Vanguard International Semiconductor Corp (世界先進), a supplier of display driver ICs and power management chips, yesterday said it expects customer demand to recover somewhat in the second half of this year as channel inventory adjustments are likely to end this quarter.

However, consumers would remain cautious about spending on electronics and other nonessential items, Vanguard chairman Fang Leuh (方略) told reporters after the company’s annual general meeting, citing high inflationary pressures around the world and global central banks’ rate-hike cycle.

“We are hoping to see a mild recovery in the second half,” Fang said. “But the strength of the recovery will be affected by greater uncertainties compared with three months ago. The second half will be a better period than the first half.”

At its investors’ conference last month, Vanguard said it was “positive” that a rebound would arrive in the second half after bottoming out this quarter, although the chipmaker also said it was not sure about the scale of the recovery due to low order visibility.

At yesterday’s shareholders’ meeting, Vanguard said that shipments this year would shrink about 21 percent to 2.46 million 8-inch wafers, compared with 3.15 million last year, citing a Gartner Inc forecast that said global semiconductor revenue would fall by an annual rate of 6.5 percent this year to US$562.7 billion.

Demand for chips used in the auto industry, data centers and high-performance computing devices would be stable this year, Vanguard said in its annual report.

In the long run, power management chips would continue to be the growth driver of 8-inch fabs, it said.

Demand for 8-inch wafers is expected to exceed supply in the long term, said Vanguard, which operates four 8-inch fabs in Taiwan and one in Singapore.

Shareholders yesterday approved a cash distribution of NT$4.5 per common share, the same as last year. That represented a payout ratio of 49.61 percent based on earnings per share of NT$9.07 last year.

The cash dividend meant a dividend yield of 4.86 percent, based on the company’s closing stock price of NT$92.5 yesterday.

Vanguard posted record-high net profit of NT$15.28 billion (US$497.5 million) last year, up 27 percent from 2021, as revenue rose 17.62 percent to NT$51.69 billion.

However, amid a downtrend in the semiconductor industry this year, the company’s cumulative revenue in the first five months declined 36.06 percent from a year earlier to NT$14.9 billion, Vanguard said last week.

 

• Link: Taipei Times_Lisa Wang