X-Fab enjoys strong second quarter

X-Fab enjoys strong second quarter

Business news |
By Peter Clarke

Compared to the second quarter of 2016, sales were up by 18 percent but were down 6 percent on the previous quarter.

For the third quarter of 2017 X-Fab expects sales of $138 million and $143 million and in the rest of the year the company expects a shift away from the manufacture of consumer ICs and towards automotive, industrial and medical business, where margins are higher.

“X-Fab further increased utilization in its factories,” said Rudi De Winter, CEO of X-Fab, in a statement. X-Fab has been in the process of taking over Altis Semiconductor, a wafer fab south of Paris. “The integration of X-Fab France is going well. As planned, we have delivered products for product qualification from X-Fab France on X-Fab’s proprietary technologies to selected customers. We are planning first production starts this quarter.”

X-Fab saw non-recurring engineering (NRE) revenue in 2Q17 of $13.0 million. NRE is a leading indicator of production revenue and X-Fab takes that the figure as a positive sign of interest in its manufacturing processes. Meanwhile sales in automotive, industrial and medical totaled $82.9 million, an increase of 24 percent compared to the same quarter in 2016 and 7 percent higher compared to the previous quarter.

The strength of demand has prompted X-Fab to pull-in capital expenditure that would otherwise have been deferred until 2018. X-Fab is now planning to spend $40 million at its wafer fab in Malaysia to increase manufacturing capacity by 4,000 wafer starts per month, with effect from 1Q18.

X-Fab is also introducing silicon-carbide circuit production at its fab in Texas and wafers have been delivered to customers for product qualification. X-Fab now expects its first commercial SiC production revenue in the 2H17.

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