Daxin Materials, which provides specialty chemicals for semiconductor, display, and key raw materials, has developed chipmaking materials supporting advanced 2nm manufacturing processes and CoWoS packaging, and continues to increase revenue generated from the semiconductor industry, according to the company.
Daxin's materials for 2nm processes are being verified, and the company is optimistic about the verification results. Its CoWoS materials are also undergoing verification, but the lengthy verification process means these products are expected to contribute revenue in 2024.
Daxin, a company under LCD panel maker AU Optronics (AUO), expects sales to grow in the second half of 2024 for display and semiconductor materials. For the semiconductor segment, 10 products are undergoing verification for advanced manufacturing processes, advanced packaging, and mature manufacturing processes, and five to six products will move to volume production in the second half of 2024.
Daxin executive vice president Feng-Yu Chuang pointed out that in the displays sector, average utilization rates reached more than 80% for global high-generation LCD panel production in the second quarter of 2024. However, panel makers started to control their output in July, as brand vendors imposed stricter inventory control in the wake of weak sales in the US, Europe, and China in the first half of 2024.
As customers had already stocked up early during the last quarter, panel makers lowered their utilization rates to around 80% in July, and will keep them at those levels for the entire third quarter. They hope seasonal increases in demand will fuel their sales in the fourth quarter.
Cautiously optimistic about 2024 sales
Daxin is cautiously optimistic about sales for 2024. Daxin expects the first quarter to be the lowest of 2024 for the displays industry, and replacement demand stimulated by major sports events will help improve the company's business in the second half of the year. However, the growth in the second half may be mild compared to the first half, due to the impacts of geopolitical developments and inflation.
For semiconductor materials, their contribution was about 6% of overall company sales in the first quarter, and 7.4% in the second quarter. Daxin expects semiconductor materials' contribution to rise quarterly during the second half of 2024 to reach 10%. Their proportion should increase further in 2025, but the extent will depend on the progress of the new products' verification.
The company has started production in small volumes at its new plant in central Taiwan. Two assembly lines are operational at present, but their sales contribution is limited.
MicroLED is a major focus of product development for the AUO group, with Daxin contributing efforts for materials development. However, the microLED development has been slow and is not expected to contribute to sales in the foreseeable future.
Article translated by Rodney Chan
