Powerchip Semiconductor Manufacturing Corp. (PSMC, 6770) reported self-prepared consolidated third-quarter results on Oct. 21 through Taiwan’s Market Observation Post System, with revenue of NT$21.34 billion, gross profit of NT$10.15 billion, net profit of NT$6.50 billion, and earnings per share of NT$1.38. Based on the disclosed figures, gross margin was about 47.6%.
The company held its third-quarter earnings conference on the same day. President Chu Hsien-kuo said the impact of price increases is being reflected gradually, and PSMC expects double-digit revenue growth to continue in the fourth quarter. He also said the company is targeting another 10% to 20% increase in foundry pricing in 2027. This was PSMC’s first quarterly earnings release since Chairman Frank Huang died on July 31.
Gross margin rose for three straight quarters
According to the comprehensive income statement filed on the Market Observation Post System, PSMC’s gross margin was 10.23% in the first quarter, 28.28% in the second quarter, and about 47.6% in the third quarter based on the self-prepared figures. In the third quarter of last year, the company posted a gross loss of NT$770 million and a net loss of NT$2.73 billion.
Third-quarter revenue was about 23% higher than the NT$17.29 billion reported in the second quarter, and about 80% above the NT$11.84 billion recorded a year earlier. Both growth rates were derived from the disclosed figures.
Earnings were increasingly supported by core operations
PSMC’s profit mix also changed over the year. In the first quarter, net profit reached NT$14.23 billion, but net other income and expenses totaled NT$15.37 billion, while operating gross profit was only NT$1.39 billion. By the third quarter, gross profit of NT$10.15 billion had become the main source of earnings.
The company said the third-quarter self-prepared figures have not yet been reviewed by auditors.
Price increases remained the main driver
In its monthly revenue filings, PSMC said the changes in August and September revenue were due to higher customer demand, increased sales volume, and higher selling prices. September revenue came in at NT$7.7 billion, up 94% from a year earlier.
According to ETtoday, Chu said at the second-quarter earnings conference on July 14 that after the company adjusted product prices in February this year, second-quarter revenue growth came mainly from a higher average selling price rather than increased shipments. He said PSMC raised DRAM wafer input pricing by another 45% in July, and, given the wafer production cycle, the new pricing is expected to start showing up in revenue and profit from November.
According to United Daily News, Chu said at the third-quarter earnings conference that memory foundry services are priced based on wafer input. The average selling price of output in the third quarter still lagged wafer input pricing in the same quarter by about 30%. Together with price adjustments in logic foundry services, he said revenue still has room to grow. Chu also said mature-node capacity remains tight, and PSMC is negotiating long-term contracts with customers to lock in both pricing and volume as it targets another 10% to 20% increase in foundry pricing in 2027.
First earnings release after Huang’s death also outlined expansion plans
Frank Huang died on July 31. PSMC said at the time that Vice Chairman Hsieh Tsai-chu would act as chairman in accordance with the law. At the second-quarter earnings conference in July, Huang had said the company would definitely distribute dividends next year and that foundry operators could see gross margins exceed 40% next year.
United Daily News reported that Hsieh said at the third-quarter earnings conference that PSMC hopes to secure another small-scale semiconductor plant within the next three to five years to support both new product expansion and traditional DRAM supply. He said silicon capacitors use existing DRAM processes, so capacity expansion would crowd out DRAM output. He estimated that industry demand could reach 30,000 to 50,000 wafers per month after the second half of next year, while PSMC, constrained by current capacity, can produce only about 10,000 wafers at most.
On new capacity investment, Hsieh said he wants customers to participate through equipment leasing or prepayments covering 30% to 60% of the investment, reducing the company’s risk. With cleanroom space fully used, PSMC will conduct research on new plant projects in Taiwan, Singapore, and Japan.