Reports: Taiwan’s Vanguard pushes capacity limits, preps 200mm addition

August 1, 2007 – Vanguard International Semiconductor Corp. has crossed the 100% capacity utilization mark thanks mainly to trailing-edge (0.18-micron) business from TSMC and a flurry of foundry orders for LCD driver ICs to replenish LCD makers’ inventories, according to the Taiwan Economic News.

Capacity approached 106% in 2Q, according to the company, which also reported roughly $115M in sales (a 29% increase vs. 1Q07), gross margins of nearly 41% (vs. 36%), after-tax income of $58 million (+14%), and 207k 200mm-equivalent wafer shipments (+9%). Vanguard chairman Chuan Lin expects utilization will likely stay at current levels through 3Q even as the company increases shipments by 10% and expands capacity, with a book-to-bill approaching 1.3, the report noted.

Vanguard also is not ruling out the possibility of borrowing more 200mm capacity, even as it prepares to ramp a newly-purchased 200mm fab from Winbond to 20-25k WPM by the start of 2008, which would represent roughly 20% of the firm’s total capacity, notes DigiTimes. The company says the addition of Winbond’s former Fab 2 won’t hurt gross margins — in fact they’ll go up to about 40%-42%, the report notes, citing VP/spokesperson Robert Hsieh. With current capacity not keeping up with demand, the former Winbond fab “will be given top priority for processing excessive orders” in 3Q, Digitimes reports.


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