World Advanced: Semiconductor situation is unlikely to improve in the second half of the year

Source: Content compiled from the Commercial Times, etc.

World Advanced held a shareholders meeting on the 14th. Chairman Fang Lue believed that the trade war and the Huawei incident have impacted the confidence of the terminal consumer market. Even if it can be resolved in the short term, it will have an impact on the technology industry. It is expected that it will be quite difficult for the overall environment to improve in the second half of the year.

For World Advanced, Fanglue pointed out that the company's current visibility is about two months. It now looks like customers in the third and fourth quarters are cautious and conservative, and are committed to controlling inventory. Currently, short orders and urgent orders are the main ones, and customers are still waiting to see changes in the US-China negotiations to decide whether there is a need to stock up.

On the 14th, the shareholders of World Advanced passed a cash dividend of NT$3.2. Regarding the industry outlook, Fanglue said that the global GDP and semiconductor industry growth rate may face downward revision pressure. Even if the United States and China can negotiate and resolve the problems between the two sides in the short term, they have already impacted the technology industry, and it may be difficult for the overall environment to improve in the second half of the year.

Based on observations from the world's advanced operations, Fanglue pointed out that currently most orders are short-term and urgent, and customers are cautious and conservative. If there are signs of improvement in the US-China trade war, customers will have the opportunity to start stocking up immediately. If there is no improvement, market demand may begin to cool, and the demand outlook may be adjusted again.

Fanglue said that in terms of the supply chain, the impact on direct customers is relatively low, but from the perspective of the entire supply chain, some indirect customers sell to mainland China, so it will still have some impact on the world's advanced technology. However, he believes that although the US-China trade war is a crisis, it is also an opportunity, and some new customers have already been attracted.

For 2019, World Advanced originally planned to spend 3.95 billion yuan on capital expenditures, but since it had already bought Globalfoundries' eight-inch fab in Singapore, World Advanced announced at its shareholders meeting on the 14th that it would increase its 2019 capital expenditures to 11.7 billion yuan.

In terms of automotive electronics product layout, Fanglue pointed out that product lines such as power management, panel driver, fingerprint recognition and sensors have now entered automotive electronics, and the cumulative revenue share has approached double-digit levels, and there is an opportunity to grow year by year in the future.