Faraday Reports Full-Year 2023 Results

Revenue for 4Q23 was NT$2,824 Million with a Reported EPS of NT$1.29
2023 Revenue was NT$12 billion, with both IP and NRE Achieving Triple-Year Growth

Hsinchu, Taiwan -- February 20, 2024 -- 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 fourth quarter of 2023. Fourth quarter consolidated revenue was NT$2,824 million, down by 5% QoQ and down by 13% YoY, with gross margin of 45.9%. Net income attributed to stockholders of the parent was NT$320 million, with a basic EPS of NT$1.29. For the fiscal year of 2023, consolidated revenue totaled NT$11,966 million, and net income attributed to stockholders of the parent was NT$1,589 million, with an EPS of NT$6.39.

Fourth Quarter 2023 Highlights:

Revenue of NT$2,824 million (US$88.8 million)
Gross margin was 45.9%
Net income attributed to stockholders of the parent was NT$320 million (US$10.1 million)
Earnings per share of NT$1.29

Looking back on the fourth quarter, the overall revenue declined by 5% QoQ and 13% YoY, reaching NT$2,824 million. In terms of product mix, IP revenue increased by 5% QoQ and decreased by 2% YoY, amounting to NT$347 million. NRE experienced a decrease of 7% QoQ and 33% YoY, totaling NT$298 million. Mass production revenue declined by 6% QoQ and 11% YoY, reaching NT$2,179 million. Gross margin increased by 2.7 percentage points to 45.9% due to the impact of product mix and inventory valuation reversal gain. Operating expenses decreased by 2%, leading to a 7% increase in operating profits to NT$457 million. Operating margin increased by 1.7 percentage points to 16.2%, while basic EPS decreased by 10% QoQ to NT$1.29.

For the full year 2023, consolidated revenue decreased by 8% YoY to NT$11,966 million. Despite a 12% YoY decline in mass production revenue to NT$8.8 billion due to macro uncertainties, the long-term development of the IP and ASSIC industries remained positive. IP and NRE both achieved three consecutive years of growth driven by various applications. In terms of geopolitical challenges, the global market is gradually diversifying. As one of the few ASIC manufacturers with IP development capabilities, Faraday continues to penetrate existing key processes and actively explores new collaboration opportunities, resulting in a resilient growth of NT$1,402 million in IP revenue. In terms of ASIC projects, the Company has maintained a high number of projects over the years, and with developments in advanced processes and advanced packaging, together driving NRE revenue to a new record high of NT$1,725 million.

Looking ahead to first quarter of 2024, despite a decline in consolidated revenue due to mass production being impacted by client inventory adjustments, substantial growth in NRE revenue is expected to set a new quarterly record, indicating positive future operational development. The Company’s accumulated experience with numerous design projects over the years has established a robust growth foundation, and the accelerating volume of projects preparing for mass production serves as an indicator for future mass production performance. As the ASIC industry enters the era of advanced process and advanced packaging, Faraday will continue to consolidate its position in mature process with niche applications while venturing into new technological fields. Leveraging Faraday’s thirty years of technical expertise, increased investment in technology research and R&D resource, and strategic collaborations through various business models, the Company aims to enhance and transform its value in this new era, translating this to valuable revenue.

Summary of Operating Results

(Amount: NT$ million)	4Q23	3Q23	QoQ% change
Revenues	2,824	2,962	-4.7
Gross profit	1,297	1,281	1.2
Operation expenses	(840)	(853)	-1.5
Operating income	457	428	6.7
Non-operating items	6	24	-74.3
Net income attributed to stockholders of the parent	320	354	-9.6
EPS (NTD)	1.29	1.42