Faraday Reports Second Quarter 2023 Results

Revenue was NT$2,917 Million with a Reported EPS of NT$1.66

Hsinchu, Taiwan -- July 25, 2023 -- Faraday Technology Corporation (“Faraday” or the “Company”) (TWSE: 3035), a leading fabless ASIC service and silicon IP provider, today announced its consolidated financial results for the second quarter of 2023. Second quarter consolidated revenue was NT$2,917 million, down by 11% QoQ and 13% YoY, with gross margin of 43.6%. Net income attributed to stockholders of the parent was NT$414 million, with a basic EPS of NT$1.66.

Looking back on the second quarter, revenue for this quarter decreased 11% QoQ, reaching NT$2,917 million. Although all 3 major products showed a decline on a quarterly basis, the long-term growth indicators IP and NRE continued to show growth compared to the same period last year, despite last year being a high base period. IP Revenue was NT$343 million, decreased by 10% QoQ and increased by 8% YoY. NRE revenue was NT$489 million, decreased by 21% QoQ and increased by 11% YoY. Mass production on the other hand was impacted by the high based period last year and customer inventory adjustments, resulting in a decrease of 8% QoQ, reaching NT$2,085 million. In terms of profitability, gross margin for second quarter declined 1 percentage point from previous quarter reaching 43.6%, operating margin was 14.4% and basic EPS decreased by 18% from previous quarter resulting in NT$1.66. During the first half of the year, the accumulated volume of ASIC design win projects remained stable. With continuous growth in ASIC demand supported by various applications, Faraday has successfully break-through advanced process technology through winning a 14nm SoC ASIC project from an international client, utilizing self-developed 14nm advanced process IP solutions and SoC development platform. This achievement further expands the application landscape of AI.

Looking ahead to third quarter, overall revenue is expected to slightly increase compared to previous quarter. Looking towards the future, ASIC industry is expected to continue prosperous development through the emerging various applications. Faraday, with its comprehensive custom solutions and self-developed IP solutions, along with diversified business models, can provide customers with exclusive design services. The Company is also actively engaged in advanced packaging technologies (2.5D/3D packaging) and Chiplet design through project wins from international customers.

Lastly, Faraday places great importance on sustainable development. The Company provides customers with multi-site manufacturing support services across regions, offering flexible production support to mitigate manufacturing risks caused by significant environmental factors, thereby further strengthening Faraday’s commitment to sustainable business operations.

Summary of Operating Results

(Amount: NT$ million)	2Q23	1Q23	QoQ% change
Revenues	2,917	3,262	-10.6
Gross profit	1,271	1,458	-12.9
Operation expenses	(851)	(808)	5.2
Operating income	420	650	-35.4
Non-operating items	95	(10)	-1008.0
Net income attributed to stockholders of the parent	414	502	-17.5
EPS (NTD)	1.66	2.02