News
22.Nov.2022
Solartech’s front-end semiconductor revenue CAGR will reach 50% in the next five years
Applied Materials Technology ("Solartech"; 1785 TT/TW) held its 3Q22 analyst meeting today (Nov 22). In the first three quarters of 2022, the company's value added-sales (VAS) increased by 8.8% to NT$4.24 billion, resulting in a record gross profit.
The price of precious metals affected Solartech's consolidated revenue in the first three quarters of 2022, and it was down 11.4% to NT$20.63 billion, while its main profit source, value-added sales (VAS), increased 8.8% to NT$4.24 billion. Furthermore, Solartech's overall production efficiency was further enhanced by its digital transformation efforts, resulting in a 14.7% YoY increase in operating income. The value-added sales of hard disk drives (HDD), semiconductors, and displays businesses accounted for 44.3%, 27.1%, and 10.3%, respectively, in the first three quarters of 2022. In 2022, Solartech distributed cash dividends of NT$1.50, representing a dividend yield of 4.6%.
In response to the market's concern about the decline in overall end demand, Chairman Huang Chi-feng said that HDD is indeed affected by short-term headwinds, but with the advent of the cloud era, the market's demand for high-capacity hard disks will increase, and the long-term growth of the hard disk industry remains promising. With front-end semiconductors, Solartech is gaining market share, and its revenue scale remains small, so it is not affected by fluctuations in market demand.
Chairman Huang remains optimistic about the company's future based on three major industry trends, including the increasing complexity of electronic products and the need for newer alloys and materials. Second, local supply chains are becoming increasingly important; and third, the circular economy is becoming increasingly important to the industry. In addition to these three industry trends that will drive Solartech's continued growth, the company will also continue to pursue five internal transformation strategies, including scale expansion, product portfolio optimization, operational excellence, technology upgrade, and responsible business. A combination of internal growth engines and external growth engines could contribute significantly to growth in revenue and profitability in the long run.
In the next five years, Solartech targets a 50% CAGR in its front-end semiconductor materials value-added sales (VAS), resulting in double-digit growth in value-added sales and earnings to support further value-enhancing investments and sustained dividend payouts to its shareholders.
The price of precious metals affected Solartech's consolidated revenue in the first three quarters of 2022, and it was down 11.4% to NT$20.63 billion, while its main profit source, value-added sales (VAS), increased 8.8% to NT$4.24 billion. Furthermore, Solartech's overall production efficiency was further enhanced by its digital transformation efforts, resulting in a 14.7% YoY increase in operating income. The value-added sales of hard disk drives (HDD), semiconductors, and displays businesses accounted for 44.3%, 27.1%, and 10.3%, respectively, in the first three quarters of 2022. In 2022, Solartech distributed cash dividends of NT$1.50, representing a dividend yield of 4.6%.
In response to the market's concern about the decline in overall end demand, Chairman Huang Chi-feng said that HDD is indeed affected by short-term headwinds, but with the advent of the cloud era, the market's demand for high-capacity hard disks will increase, and the long-term growth of the hard disk industry remains promising. With front-end semiconductors, Solartech is gaining market share, and its revenue scale remains small, so it is not affected by fluctuations in market demand.
Chairman Huang remains optimistic about the company's future based on three major industry trends, including the increasing complexity of electronic products and the need for newer alloys and materials. Second, local supply chains are becoming increasingly important; and third, the circular economy is becoming increasingly important to the industry. In addition to these three industry trends that will drive Solartech's continued growth, the company will also continue to pursue five internal transformation strategies, including scale expansion, product portfolio optimization, operational excellence, technology upgrade, and responsible business. A combination of internal growth engines and external growth engines could contribute significantly to growth in revenue and profitability in the long run.
In the next five years, Solartech targets a 50% CAGR in its front-end semiconductor materials value-added sales (VAS), resulting in double-digit growth in value-added sales and earnings to support further value-enhancing investments and sustained dividend payouts to its shareholders.
