Foundry Vanguard Corporation (Vanguard) held a press conference on April 21, 2012 to announce its fourth quarter 2022 operating results. For the fourth quarter of 2022, Vanguard reported consolidated revenue of approximately NT$9.573 billion, net income of approximately NT$2.479 billion, and EPS of approximately NT$1.47 per share. (5347) Chairman Fang Liao warned in a press conference yesterday (21) that the current quarter will be the coldest quarter with an "instant bottom" and that single-quarter revenue is expected to fall to a three-year low.

Fourth Quarter Revenue Results

VIS pointed out that compared to last quarter's revenue of NT$13.328 billion, VIS' Q4 revenue decreased by approximately 28.2 %, and compared to the same period in 2021 when revenue was NT$12.738 billion, Q4 revenue decreased by approximately 24.8 %. 2022 Q4 gross profit margin was approximately 39.2 %, and operating profit margin was approximately Gross profit margin was approximately 39.2 1 TP3T and operating profit margin was approximately 25.71 TP3T.

2023 Operational Outlook for the First Quarter of 2012

VIS Vice President and CFO and Spokesperson Huang Huilan said that the company's overall capacity utilization rate continues to decline due to continued weak demand in the consumer electronics end market, and demand for industrial semiconductors is also in inventory adjustment. As a result, VIS's operating outlook for the first quarter of 2023 is for consolidated revenue to be in the range of NT$7.9 billion to NT$8.3 billion, gross margin to be in the range of 29 % to 31 %, and operating profit margin to be in the range of 14.5 % to 16.5 %. According to Mr. Fang, Chairman of Vanguard, the first quarter of 2023 should be the bottom of the operation, and it is expected to recover quarter by quarter thereafter. However, the speed and magnitude of the recovery remains to be seen, and there are no cases of long-term customers canceling or postponing orders at this stage. As for the 12-inch fab investment plan, the company is still evaluating the plan and does not have a specific plan or timeline.

Future Capital Expenditure Adjustments and Locations

Although the decline in capacity utilization was not discussed at the beginning of the long term contract discussion, we still actively negotiated with customers to ensure that we assisted them to prepare for the production in advance to avoid capacity depletion. In addition, in response to the correction in the semiconductor industry, capital expenditures are expected to be reduced to approximately NT$10 billion in 2023, a substantial decrease of 48.45% from the NT$19.4 billion in 2022, and the adjustments to capital expenditures include the deferral of some equipment move-ins and continued cost control. As for the capital expenditure, 55% will be used for fab 5 facilities and capacity building, 30% for other fab equipment optimization, and the remaining 15% for annual routine maintenance in each fab.

Ji-Pu Viewpoint:

In terms of foundries, they will continue to hit the bottom of the market correction in Q1 of this year, and it is expected that their end products will recover by the end of 2023. As an excellent 8-inch model in the market, according to Chairman Fang Liao, most of the customers have not canceled or postponed their previous contracts, and it is expected that the next revenue will be a sugarcane rush. The global demand for 8-inch production capacity is also facing a correction, however, Vanguard has a good product portfolio and customer relationship, so the impact is expected to be relatively small.