- Revenue (Q2 2024): $1,901 million, up 8.6% sequentially.
- Gross Margin (Q2 2024): 13.9%, up 0.2 percentage points sequentially.
- Profit from Operations (Q2 2024): $87 million.
- EBITDA (Q2 2024): $1,056 million.
- EBITDA Margin (Q2 2024): 55.5%.
- Profit Attributable to the Company (Q2 2024): $165 million.
- Total Assets (End of Q2 2024): $47.4 billion.
- Total Cash on Hand (End of Q2 2024): $13 billion.
- Total Liabilities (End of Q2 2024): $16.4 billion.
- Total Debt (End of Q2 2024): $10.4 billion.
- Total Equity (End of Q2 2024): $31 billion.
- Debt to Equity Ratio (End of Q2 2024): 33.7%.
- Net Debt to Equity Ratio (End of Q2 2024): Negative 8.2%.
- Cash from Operating Activities (Q2 2024): $19 million.
- Net Cash Used in Investing Activities (Q2 2024): $1,638 million.
- Net Cash from Financing Activities (Q2 2024): $46 million.
- Revenue (H1 2024): $3,651 million, up 20.8% year-over-year.
- Gross Margin (H1 2024): 13.8%, down 6.8 percentage points year-over-year.
- Profit from Operations (H1 2024): $90 million.
- EBITDA (H1 2024): $1,943 million.
- EBITDA Margin (H1 2024): 53.2%.
- Profit Attributable to the Company (H1 2024): $236 million.
- Revenue Guidance (Q3 2024): Expected to grow 13% to 15% sequentially.
- Gross Margin Guidance (Q3 2024): Expected to be in the range of 18% to 20%.
- 8-inch Equivalent Wafer Shipments (Q2 2024): Increased by 18% sequentially to more than 2.11 million.
- Blended ASP (Q2 2024): Declined by 8% sequentially.
- Revenue by Region (Q2 2024): China 80%, America 16%, Eurasia 4%.
- Wafer Revenue by Application (Q2 2024): Smartphone 32%, Computer and Tablets 13%, Consumer Electronics 36%, Connectivity and IoT 11%, Industrial and Automotive 8%.
- Wafer Revenue by Size (Q2 2024): 8-inch 26%, 12-inch 74%.
- BCD Platform Revenue (Q2 2024): Increased more than 20% sequentially.
- RF CMOS Platform Revenue (Q2 2024): Increased nearly 30% sequentially.
- Monthly Capacity (End of Q2 2024): 837,000 8-inch equivalent wafers.
- Capital Expenditure (H1 2024): Nearly $4.5 billion.
Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the second quarter was $1,901 million, up 8.6% sequentially.
- Gross margin increased by 0.2 percentage points sequentially to 13.9%.
- Profit attributable to the company was $165 million for the second quarter.
- The company's overall utilization rate increased by 4 percentage points to 85%.
- Revenue for the first half of 2024 increased by 21% year-over-year to $3.65 billion.
Negative Points
- Gross margin for the first half of 2024 was down 6.8 percentage points year-over-year to 13.8%.
- Net cash used in investing activities was $1,638 million in the second quarter.
- Blended ASP declined by 8% sequentially due to changes in product mix.
- Total liabilities were $16.4 billion, with total debt at $10.4 billion.
- There is uncertainty regarding the fourth quarter due to potential changes in the external environment.
Q & A Highlights
Q: Can you provide more details on the factors driving the sequential increase in gross margin for the third quarter?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The increase in gross margin is primarily driven by two factors. Firstly, the geopolitical impact has accelerated demand for localization, leading to a tight supply in certain 12-inch nodes and upward price trends. Secondly, the newly expanded 12-inch capacity, which is relatively high value-added, is fully utilized, generating revenue and optimizing the product mix. These factors are expected to increase the blended ASP sequentially, driving the gross margin up.
Q: What is the company's outlook for the fourth quarter and the overall landscape for the year?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The fourth quarter is expected to follow a traditional seasonal pattern, but we are cautiously optimistic due to some uncertainties. Based on the unaudited results for the first half and the guidance for the third quarter, we expect the annual revenue growth to exceed the industry average. The revenue in the second half of the year is expected to surpass that of the first half.
Q: How has the geopolitical situation affected the company's operations and market demand?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The geopolitical situation has led to disruptions and changes in the supply chain, creating opportunities for some customers to penetrate the industrial chain and bring incremental demand to the company. This has resulted in increased willingness among companies to restock and build up inventory, particularly in the mid- and low-end consumer electronics sectors.
Q: Can you elaborate on the company's capacity expansion plans for this year?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: By the end of this year, we expect the overall capacity to increase by around 60,000 12-inch wafers per month compared to last year. This expansion is aimed at meeting the growing demand and optimizing our product mix to enhance revenue generation.
Q: What are the main growth drivers for the company's revenue in the second quarter?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The primary growth drivers in the second quarter were platforms widely used in consumer electronics and smartphones. For example, the BCD platform, including PMIC, switch regulators, and LED drivers, saw a revenue increase of more than 20% sequentially. The RF CMOS platform, including Bluetooth, WiFi, and receiver transceivers, experienced nearly a 30% sequential revenue increase.
Q: How has the company's utilization rate changed, and what factors contributed to this change?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The company's overall utilization rate increased by 4 percentage points to 85% in the second quarter. This improvement was due to the recovery in the 8-inch utilization rate and the nearly fully loaded 12-inch capacity. Additionally, new effective capacity was released and quickly put into production in the first half of the year.
Q: What is the company's strategy to navigate the complex external environment and market changes?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The company will continue to focus on wafer manufacturing, meeting customer needs, and balancing short-term operating objectives with long-term development goals. We aim to create vision-based strategic plans to lead in local technology capabilities and embrace both headwinds and opportunities.
Q: What is the expected impact of the newly expanded 12-inch capacity on the company's financial performance?
A: Dr. Haijun Zhao, Co-Chief Executive Officer: The newly expanded 12-inch capacity, being high value-added, is expected to be fully utilized, generating significant revenue and optimizing the product mix. This will contribute to an increase in the blended ASP and drive the sequential increase in gross margin.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
