Vanguard International Semiconductor reported a 20% year-over-year decline in third-quarter net income to NT$1.70 billion ($53 million), weighed down by escalating manufacturing costs that compressed margins at the Taiwan-based chipmaker.
The company’s gross margin fell to 26.8% in the three months through September, down 1.2 percentage points from the prior quarter. Earnings per share came in at NT$0.91 ($0.03), missing expectations as rising expenses offset revenue gains.
Chairman Fang Lue said the foundry expects global GDP growth of 3.1% next year, which should support semiconductor demand. However, he cautioned that seasonal weakness will persist through the current quarter and into early 2025, tempering near-term revenue expectations.
Vanguard projects average selling prices will climb 4% to 6% in the fourth quarter, citing an easing of the aggressive price competition that has plagued the foundry sector for the past two years. The company believes improved product mix and favorable currency movements will help stabilize profitability despite ongoing cost pressures.
The results underscore challenges facing specialty foundries as they navigate a recovery marked by uneven demand and margin pressure. While pricing appears to be stabilizing after a prolonged downturn, Vanguard’s outlook suggests the industry faces a measured rebound rather than a sharp turnaround.
