconductors Corp , the world’s largest pure-play gallium arsenide foundry, yesterday said that its revenue this quarter would increase from the second quarter as 5G demand remains strong, despite the COVID-19 pandemic and the US-China trade dispute.

“Third-quarter revenue is expected to grow by a mid-single-digit percentage quarter-on-quarter and gross margin to be at about the low-40s,” the Linkou District (??), New Taipei City-based company said in a statement after its quarterly earnings call.

“With the worldwide COVID-19 pandemic remaining severe and US-China trade tensions still ongoing, we expect short-term impacts on our business might be inevitable, and the peak and off-seasons will be less obvious and more difficult to predict this year,” the statement said. “However, we will continue to execute our long-term strategy of diversifying customers, expanding production capacity, and maintaining investment in research and development, while preparing for potential risks.”

Win Semiconductors provides foundry services for pure-play gallium arsenide components, such as power amplifier chips and switches used in communications devices.

A company revenue breakdown by applications showed that power amplifier chips for handsets accounted for about 45 to 50 percent of its total sales last quarter, communications infrastructure-related orders accounted for 20 to 25 percent and Wi-Fi components 15 to 20 percent.

Win Semiconductors posted net income of NT$1.65 billion (US$55.9 million) for the second quarter, up 5 percent quarter-on-quarter and 113 percent year-on-year.

Second-quarter earnings per share were NT$3.94, a new high for the period.

That came as the firm’s revenue declined 0.4 percent quarter-on-quarter, but increased 36 percent year-on-year to NT$6.05 billion, roughly in line with its guidance, while gross margin hit a record high of 44.8 percent and operating margin improved to 33.6 percent, driven by a better product mix and an almost 90 percent capacity utilization rate, the company said.

“In the second quarter, cellular power amplifier delivered the highest growth among all product segments. Specifically, the percentage of 5G cellular revenue contribution to total cellular revenue has risen to more than 25 percent,” Win Semiconductors said. “In addition, first-half revenue of gallium nitride on silicon-carbide wafers, which are mainly being utilized for 5G, has been close to last year’s annual revenue. This reconfirms that 5G demand continues to be strong and the trend remains unchanged.”

Revenue for the first six months of the year increased 50 percent year-on-year to NT$12.12 billion and net income surged by 249 percent to NT$3.23 billion, or earnings per share of NT$7.70, also a new high for the period, company data showed.

By: DocMemory
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