San Chih Semiconductor's revenues from sapphire ingot production will exceed that of semiconductor in the first half of 2011, according to analyst forecasts. San Chih's sapphire ingot facility and equipment went online in the fourth quarter of 2010 and has begun contributing to revenues since November. December sales should rise to NT$7 million (US$234,000) about 10-15% of overall monthly revenues, the company said.

San Chih will have installed 10 furnaces by the end of 2010 and plans to increase to 15-20 in the first half of 2011, bringing monthly capacity to 100,000mm, the company indicated, adding that the facility could house maximum monthly capacity of 400,000mm when all production lines are online in the first quarter of 2012.

San Chih mainly manufactures 2-, 4- and 5-inch semiconductor wafers, and has entered volume production for 6-inch wafers as well. It is still evaluating the opportunities in producing of 8-inch wafers at the moment. The company estimates a revenue growth higher than the industry average for 2011 since semiconductor fabs in Europe and the US are outsourcing their small- to medium-size wafer businesses as they place more emphasis on the large-size segment.

San Chih's 2011 EPS is expected to rise to NT$12 from NT$7-8 in 2010 thanks to the higher margin of sapphire ingot businesses, the analysts noted.