Bulletin: Vanguard's Capital Structure Can Cushion The Looming Downturn

TAIPEI (S&P Global Ratings) Nov. 1, 2022--S&P Global Ratings said today that Vanguard International Semiconductor Corp. has sufficient financial buffer to withstand a reduction in downstream inventory levels that could last for a few quarters into 2023. We believe the Taiwan-based chipmaker (BBB-/Stable/--) will remain debt free on an adjusted basis over the next two years. This is despite weakening cashflow and an increase in capital expenditure (capex) for expansion. We expect Vanguard's average utilization rate to decline to about 85% in 2022 and 70%-80% in 2023, from our previous base case of 100% and 95%, respectively. The company's revenue started to decline year on year in the September quarter of 2022, after several quarters of growth since early 2020.

...November 1, 2022 TAIPEI (S&P Global Ratings) Nov. 1, 2022--S&P Global Ratings said today that Vanguard International Semiconductor Corp. has sufficient financial buffer to withstand a reduction in downstream inventory levels that could last for a few quarters into 2023. We believe the Taiwan-based chipmaker (###-/Stable/--) will remain debt free on an adjusted basis over the next two years. This is despite weakening cashflow and an increase in capital expenditure (capex) for expansion. We expect Vanguard's average utilization rate to decline to about 85% in 2022 and 70%-80% in 2023, from our previous base case of 100% and 95%, respectively. The company's revenue started to decline year on year in the September quarter of 2022, after several quarters of growth since early 2020. The downturn is amid weakening global demand for most downstream consumer electronic devices. Demand for Vanguard's major products has been hit, particularly for small and large panel display driver integrated circuits,...

Bulletin