Yamato said that due to continuous inventory adjustment, the world's advanced (5347) production capacity may continue to decline, and the weakness is expected to continue into Q1 next year.

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[Financial Channel/Comprehensive Report] Daiwa Capital (Daiwa) reported that due to continuous inventory adjustments, the capacity utilization rate of the wafer foundry World Advanced (5347) may decline continuously. Industrial and automotive products have performed well so far. But there is still a risk of a correction, with weakness likely to continue into Q1 next year.

World Advanced's revenue so far this quarter is 9.6 billion yuan, an annual increase of 25%, reaching 74% of the midpoint of the Q3 financial forecast of 12.9-13.3 billion yuan, but in view of the decline in capacity utilization, the world maintains the original financial forecast.

So far, the world has maintained a stable pricing policy, and gross margins are expected to remain healthy, still likely to achieve 40% of the long-term target with healthy capacity utilization.

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The world is seeing a continuous adjustment in consumer electronics inventories, which is expected to take 2-3 quarters to complete.

Industrial and automotive demand remains healthy, but the world is also noticing signs of an industrial slowdown in Q4 this year, as well as the risk of auto inventory corrections.

Because the foundry is redistributing the production capacity of automotive products in the second half of the year, it may lead to oversupply.

Therefore, the world believes that capacity utilization may show consecutive declines in Q4 and Q1 next year.

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