Hsinchu, Taiwan -- April 24, 2008 -- Faraday Technology Corporation (TSE: 3035), a leading fabless ASIC design solution and silicon IP provider, today announced its unconsolidated operating results for the quarter ended March 31, 2008. The first quarter revenue was NT$1,152 million, while net income and basic earnings per share came to NT$214 million and NT$0.63 per share, respectively.
Due to the change of product mix from ASIC business and NTD appreciation, gross margin of the quarter was 47.7%, decreased 4.5% compared to the previous quarter. The operating margin of 1Q08 was 10.2% after implementing a new ROC accounting rule of expensing employee profit sharing.
The ASIC revenue showed a significant migration to the advanced technology in the quarter. The revenue from 0.13um technology presented 15.8% of the overall ASIC revenue, increased 37% compared to the previous quarter; and more than five times revenue growth over the same period last year.
Summary of Operating Results
Operating Results
| (Amount: NT$ million) | 1Q08 | 4Q07 | QoQ% change | 1Q07 | YoY% change |
| Revenue | 1,152 | 1,390 | (17.1) | 1,148 | 0.3 |
| Gross Profit | 549 | 722 | (23.9) | 608 | (9.8) |
| Operation Expenses | (432) | (393) | 10.0 | (294) | 46.9 |
| Operating Income | 117 | 329 | (64.4) | 314 | (62.9) |
| Non-op. Income (Expenses) | 97 | 49 | 101.2 | 265 | (63.4) |
| Net Income | 214 | 383 | (44.0) | 578 | (63.0) |
| EPS (NT$ per share) | 0.63 | 1.14 | | 1.71 | |
Detailed Financials Section
COGS & Expenses
| (Amount: NT$ million) | 1Q08 | 4Q07 | QoQ% change | 1Q07 | YoY% change |
| Revenue | 1,152 | 1,390 | (17.1) | 1,148 | 0.3 |
| COGS | (603) | (668) | (9.7) | (540) | 11.7 |
| Wafer | (296) | (351) | (15.7) | (256) | 15.6 |
| Other Mfg. Costs | (307) | (317) | (3.2) | (284) | 8.1 |
| Gross Profit | 549 | 722 | (23.9) | 608 | (9.8) |
| Gross Margin (%) | 47.7% | 52.0% | | 53.0% | |
| Total Operating Exp. | (432) | (393) | 10.0 | (294) | 46.9 |
| G&A | (60) | (58) | 3.4 | (39) | 53.8 |
| Sales and Marketing | (63) | (42) | 50.0 | (25) | 152.0 |
| R&D | (309) | (293) | 5.5 | (230) | 34.3 |
| Operating Income | 117 | 329 | (64.4) | 314 | (62.9) |
| Operating Margin (%) | 10.2% | 23.7% | | 27.4% | |
Non-operating Income (Expenses)
| (Amount: NT$ million) | 1Q08 | 4Q07 | 1Q07 |
| Net Non-operating Income (Loss) | 97 | 49 | 265 |
| Net Interest Income (Expense) | 4 | 5 | 7 |
| Net Investment Income (Loss) | 112 | 58 | 251 |
| Reverse on (Inventory Loss Provision) | (15) | (8) | (1) |
| Gain (Loss) on Disposal of Investment | - | - | - |
| Exchange Gain (Loss) | (2) | 0 | 0 |
| Others | (2) | (6) | 8 |
Current Assets
| (Amount: NT$ million) | 1Q08 | 4Q07 | 1Q07 |
| Cash & Cash Equiv. | 1,712 | 1,660 | 2,026 |
| Notes & Accounts Receivable | 867 | 1,035 | 834 |
| Days Sales Outstanding | 75 | 75 | 77 |
| Inventory | 349 | 399 | 173 |
| Avg. Inventory Turnover | 66 | 53 | 40 |
| Total Current Assets | 3,299 | 3,494 | 3,344 |
Liabilities
| (Amount: NT$ million) | 1Q08 | 4Q07 | 1Q07 |
| Total Current Liabilities | 1,450 | 1,387 | 947 |
| Notes & Accounts Payable | 652 | 759 | 432 |
| Others | 798 | 628 | 515 |
| Long-term Liabilities | 20 | 21 | 24 |
| Total Liabilities | 1,470 | 1,408 | 971 |
| Liabilities to Equity | 22.5% | 21.8% | 13.4% |
Analysis of Revenue
ASIC Revenue Breakdown by Region
| Region | 3Q07 | 4Q07 | 1Q08 |
| Taiwan | 48.2% | 37.0% | 44.7% |
| USA | 23.1% | 15.5% | 15.9% |
| Japan | 5.4% | 8.3% | 8.6% |
| Europe | 15.0% | 31.2% | 16.8% |
| Korea | 2.7% | 2.9% | 1.9% |
| China | 5.6% | 5.1% | 12.1% |
ASIC Revenue Breakdown by Geometry
| Geometry | 3Q07 | 4Q07 | 1Q08 |
| 90nm | 0.4% | | |
| 0.13µm | 8.6% | 9.5% | 15.8% |
| 0.162µm | 13.6% | 5.6% | 11.7% |
| 0.18µm | 52.4% | 57.9% | 43.9% |
| 0.22µm | 1.6% | 2.6% | 2.2% |
| 0.25µm | 7.9% | 10.4% | 8.4% |
| 0.35µm | 9.7% | 8.6% | 11.3% |
| 0.45µm | 1.5% | 1.1% | 1.8% |
| 0.5µm | 3.8% | 4.0% | 4.6% |
| 0.6µm | 0.5% | 0.3% | 0.3% |
Total Revenue Breakdown by Customer Type
| Type | 3Q07 | 4Q07 | 1Q08 |
| Fabless | 43.5% | 64.0% | 47.0% |
| System | 41.2% | 26.6% | 40.7% |
| Foundry | 15.3% | 9.4% | 12.3% |
Total Revenue Breakdown by Billing Method
| Billing | 3Q07 | 4Q07 | 1Q08 |
| ASIC | 68.3% | 71.5% | 70.7% |
| Design Service | 11.8% | 7.6% | 8.2% |
| IP | 19.9% | 20.9% | 21.1% |
ASIC Revenue Breakdown by Application
| Application | 3Q07 | 4Q07 | 1Q08 |
| Peripheral /Storage | 39.1% | 25.1% | 27.6% |
| Comm. | 29.7% | 51.3% | 40.9% |
| Display | 4.0% | 3.3% | 2.4% |
| Consumer | 5.7% | 2.7% | 7.9% |
| Multimedia | 17.8% | 13.1% | 19.8% |
| Others | 3.7% | 4.5% | 1.4% |
About Faraday
Faraday Technology Corporation is a leading silicon IP and fabless ASIC vendor. The company's broad IP portfolio includes 32-bit RISC CPUs, DSPs, PHY/Controllers for USB 2.0, Ethernet, and Serial ATA. With 2007 revenue of US$ 156 million, Faraday is one of the largest fabless ASIC companies in the Asia-Pacific region, and it also has a significant presence in other world-wide market. Headquartered in Taiwan, Faraday has service and support offices around the world, including the U.S., Japan, Europe, and China. For more information, please visit: www.faraday-tech.com.
[1] Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are un-audited, un-consolidated, and represent comparisons among the three-month period ending March31, 2008, the three-month period ending December 31, 2007, and the equivalent three-month period that ended March 31, 2007. For all 1Q08 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$31.529 to one U.S. dollar.