Key facts
- Hua Hong reported third-quarter revenue of $987 million, up 19.9% from a year earlier and 9.9% from the prior quarter.
- Gross margin was 24.6%, up 7.6 percentage points year-on-year and 4.7 points quarter-on-quarter.
- Bai attributed results to high wafer plant utilisation, with shipment volumes and average selling prices both rising.
- Hua Hong forecast fourth-quarter revenue of $1.08 billion to $1.09 billion and gross margin of 25% to 26%.
- Bai said supply in certain niche segments was tightening and predicted rising volumes and prices would continue for some time.
Hua Hong Grace Semiconductor, China's second-largest contract chipmaker, plans to expand its silicon photonics capacity, chairman and president Bai Xian said on an earnings call with analysts on November 5. Silicon photonics uses light rather than electrical signals to move data between chips, a function used in optical modules for AI data centers.
Bai said the expansion would come during the company's next major capacity build. He attributed third-quarter results to high utilisation rates at Hua Hong's wafer plants, with shipment volumes and average selling prices both rising, and said expansion projects were progressing as planned.
The company reported third-quarter net profit of $123 million, up 147% from a year earlier and 77.7% from the prior quarter, according to CLB.org.hk. Revenue reached a record $987 million, up 19.9% year-on-year and 9.9% quarter-on-quarter. Gross margin was 24.6%, up 7.6 percentage points from a year earlier and 4.7 points from the prior quarter.
Bai said demand for AI-related products continued to drive the global semiconductor market, while the industrial and automotive sectors were showing gradual improvement. He said supply in certain niche segments was tightening and predicted the trend of rising volumes and prices would continue for some time.
Hua Hong forecast fourth-quarter revenue of between $1.08 billion and $1.09 billion, with gross margin of 25% to 26%.