FourSemi’s first-half loss doubles on weak smartphone demand

Intelligent sensing chip provider Shanghai FourSemi Semiconductor Co. Ltd. (3625.HK) warned on Tuesday that it expects to report a net loss of 64.5 million yuan ($9.55 million) to 69.5 million yuan for the six months through June, widening by 109% to 125% from a 30.9 million yuan loss a year earlier.

The company attributed the larger loss to listing expenses, foreign-exchange losses on the conversion of its IPO proceeds from Hong Kong dollars into yuan, and higher payroll costs following an expansion of its R&D, sales and management teams.

Global smartphone demand remained weak during the period, while downstream brands cut production of lower- and mid-range models and reduced inventories. Rising memory prices also pushed up handset costs, prompting customers to slow chip purchases and wafer starts, weighing on revenue from FourSemi’s low-power audio business.

Still, the company said its diversification efforts were making progress. Revenue from its automotive audio products surged more than 300-fold year-on-year, while sales of haptic feedback chips rose more than 330%. The products have been shipped for use in smartwatches, smart glasses, dexterous robotic hands and gaming devices.

FourSemi shares opened higher on Wednesday and were up 8.5% at HK$97.7 by the midday break. The stock is up about 144% from its HK$40 March listing price.

By Lee Shih Ta

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