Foxsemicon Integrated Technology, a semiconductor manufacturing equipment subsidiary of Foxconn, will post record revenues in 2021, reports DigiTimes. The Taiwanese firm is also on track to perform well into the rest of 2020 after an underwhelming Q1.
The publication notes the machinery maker’s sales have been driven by orders from Applied Materials, likely caused by the coronavirus pandemic.
Foxsemicon’s Bright Q2 Outlook
DigiTimes projects Foxsemicon’s sales will reach a total of NT$10 billion ($337.8 million) in 2021. The news service explained it made its projection using data provided by sources within the company. However, the firm’s CEO, Kevin Chiu, while not commenting directly on his business’s current financial picture, confirmed its etching and thin-film fabrication equipment has been in high demand.
Incorporated in 2001, Foxsemicon specializes in designing and producing equipment to fabricate, assemble, and test high-performance components. Like its clients, it encountered significant supply and demand disruption in the first quarter because of the coronavirus outbreak. The firm made NT$2.09 billion ($70.5 million) in the last period, which DigiTimes predicts will be its quarterly low for this year.
However, the firm’s business bounced back in Q2, with a predicted sequential expansion of 20 percent. Foxsemicon’s chief executive attributed its recent recovery to surging interest in memory chip fabrication equipment. Ironically, the global health crisis that depressed the manufacturer’s business last quarter looks to drive its success going forward.
The Impact of the Post-Coronavirus ‘New Normal’
According to DigiTimes, the corporation’s spiking revenue is due to Applied Materials increasing its orders for etching equipment.
In May, the Santa Clara, California-based concern announced it topped its Q1 2019 sales by 12 percent, driven in part by a 4 percent uptick in DRAM purchases. As a supplier for Intel, Samsung, and the Taiwanese Semiconductor Manufacturing Company (TSMC), the firm’s revenue grew because its clients saw an upswing in memory module demand.
Earlier this year, NAND and DRAM manufacturers enjoyed income bumps caused by the pandemic. Newly homebound students and workers required new equipment to operate remotely, which prompted a raft of new PC purchases. Also, as the utilization of cloud-based tools soared, web services companies bought memory chips to increase their server capacity.
At one point, market watchers believed the sales upswing would be temporary, but Applied Materials ordering behavior suggests otherwise. As Big Tech firms like Microsoft have indicated, the coronavirus outbreak has prompted a permanent rise in online activity. Therefore, cloud providers will need to build out their digital infrastructure on an ongoing basis.
Foxsemicon should benefit from the new normal as chip manufacturers will need new production equipment to address surging levels of product demand.