GlobalWafers expects steady quarterly improvement

Taipei, June 18 (CNA) Operations at GlobalWafers Co., the world's third-largest silicon wafer supplier, are expected to continue improving throughout 2024 at a mild pace, according to company chairwoman Doris Hsu (徐秀蘭).

Speaking with reporters on the sidelines of GlobalWafers' annual general meeting held Tuesday, Hsu said the global semiconductor industry will recover slower than previously thought due to fragile demand in the automotive, smartphone and industrial device markets.

Hsu said the level of operations in the first quarter would likely stay low before a limited recovery in the second quarter that continues in the second half of the year.

She said a significant rebound is unlikely until 2025.

In the first quarter, GlobalWafers raked in NT$3.53 billion (US$107 million) in net profit, down 20.5 percent from a quarter earlier, with earnings per share at NT$8.1, down from NT$10.19 seen in the fourth quarter of last year.

On a year-on-year basis, the silicon wafer supplier's net profit fell 29.3 percent with its EPS also down from NT$11.49.

Hsu said global demand for dynamic random access memory (DRAM) chips and NAND Flash, a memory chip used in storage device production, and high-performance computing (HPC) devices remained solid.

However, strong demand for these applications has been offset by weakness in the automotive, smartphone, and industrial device markets as clients adjust their inventories.

As for the compound semiconductor market, Hsu said GlobalWafers' silicon carbide (SiC) wafers sales, which soared 10-fold in 2023, are expected to grow 50 percent in 2024.

Hsu said that the forecast was downgraded from an earlier estimate of a 200-300 percent increase due to weak demand for electric vehicles and increasing production capacity in China, which pushed down product prices.

Earlier Tuesday, GlobalWafers announced its Italy-based subsidiary -- MEMC Electronic Materials S.p.A -- secured a grant of up to 103 million euros (US$110.45 million) from the EU Commission and Italian government to set up a 12-inch silicon wafer plant in Italy -- which is expected to become the most advanced in Europe.

Hsu said GlobalWafers plans to pour 420 million euros into the first phase of the new plant with the subsidy to account for about 25 percent of the initial investment.

She said MEMC will send samples from its new plant to clients for certification in the third quarter of this year before shipments start in 2025. Monthly output is expected to be less than 100,000 units.

She added the presence of the new 12-inch plant in Italy is expected to help GlobalWafers secure a higher market share in the European market than the 30 percent it currently has.

In addition to the new Italian plant, GlobalWafers is investing US$2.2 billion to build a 12-inch silicon wafer facility in the U.S. state of Texas. The company expects to send samples to clients in the fourth quarter of the year, Hsu said.

GlobalWafers has been in talks with the U.S. government regarding accessing a subsidy as part of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, Hsu said, adding she expects to secure a respectable amount through such programs.

Meanwhile, Hsu said the hacker attacks on GlobalWafers' site in the United States on June 12 cost the company 1.5 working days of production.

Hsu said production has been restored completely in key facilities at the U.S. site. Shipments will restart Wednesday.

According to Hsu, the hacker attacks were "phishing," a form of cybercrime involving hackers trying to obtain sensitive information from victims through email with fraudulent links.

Hsu said her company has reported the attacks to the Federal Bureau of Investigation.

Hsu said it remained to be seen how the incident will affect its sales in the second quarter. She explained the company will report some of its deferred sales from June in July.

In a statement released Monday, GlobalWafers said its cybersecurity mechanism was activated when the attacks were detected. The company later enlisted external cybersecurity experts to boost its defenses and restore the targeted information systems.

A thorough investigation confirmed critical information was not accessed, GlobalWafers said in the statement.

GlobalWafers has expanded through mergers and acquisitions in recent years, which has helped its global ranking grow to No. 3.

On its website, GlobalWafers said it runs 18 sites in nine countries -- Taiwan, China, the U.S., Japan, Denmark, Korea, Italy, Malaysia and Singapore.

Hsu said about 80 percent of Globalwafers' growth over the past 20 years has come from mergers and acquisitions, with only 20 percent coming from organic growth.