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Taiwan-based Faraday Technology, a fabless ASIC service and silicon IP provider, has expressed optimism about 28nm chip demand and expects revenues generated from 28nm chip orders to make a positive contribution to company revenues in 2018.
Faraday disclosed it has obtained new 28nm chip orders from the aviation sector. Orders for aviation applications come with higher quality and stability requirements than those for automotive applications, the provider of IC design services said.
Faraday added that for ASIC/SoC design services, the company is partnering with mainly United Microelectronics (UMC). Nevertheless, Faraday’s IPs are being adopted by multiple foundry companies.
Sales of Faraday’s IP products climbed to a 10-year high of NT$225 million (US$7.5 million) in the third quarter of 2017, which boosted the company’s overall gross margin to a three-year high of 52.5% during the quarter.
Faraday has been growing its presence in China and expanded its foundry partner portfolio locally, said company president Steve Wang. Rising sales of IPs from China led to Faraday’s overall IP revenue growth.
Despite a 5.1pp sequential increase in gross margin, Faraday’s revenues declined 16% sequentially to NT$1.27 billion in the third quarter. ASIC products accounted for 70.4% of Faraday’s third-quarter revenues.
Rising revenues generated from niche-market segments, such as smart meter and cloud storage, also buoyed Faraday’s gross margin growth in the third quarter, the company said. Faraday has also obtained orders for NRE designs for niche-market applications such as aerospace, office automation and 5G base stations.
Faraday generated net profits of NT$124 million in the third quarter, down 17% on quarter, with EPS reaching NT$0.50.
Faraday expects sales of its high-margin NRE and IP products to continue their growth in the fourth quarter, while sales of its ASIC design services will drop further.
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