Formosa Sumco profit jumps 119% as 300mm wafer lines run at 100%

Formosa Sumco Technology said Nov. 12 its third-quarter net income rose 119% from the previous quarter as artificial intelligence demand pushed its 300mm silicon wafer lines to full capacity.

The company, Taiwan's second-largest silicon wafer supplier, is a joint venture between Formosa Plastics Group and Japan's SUMCO Corporation. It manufactures polished and epitaxial silicon substrates that serve as the base material for leading-edge foundries and memory chipmakers.

Net profit reached NT$153 million ($4.7 million) for the three months ended Sept. 30, up from NT$70 million in the second quarter. The earnings recovery lifted nine-month cumulative net profit to NT$132.56 million, reversing a first-half loss of NT$20.27 million.

Third-quarter revenue climbed 10.36% quarter-on-quarter and 29.0% year-on-year to NT$3.984 billion ($123 million). The expansion in shipments pushed gross margin to 10.21%, a gain of 3.31 percentage points from the prior quarter.

Operating profit margin improved by 3.58 percentage points to 6.22%, reflecting higher fixed-cost absorption across manufacturing lines. The operating turnaround followed four quarters of margin erosion triggered by foundry inventory corrections.

Utilization across the company's existing 12-inch, or 300mm, wafer capacity reached 100% during the quarter. Semiconductor customers completed balance-sheet destocking and shifted to active replenishment to support high-performance computing hardware, the company said in a regulatory filing.

The entire planned capacity of the company's new 300mm fabrication line in Mailiao has already been reserved by contract chipmakers. Production lines at the expansion plant will ramp up in scheduled phases once initial customer qualification runs finish.

Recovery in wafer demand has begun broadening from advanced AI processors into mature nodes. Utilization on 8-inch, or 200mm, wafer lines increased during the third quarter as server manufacturers expanded procurement of power management integrated circuits.

Taiwan Semiconductor Manufacturing Co. and regional specialty foundries have accelerated wafer intake to sustain packaging runs for graphic processors and server clusters. The resulting material pull has tightened spot supplies of high-purity polished substrates.

The shift marks an operational turning point for upstream materials suppliers that endured two years of excess customer inventories. During that downturn, chipmakers deferred contractual wafer intake and negotiated delivery push-outs to protect working capital.

Contract pricing for baseline long-term agreements remained stable during the period, while spot market transaction prices began reflecting higher production overheads. Rising electricity rates and chemical feedstock expenses continue to affect substrate conversion costs across Taiwanese manufacturing parks.

Formosa Sumco's performance aligns with operational improvements reported across the broader wafer manufacturing supply chain. Global peers including Shin-Etsu Chemical and Siltronic have pointed to high-bandwidth memory packaging as the primary driver absorbing premium wafer volumes.

The company's board of directors approved the quarterly financial statements at a meeting convened on Nov. 12, according to filings submitted to the Taiwan Stock Exchange. Diluted earnings per share for the third quarter stood at NT$0.39, bringing cumulative nine-month earnings to NT$0.34 per share.

Nine-month consolidated revenue rose 20.26% year-on-year to NT$10.903 billion ($337 million). Despite the sequential recovery, third-quarter net profit contracted 30.15% compared with the same period last year, when substrate contract prices were anchored to previous cycle highs.

The regulatory filing does not disclose specific wafer shipment volumes by customer, the identity of foundries reserving output at the new plant, or specific price adjustments across substrate diameters. Commercial shipments from the Mailiao expansion plant remain scheduled to commence volume output after customer verification audits conclude.