IC design service provider Faraday Technology expects its revenues to increase more than 35% sequentially in the first quarter of 2012, thanks to new orders for embedded MMC (eMMC) controllers. Revenues hit an all time high of NT$580 million (US$19.6 million) in January, and are set to climb to new records in February and March, Faraday said.
Faraday reportedly has secured orders for eMMC controllers used in smartphones from Samsung Electronics with mass shiments starting in early 2012. United Microelectronics (UMC), which Faraday partners with, uses its 65nm process technology to manufacture the chips, according to industry sources. The first batch of orders Samsung placed is estimated at 5-10 million units, the sources indicated.
In response, Faraday said it does not comment on individual clients.
Faraday president Wilson Tzang said during the company's recent investors meeting that revenues for 2012 are likely to surpass the record of NT$6.28 billion reached in 2010. In addition to orders for eMMC chips, the growing sales of its USB 3.0 IP products will play another growth driver for the company in 2012, Tzang noted.
Sales generated from USB 3.0 IP products accounted for 5% of Faraday's 2011 revenues, compared to only 2.5% in 2010, the company disclosed. The proportion will expand in 2012 as more end-market applications transition to faster USB 3.0 interface. However, with more players tapping the market, price competition for USB 3.0 storage devices will heat up, Faraday pointed out.
Faraday announced revenues slid 5.8% sequentially to NT$1.29 billion in the fourth quarter of 2011. ASIC products accounted for 80.8% of the fourth-quarter sales, followed by IP and non-recurring engineering (NRE) designs with 13.2% and 6%, respectively.
Geographically, Taiwan remained the largest contributor to Faraday's sales in the fourth quarter, but saw its share decrease to 35.8% from 46.3% in the third quarter. Korea replaced China as Faraday's second-largest market in the fourth quarter, accounting for 24.6% of company revenues.
Industry observers identify Faraday's volume shipments of eMMC controllers to Samsung as a factor behind the growing sales from Korea.
Faraday reported a net EPS of NT$0.30 on revenues of NT$5.33 billion for 2011, with a 43.8% gross margin. The firm expects its gross margin to stay high at above 40% in the first quarter of 2012.