Taiwan Mask Corp. Eyes Stronger Second Half with Higher Margins

Taiwan Mask Corporation anticipates a stronger second half of the year, with improved gross margins driven by increased orders from Southeast Asian clients and the completion of large-size photomask construction.

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The semiconductor is a capital-intensive industry and must continue to invest to obtain new technologies and new orders. My strategy is to cut non-core subsidiaries and concentrate resources on the main business. The overall situation has already shown a turning point.

During the company's shareholders' meeting, Chairman Tu Chun-kuang emphasized the need for continuous investment in the capital-intensive semiconductor industry to secure new technologies and orders. He highlighted a strategic shift towards divesting non-core subsidiaries to concentrate resources on the main business, signaling a turning point for the company.

General Manager Chen Li-chun noted that visibility is better than in the first half, with large-size photomask construction set to finish in the third quarter and begin contributing revenue in the fourth. This, along with AI-related silicon photonics clients and price adjustments, is expected to boost operations and gross margins throughout the year.

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In the second half of the year, the volume of Southeast Asian clients is expected to increase, with visibility better than in the first half. Large-size photomask construction is expected to be completed in the third quarter and begin contributing revenue in the fourth quarter, driving growth quarter by quarter in the second half.

The company is also progressing towards more advanced nodes, with validation for sub-28nm processes underway and mass production anticipated next year. Demand for photomasks for compound semiconductor clients is rising, presenting a new business opportunity. Capital expenditure remains steady at NT$1-2 billion annually, focusing on critical components and mid-range equipment, with core clients expected to be wafer foundries.

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The company's strategy focuses on configuring production capacity to target mass production at mid-range technology nodes, to increase the shipment volume of high-value products.