Faraday Reports Third Quarter 2023 Results

Hsinchu, Taiwan -- October 24, 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 third quarter of 2023. Third quarter consolidated revenue was NT$2,962 million, up by 2% QoQ and down by 9% YoY, with gross margin of 43.2%. Net income attributed to stockholders of the parent was NT$354 million, with a basic EPS of NT$1.42.

Looking back on the third quarter, the overall revenue increased by 2% reaching NT$2,962 million, driven by growth in mass production. However, both IP and NRE revenues decreased for the quarter, with IP revenue reporting at NT$330 million, a 4% decrease QoQ and 13% decrease YoY, and with NRE reporting at NT$321 million, a 34% decrease QoQ and 23% decrease YoY. On the contrary, mass production revenue grew by 11% from the previous quarter reaching NT$2,311 million. In terms of profitability, the third quarter’s gross margin outperformed expectations at 43.2%. Operating expenses maintained at a similar level to the previous quarter, resulting in a 2% growth in operating profit from the previous quarter, reaching NT$428 million. Operating profit margin was 14.5%, with basic EPS declining by 14.5% compared to the previous quarter, amounting to NT$1.42. Faraday continues to make progress in advanced processes and advanced packaging business, not only securing a 14nm AI ASIC project from an international client, but also actively expanded into advanced packaging (2.5D/3D packaging) by collaborating with clients on chiplet designs. In the third quarter, the company achieved further success by securing new advanced packaging projects from international clients, thereby expanding its value proposition.

Looking ahead to fourth quarter, revenues will decline as compared to previous quarter. While full-year revenue may experience a short-term decline due to impact from mass production, IP and NRE revenue is expected to remain strong, indicating positive business development for the Company. In the long-run, Faraday remains committed to long-term investment in IP research and SoC design, accumulating not only significant technical expertise but also reinforcing its proficiency in front-end design. Faraday will continue to accelerate the ASIC projects expansion and design implementation service, and in regards to advanced packaging, Faraday’s crucial positioning in the vertical disintegration supply chain allows it to leverage its hard and soft skills, which are robust supply chain management and research and development. By utilizing a flexible business model and diverse technology, the Company can offer clients a tailored “Faraday Total Advanced Packaging” solution to meet the diverse requirements of the advanced packaging market.

[1] Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with Taiwan-International Financial Report Standards (TIFRSs). They represent comparisons among the three-month period ended September 30, 2023, the three-month period ended June 30, 2023, and the equivalent three-month period that ended September 30, 2022. For all 3Q23 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$31.42 to one U.S. dollar.

Summary of Operating Results

(Amount: NT$ million)	3Q23	2Q23	QoQ% change
Revenues	2,962	2,917	1.6
Gross profit	1,281	1,271	0.8
Operation expenses	(853)	(851)	0.3
Operating income	428	420	2.0
Non-operating items	24	95	-74.7
Net income attributed to stockholders of the parent	354	414	-14.5
EPS (NTD)	1.42	1.66