GlobalWafers (6488) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached NT$15.3 billion, up 1.6% sequentially but down 14.4% year-over-year, with net profit at NT$2.88 billion and EPS at NT$6.02; H1 2024 revenue was NT$30.4 billion, down 16.7% YoY, and EPS was NT$14.04.

• Major disruptions in Q2 included a magnitude 7.2 earthquake in Taiwan and a cyberattack, both managed with minimal long-term impact due to strong risk management.

• Global expansion continues with significant government subsidies for projects in the US ($400 million) and Italy (€103 million), supporting advanced wafer production and supply chain resilience.

• ESG initiatives remain a priority, with top 5% corporate governance ranking in Taiwan for six years, ongoing environmental achievements, and board composition improvements.

Financial highlights

• Q2 2024 revenue: NT$15.3 billion (+1.6% QoQ, -14.4% YoY); H1 2024 revenue: NT$30.4 billion (-16.7% YoY).

• Q2 gross margin: 32.3%; H1 gross margin: 33.3%.

• Q2 net profit margin: 18.8%; H1 net profit margin: 21.1%.

• Q2 EPS: NT$6.02; H1 EPS: NT$14.04.

• Q2 2024 EBITDA was NT$4.6 billion (30.0% margin), down 21.8% sequentially and 40.2% YoY.

Outlook and guidance

• Semiconductor industry expected to recover in H2 2024, with positive momentum and inventory normalization into 2025.

• 2024 revenue projected to be lower than 2023, with a high single-digit decrease YoY.

• Gross margin expected to gradually improve from 2025 as government subsidies reduce depreciation.

• Market share in advanced logic expected to improve by end of 2025 as new capacity comes online.

• WSTS forecasts global semiconductor sales to grow 16% in 2024 and 12.5% in 2025, led by Memory and Logic.