Mobile phone PA can’t handle it any longer. We have reduced the capacity utilization rate to 40% and encouraged employees to take vacations!

Affected by the downturn in the global economy, TSMC and Innolux have recently encouraged employees to take vacations. Wenmao recently held a press conference. As the capacity utilization rate dropped to 40%, Wenmao also admitted that "employees are encouraged to take vacations." Wenmao said every day in the third quarter After-tax earnings (EPS) have shrunk significantly, falling to 0.83 yuan. Chen Shunping, general manager of the general management office, believes that revenue will still decline in the fourth quarter and is expected to bottom out in the first quarter of next year.

Wenmao's revenue in the third quarter was 3.909 billion yuan, a quarterly decrease of 26%. The gross profit margin was 16%, a decrease of 14.2 percentage points from the previous quarter. The net profit after tax was 245 million yuan, a quarterly decrease of 55%. Wenmao pointed out that mainly due to Investment losses were recognized in the third quarter, affecting gross profit margin by 5.1%. In addition, capacity utilization dropped to 40%, which was also one of the factors affecting profits in the third quarter.

As the capacity utilization rate has dropped to 40%, many companies have stated that they encourage employees to take vacations. Chen Shunping also admitted that "employees are encouraged to take vacations" and emphasized that "there is no forced vacation." He believes that the current short-term operations are facing headwinds, but there is stability. New customers and new cooperation projects are constantly expanding in all aspects. Therefore, the Luzhu Factory is still under construction. The first main building will be built first. As for the related machinery and equipment, it will depend on the overall economic development in the future.

Chen Shunping, general manager of Wenmao General Management Services Department, said that in the third quarter, consumer application products such as Cellular PA and Wi-Fi PA experienced the largest decline in shipments. In addition to reflecting the market's excessive inventory levels, it also Highlighting end consumers' concerns about the overall economic downturn, Infra, which is relatively an industrial application product, performed less well than the previous quarter, but was less affected by the general environment. In the first three quarters of this year, it has always maintained positive growth compared with last year, while Optical products have shown positive growth due to the The goods are in peak season and slightly better than the previous season.

Looking forward to the fourth quarter, Wenmao predicts that the consolidated revenue in the fourth quarter will decline by a low-teens (11% to 13%) percentage compared with the previous quarter, and the single-quarter gross profit margin is expected to be about a high-teens (16% to 19%) ) to low-twenties (21% to 23%) range level.

Chen Shunping said that in the fourth quarter, except for some smartphone models that sold well and were replenished, overall, all product lines fell by about 10%, and the utilization rate will still be affected. However, as the correction trend slows down, Slowly coming to an end, since the first quarter of next year will still have off-season conditions, it is expected that the first quarter of next year will be the bottom of the correction, and there will be an opportunity to gradually return to the normal demand cycle starting from the second quarter of next year.

With the recent downturn in the industry, legal persons are concerned about whether it will lead to price-cutting competition? Chen Shunping said that we discuss prices with customers over the years. If new technologies are introduced, prices will be adjusted. We have not seen major changes in prices due to new model launches by Cellular customers, nor have we seen any changes due to the decline in capacity utilization. Customer renegotiates price.

Although the short-term global economic cycle is still in a downturn, the gradually declining utilization rate of wafer fab production capacity also provides an excellent opportunity to stabilize customers. Chen Shunping said that we have seen that whether it is microwave communications or optical communications customers are more active In terms of R&D and production activities, in addition to existing customers who have introduced Wenmao's new generation process for certification for products in the next few years, there are also new customers who have chosen Wenmao as a partner in order to enter new markets or new applications in the next few years. New cooperative relationships, the world is gradually entering the post-epidemic era, and we also feel that the closer to the end of the year, the more customers visit and new plans are launched, mainly focusing on the general trends of several terminal markets, in addition to 5G mobile communications In addition to the continued penetration and deployment of 5G infrastructure, the production outsourcing trend of optical communications and optical sensing is also taking shape.

In terms of low-orbit satellites and third-category compound semiconductors, Chen Shunping said that the largest customer of low-orbit satellites is preparing to revamp this year. After the revision is confirmed next year, more satellites will be needed, and he is optimistic about future demand; currently, customers are interested in advanced process technology. For example, the interest and investment in third-category semiconductor materials such as GaN-on-SiC and InP are higher than before. Currently, our products are mainly used in infrastructure construction, with annual growth exceeding double digits, but the proportion of revenue is still single digits. number.

There are many variables in the global economic boom. Not only has Wenmao lowered its capital expenditure this year from 12 billion yuan to 8 billion yuan, Taoyuan's new production capacity of about 2,000 pieces has also been postponed until the end of the year (the total production capacity will reach 43,000 pieces), and Kaohsiung Luzhu's subsequent expansion The pace has also slowed down. Chen Shunping said that the Nanke Kaohsiung Road Bamboo Factory this year is mainly for civil construction. The real production capacity establishment such as: clean room and equipment construction is currently slowing down. We will observe the terminal after the first main building is completed. The situation will be evaluated, but in the long run, since about 2,000 to 3,000 pieces of the last floor of the clean room in the Taoyuan plant will be in place by the end of this year, the future expansion space will be less than 5,000 pieces (less than 10% of the total production capacity), and the dust-free It takes 2 years to move in the rooms and equipment. If the factory is not prepared in advance, good growth opportunities will be lost when the economy recovers. Therefore, the construction of the Luzhu Factory is necessary.