Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>1Q25 Shipment estimates are up 8-10%. The ASP is expected to decrease by 4-6% QoQ and the gross margin. GM is projected to be 29-31%, showing a 1.3% increase QoQ. </li>
<li>The worldwide inventory level is currently healthy. Automotive inventory levels are improving, and Vanguard anticipates moderate growth in the semiconductor industry for 2025.</li>
<li>VSMC's construction will proceed according to the current plan. The project is currently slightly ahead of schedule. Sampling is planned for 2026, with mass production expected to begin in 2027.</li>
</ul>


1Q25 Shipment estimates are up 8-10%. The ASP is expected to decrease by 4-6% QoQ and the gross margin. GM is projected to be 29-31%, showing a 1.3% increase QoQ. 
The worldwide inventory level is currently healthy. Automotive inventory levels are improving, and Vanguard anticipates moderate growth in the semiconductor industry for 2025.
VSMC's construction will proceed according to the current plan. The project is currently slightly ahead of schedule. Sampling is planned for 2026, with mass production expected to begin in 2027.


Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

<ul>
<li>Usually, the 1st quarter of each year should show a decline for foundry companies, but <a href="https://www.smartkarma.com/entities/vanguard-international-semi" target="_blank" data-smartkarma-citation="entities:16011:1" rel="noopener">Vanguard Intl Semiconductor (5347 TT)</a>'s 1Q25 results could be relatively flat quarter-over-quarter.  </li>
<li>
<a href="https://www.smartkarma.com/entities/vanguard-international-semi" target="_blank" data-smartkarma-citation="entities:16011:1" rel="noopener">Vanguard Intl Semiconductor (5347 TT)</a>'s demand for Display Driver IC (DDIC) is on the rise, surpassing the growth seen in Power Management IC (PMIC).</li>
<li>Despite the potential increase in shipments in 1Q25, the rise in lower-margin products, such as 8" DDICs for large panels, is notable.</li>
</ul>


Usually, the 1st quarter of each year should show a decline for foundry companies, but Vanguard Intl Semiconductor (5347 TT)'s 1Q25 results could be relatively flat quarter-over-quarter.  

Vanguard Intl Semiconductor (5347 TT)'s demand for Display Driver IC (DDIC) is on the rise, surpassing the growth seen in Power Management IC (PMIC).
Despite the potential increase in shipments in 1Q25, the rise in lower-margin products, such as 8" DDICs for large panels, is notable.


Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

<ul>
<li>We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> and <a href="https://www.smartkarma.com/entities/monolithic-power-systems-inc" target="_blank" data-smartkarma-citation="entities:2088:1" rel="noopener">Monolithic Power Systems, Inc (MPWR US)</a> are gradually increasing demand volume in 2Q24 and 3Q24.  </li>
<li>Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  </li>
</ul>


We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  

Qualcomm Inc (QCOM US) and Monolithic Power Systems, Inc (MPWR US) are gradually increasing demand volume in 2Q24 and 3Q24.  
Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  


Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

<ul>
<li>Due to reduced seasonal demand, 4Q24 shipments will decrease by 10% to 12% (QoQ, while the average selling price (ASP) will increase by 3% to 5% QoQ.</li>
<li>Vanguard's investment in <a href="https://www.smartkarma.com/entities/episil-holdings-inc" target="_blank" data-smartkarma-citation="entities:7688:1" rel="noopener">Episil Holdings (3707 TT)</a> is focused on the 8" SiC process, indicating Vanguard's ventures into the 8" SiC foundry sector in the near future.</li>
<li>Vanguard is confident in maintaining a minimum DPS policy of NT$4.5</li>
</ul>


Due to reduced seasonal demand, 4Q24 shipments will decrease by 10% to 12% (QoQ, while the average selling price (ASP) will increase by 3% to 5% QoQ.
Vanguard's investment in Episil Holdings (3707 TT) is focused on the 8" SiC process, indicating Vanguard's ventures into the 8" SiC foundry sector in the near future.
Vanguard is confident in maintaining a minimum DPS policy of NT$4.5


Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

<ul>
<li>Vanguard’s 4Q24 revenue is expected to drop by mid-to-high single digits, with GM at about 27-28%.</li>
<li>For the products segment wise, the PMIC (power management IC) remains stable, while the Display Driver IC may decline by mid-teens QoQ.  </li>
<li>The Chinese government seems to be subsidizing local fabless orders, raising concerns about the sustainability of the current prosperity and the possibility of excess inventory in the near future.</li>
</ul>


Vanguard’s 4Q24 revenue is expected to drop by mid-to-high single digits, with GM at about 27-28%.
For the products segment wise, the PMIC (power management IC) remains stable, while the Display Driver IC may decline by mid-teens QoQ.  
The Chinese government seems to be subsidizing local fabless orders, raising concerns about the sustainability of the current prosperity and the possibility of excess inventory in the near future.


Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

Taiwan

Vanguard International Semiconductor Corporation offers integrated circuit foundry services.  The Company manufactures 0.18um logic, mixed-signal, analog, high voltage, low power, CMOS RF, flash, embedded memory, and bipolar CMOS DMOS semiconductors.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Vanguard Intl Semiconductor (5347 TT)

Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

In 1Q25, Both Sales and GM Will Increase. GM projected to increase 1.3% QoQ. Worldwide inventory healthy. VSMC construction on track, sampling in...

Patrick Liao

Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

In 1Q25, Both Sales and GM Will Increase. GM projected to increase 1.3% QoQ. Worldwide inventory healthy. VSMC construction on track, sampling in...

Patrick Liao

Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

​Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

​Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

​4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

​Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.

Patrick Liao

Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.