GaAs foundry Win Semi swings to operating profit in 3Q23

Julian Ho, Taipei; Jessie Shen, DIGITIMES Asia 0


Win Semiconductors, a Taiwanese GaAs foundry, swung to net profits of NT$34 million (US$1.05 million) in the third quarter after three straight quarters of losses.

Win Semi reported revenue of NT$4.165 billion for the third quarter of 2023, up 6% sequentially and 7% on year. This came in slightly over our initial projection, according to company president of corporate administration Steve Chen.

Win Semi's fab utilization rates continue to improve, said Chen. The GaAs foundry utilized 50% of fab capacity in the third quarter, up 10 percentage points on quarter, which boosted its gross margin to 22.1% from 20.1% in the prior quarter. Operating margin turned positive at 1.7%.

In the fourth quarter, Win Semi anticipates a sequential revenue increase in the low teens thanks to improved fabrication utilization, Chen indicated. Gross margin will be in the mid-twenties.

According to Win Semi, when sales fluctuations for each product category were evaluated during the third quarter, the optical segment performed better than the others.

Third quarter traditionally sees high-end smartphone debuts: though Wi-Fi power amplifiers (PA) revenue declined quarter over quarter in the third quarter, as inventory preparation had already peaked in the previous quarter, customer pull-in for cellular PAs has begun as planned. In comparison to the second quarter, the GaAs foundry saw improved momentum from Chinese clients, who have seen their inventories gradually recover to healthy levels and are gearing up for new product releases as smartphone inventory returns to a healthier level. As a result, Win Semi's cellular PA revenue climbed dramatically as compared to the prior quarter.

While there is a gap with its last quarterly revenue record, the GaAs foundry can already see a comeback in customer demand.

Furthermore, Win Semi's optical communication technology has expanded its reach into a broader spectrum of applications through leveraging its cumulative R&D and volume manufacturing capabilities in 3D sensing over the years. Demand from datacenters driven by AI high-speed computing and the automotive LiDAR market, for example, will ensure that Win Semi is well-prepared for long-term growth in the future, according to the GaAs foundry.