UMS Holdings

[l0nEr]

cool. you are awake so early...

Looking good for UMS...
From Applied Materials: Silicon Systems Group (SSG) orders were $1.36 billion, up 84 percent primarily due to increased demand in foundry and memory, partially offset by lower orders in logic. Net sales were $969 million, up 11 percent. Non-GAAP operating income increased to $180 million or 18.6 percent of net sales. GAAP operating income increased to $134 million or 13.8 percent of net sales. New order composition was: foundry 73 percent, logic and other 12 percent, flash 8 percent, and DRAM 7 percent.

Saw from seekingalpha that the EPS non-GAAP estimate was 3 cents, so its a massive beat by 3cents. Revenue of USD1.57bn beats by USD0.03bn (not sure about the accuracy)
Just wondering what the outlook in the conference be like.
Seems like UMS isnt following the rally in Applied Materials.

[Nick]

Football ! Let's see how the Market takes the news though I suspect it may have already been priced in.

[l0nEr]

me too! draw between Man Utd and Real Madrid though... nice header from Ronaldo.

I double checked, Applied Materials Q4 earnings of 6cents beat consensus EPS of 3cents, stock up about 3% after market close. Not sure if the positive sentiments will filter to UMS though.

[Boon]

Applied Materials 1Q2013 result had exceeded market expectation. In a space of a quarter, the Management’s outlook on semiconductor equipment market has swung from being pessimistic (at the end of 4Q2012) to the current state of optimism - what a quick turn-around of sentiment – boosted especially by strong rebound in orders – up 84% QoQ.

SSG : Revenue (USD million):
1Q2012 = 1,344
2Q2012 = 1,777
3Q2012 = 1,545
4Q2012 = 870
1Q2013 = 969 (This is 11.4% higher than 4Q2012）

SSG : New Orders (USD million
1Q2012 = 1,418
2Q2012 = 1,969
3Q2012 = 1,166
4Q2012 = 741
1Q2013 = 1,363 (This is 83.9 % higher than 4Q2012)

SSG : Backlog (USD million)
1Q2012 = 1,056
2Q2012 = 1,208
3Q2012 = 855
4Q2012 = 704
1Q2013 = 1,071 (This is 52.1 % higher than 4Q2012)

The rebound in confidence had been echoed with the repeated use of some of the following positive key words/phrases by the Management in the result briefing:
- Optimistic
- Confidence
- Inflections (in technology)
- Opportunities
- Momentum
- Growth in wafer fab equipment shares..

Key points gleaned from results briefing:

1) Global demand for mobile products remain strong - driven by Mobility
2) Mobile devices are also driving demand for NAND flash memory. Overall, NAND is growing. With its leadership in 3D NAND technology, Applied is confidence of gaining market share in this area which is moving away from lithography technology.
3) DRAM prices are starting to rise, however, DRAM investment remaining at low levels.
4) Quote : “We believe that we can now grow wafer fab equipment in 2013 with share gains driven by strong demand for our transistor products, combined with application wins and inspection and a customer spending mix that’s favorable to Applied Materials.”
5) Inspection represents an attractive growth driver for Applied
6) Quote: “Demand for better mobile products is driving innovation and we are seeing major inflections in device technology and the introductions of many new materials as customers strive to differentiate themselves with extended battery life, low power, and higher performance products. These inflections are enabled by precision, materials engineering applications, including precision films, material removal, material modification and interface engineering. This is where Applied has clear technology and market leadership, and will be a major factor in driving our growth in wafer fab equipment shares”
7) Quote: “In semiconductor, technology inflections that enable lower leakage transistors, low resistance inter-connects, and advanced patterning are expanding our markets in providing a catalyst to grow our share.”
8) Quote: “Our market leadership in the overall transistor module combined with the most significant transistor device technology changes in the last 10 years, creates a great opportunity for Applied Materials. As foundry customers add capacity for the 28-nanometer node and start to ramp 20-nanometer technology, capital intensity is rising in the areas where Applied has the best technology and is a leader. As a result, we expect the strong 2012 performance that we demonstrated in our front-end products, implant, and PVD businesses to continue in 2013. In addition, the adoption of new epitaxy steps at advanced family technology nodes will enable us to further grow our [App] business. We achieved important milestones in our first quarter, winning development and production tool of record selections at our top three customers.”
9) Quote: “In Etch, we are focusing on key technology inflections in market segments where we believe we have opportunities to deliver technology with sustainable differentiation. With recent new application wins in logic, foundry and NAND flash, we are starting to demonstrate positive momentum.”
10) Quote: “In summary, we are optimistic about our opportunities for the year ahead and we are confident that the strategy we are executing will drive profitable growth. We are focused on growing our share of wafer fab equipment and have strong momentum.”

I believe the above optimism would translate into better profits and growth in the years ahead not only for Applied Materials but also for UMS.

4Q2012/FY2012 results (yet to be released) may not look good for UMS, but better times lie ahead. I am expecting a final dividend of SGD 2.0 cents per share but I could be completely wrong !

(Vested)

[Drizzt]

hi boon, in your opinion what do you think of UMS ability to pay 4 cents dividend consistently? 13.7 mil.

[Boon]

hi boon, in your opinion what do you think of UMS ability to pay 4 cents dividend consistently? 13.7 mil.

Hi Drizzt,

Dividend Payout by UMS for the past 3 years : (SGD cents)

1Q2010 = 1 cent
2Q2010 = 1 cent
3Q2010 = 1 cent
4Q2010 = 2 cents
1Q2011 = 1 cent
2Q2011 = 1 cent
3Q2011 = 1 cent
4Q2011 = 3 cents
1Q2012 = 1 cent
2Q2012 = 1 cent
3Q2012 = 1 cent
4Q2012 = ?????

I think we will get at least 1 cent for 4Q2012, but my guess is 2 cents.

Going forward, I believe a quarterly dividend payout of 1 cent is sustainable PROVIDED the strategic partnership between Applied Materials and UMS remains intact.

I will provide my thoughts as to why I think so after the release of FY2012 result by UMS. But the short answer to your question is simply - its ability to generate FCF.

[Drizzt]

yeah i guess the relationship is important, tried asking applied why they stuck with ums.

even before 2010 applied was interested in ums

[Boon]

Reason for Applied Materials optimism - TSMC is even more bullish on its 20nm SoC production in 2014-2015

TSMC achieved close to 100% market share on 28nm process in 2012, as analyst predicts Apple deal.
Josh Ong
18 January 2013

TSMC Chairman and CEO Morris Chang has indicated that the company achieved close to 100% market share on its 28nm chip process and should continue to succeed as wafer shipments triple this year, prompting market watchers to predict a crucial deal with Apple for its A series processors, China Times reports.
Chang said the company plans to invest $9 billion in capital expenditures this year, and will likely spend even more in 2014.
In 2012, 28nm chips accounted for about 12% of TSMC’s revenues, or $2.1 billion (NT$61.5 billion). Chang expects that figure to soar to $6.2 billion (NT$180 billion). The company recently posted fourth quarter revenues of $4.5 billion (NT$131 billion) and net income of $1.4 billion (NT$41.5 billion).
Chang also suggested that TSMC’s success with the 28nm process has lead to a near monopoly.
“We have enjoyed throughout the year, in spite of a lot of attempts at competition, close to 100% foundry market share in 28nm technology,” he said.
According to China Times, Chang’s comments led analysts in attendance to believe that TSMC has secured orders from Apple for its upcoming A series processors. Apple’s A6X chip is currently produced on a 32nm process by Samsung, but a reduction to 28nm could result in power savings and improved performance for future devices.
Reports that Apple would move away from Samsung, which is also one of its fiercest competitors in addition to being a manufacturing partner, to TSMC have persisted for years, but they have been gaining momentum as of late. Earlier this month, China Times claimed TSMC had begun trial production of a 28nm A6X processor.
Aside from Apple, TSMC has also won orders for chips from other companies. AMD recently confirmed that its 28nm Kabini and Temash APUs will be produced by TSMC after having cancelled a different set of processors scheduled to be built by rival GlobalFoundries.
Looking farther ahead, rumors have suggested that Apple could tap TSMC for a future A series processor produced on the 20nm process.
TSMC is investing part of its capital expense funds in its 20nm production line, and Chang says customer interest in 20nm has been strong. He expects full production to ramp up in 2014 and 2015 even more quickly than 28nm has.
“Enough discussions have taken place with enough customers with large requirements to lead us to believe that in both its first and second year of 20nm SoC production (2014-2015), the volume of 20nm SoCs would be larger than 28nm in its first and second years of production (2012-2013),” he said.
Meanwhile, Samsung is working to build out its own 28nm production processes. For instance, upgrades to its Austin factory should add 28nm capability in the second half of this year. The company also has plans to finish building 20nm and 14nm lines by the end of this year, though it may choose to focus on its own Exynos mobile processors. Of course, if Apple does end up moving its orders over to TSMC, Samsung might not have much of a choice in the matter.
Update: Added direct quotes from TSMC’s webcast for clarification. BrightWire’s original paraphrase of the original China Times article suggests the 100% market share is a forecast, but Chang’s figures are actually for 2012.

http://thenextweb.com/asia/2013/01/18/ts...pple-deal/

[Boon]

Semi industry is now sole-sourced, says Penn

David Manners
Monday 25 February 2013 08:28

The semiconductor industry is becoming single-sourced as companies find it economically impossible to use multiple fabs for the same chip design, Malcolm Penn, CEO of Future Horizons, tells SEMI’s ISS 2013 meeting in Stresa on Lake Maggiore this morning.

"Portability is no longer possible – even for the CPA – there is no chance at the mask or even at the OASIS level," says Penn, "the pre-DFM file shares the nearest commonality but that falls down at the SRAM level."

"Many ARM hard cores are specially tuned to each foundry," adds Penn, "DFM is already finely tuned and foundry dependent. If you still think SOCs are not single-sourced, ask Apple."

Penn’s conclusion is: "Not only is the chip industry now fabless, with a few notable exceptions, it is also single-sourced."

Of course, with TSMC making all the 28nm output last year, and with TSMC CEO Morris Chang, saying he expects to make nearly all of the 28nm ICs made in 2013, there is only one source of leading edge fab.

http://www.electronicsweekly.com/Article...s-penn.htm

[BeDisciplined]

Hi, please educate the relations of TSMC and semicon industry sole source to UMC