Hua Hong Semiconductor Ltd
HKEX:1347
Earnings Call Analysis
Q4-2023 Analysis
Hua Hong Semiconductor Ltd
The company successfully navigated through a challenging year, closing with a final quarter that showed promise for the future. Total assets bolstered from $9,974.3 million to $10,943.4 million, reflecting strategic investments in construction and equipment for the second 12-inch fab. However, this expansion led to an increase in total liabilities from $2,642.1 million to $2,928.9 million and a jump in the debt ratio from 26.5% to 26.8%, which slightly elevated the company's leverage.
Yearly revenue declined by 7.7% primarily due to a fall in the average selling price, which also drove down the gross margin significantly by 12.8 percentage points from the previous year. Although operating expenses rose by 19.3% due to lower government grants and heightened engineering costs, net profit was notable at $126.4 million. The year wrapped with an anticipation of a $450 million to $500 million revenue in Q1 2024 and a gross margin between 3% and 6%.
The company's capital expenditure reflects a concerted effort to bolster capacity, with the second 12-inch fab at the Wuxi plant expediting construction. The Q3/Q4 timeline for 2024 expects this expansion to add a 10,000 to 20,000 wafer capacity. Furthermore, the decisive strategy in product diversification and technology platform enhancement suggests a resilient posture amid competition and a potential uplift in average selling price (ASP) as loadings on fabs surge towards optimal utilization rates.
Despite a year-over-year decline in ASP, the company believes it has hit the bottom in Q4, anticipating stability or slight improvement in the near future. No significant write-offs have been reported, suggesting cleaner margins ahead. Management expects a modest start to 2024 but projects gradual recovery beginning as early as Q2 and a robust second half to outpace the performance in 2023. This optimism is underpinned by strong bookings and the successful execution of the 12-inch fab expansion, with customer commitments already in place to fill the burgeoning capacity.
The company maintains an emphasis on specialty technology, differentiating itself from Huali's advanced technology node focus. As global economic and customer dynamics evolve, the company's leadership in specialty segments is a bulwark against competitive pressures. Notably, the ramping up of the new 12-inch fab will span into 2027, with the potential for enriched partnerships to further affirm the company's market position. With China remaining a robust customer base, the company is setting sights on a balanced revenue profile, sustaining the drive to diversify geographically.
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Ladies and gentlemen, thank you for standing by, and Welcome to Hua Hong Semiconductor Fourth Quarter 2023 Earnings Conference Call.The call is hosted by Mr. Junjun Tang, President and Executive Director and Mr. Daniel Wang, Executive Vice President and Chief Financial Officer.[Operator Instructions] The earnings press release and fourth quarter 2023 summary slides are available to download at our company's website, www. huahonggrace.com.Without further ado, I would like to introduce you to Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Thank you. Please go ahead.
Good afternoon, everyone, and thank you all for joining our fourth quarter 2023 earnings conference. Today, we will first have Mr. Junjun Tang, our Executive Director and President, make some remarks on our fourth quarter performance. President, Tang will address in Chinese and Kathy Chien, our Deputy Director of Investor Relations will be the translator.After that, I will discuss our financial results and provide guidance for the next quarter. This will be followed by our question and answer session. The call will be conducted in English. So please ask your questions in English.I'll now turn the call over to Mr. Tang.
[Foreign Language]
[Interpreted] Good afternoon, everyone. Thank you for joining our earnings call. Hua Hong Semiconductor reported fourth quarter 2023 revenue of $455.4 million with a gross margin of 4%, in line with our guidance. For the full year, we achieved sales revenue of $2,286 million with a gross margin of 21.3%.2023 was an extremely challenging year for the global semiconductor industry due to depressed market conditions. However, with the continued destocking in the industrial supply chain and rapid growth of new-generation communications, IoT, and other technologies, the semiconductor market has recently shown signs of recovery.The company's image sensors, power management ICs and other related products all performed better in the fourth quarter. To meet medium- and long-term market demand, the company has accelerated its pace of capacity expansion and continued research and development of its diversified specialty technologies, improving its product supply capability and market responsiveness.By the end of the fourth quarter of 2023, the company's 8-inch equivalent monthly capacity increased to 391,000 wafers. Meanwhile, construction of the company's second 12-inch production line is progressing on schedule and is expected to be completed and commissioned by the end of 2024.Hua Hong Semiconductor has always prioritized technological innovation, devoting substantial resources to R&D, actively promoting new platforms, and optimizing existing platforms.In addition, the company is proactively establishing strategic cooperation with upstream and downstream companies at home and abroad to enhance industry supply chain integration and actively explore new markets.In the new year, we will keep offering better technologies and services to our customers, focusing on emerging markets such as automotive, photovoltaic, and consumer upgrades, in order to pursue sustainable development and strengthen our leading position in the field of specialty technology foundries.Now, I would like to hand the call over to our CFO, Mr. Daniel Wang, for his comments.
Thank you, Mr. Tang, for the inspiring comments.Now, let me begin with a summary of our financial performance for the fourth quarter and a recap of the whole year 2023, followed by outlook on revenue and margin for the first quarter 2024, and then we will move on to the question-and-answer session.First, let me summarize financial performance of the fourth quarter. Revenue was $455.4 million compared to $630.1 million in Q4 2022 and $568.5 million in Q3 2023, primarily due to decreased average selling price and wafer shipments.Gross margin was 4% compared to 38.2% in Q4 2022 and 16.1% in Q3 2023, primarily due to decreased average selling price and capacity utilization.Operating expenses were $95.1 million, 59.6% over Q4 2022, primarily due to decreased government grants for research and development and increased engineering wafer costs. They were 11.8% over Q3 2023, mainly due to increased labor expenses of the second 12-inch fab.Other income net was $87.6 million, 146.3% over Q4 2022, mainly due to increased government subsidies and compared to the other loss net of $19.4 million in Q3 2023, primarily due to increased government subsidies and foreign exchange gains versus foreign exchange losses in Q3 2023.Income tax expense was $7.2 million, 76.7% lower than Q4 2022 and a 44.5% lower than Q3 2023, primarily due to decreased taxable income.Profit for the period was $3.5 million compared to $185.8 million in Q4 2022 and a loss of $25.9 million in Q3 2023. Net profit attributable to shareholders of the parent company was $35.4 million compared to $159.1 million in Q4 2022 and $13.9 million in Q3 2023.Basic earnings per share was $0.021 compared to $0.122 in Q4 2022 and $0.009 in Q3 2023. Annualized ROE was 2.4% compared to 22% in Q4 2022 and 1.2% in Q3 2023.Now, I will provide more details on our revenue from Q4 2023. From geographical perspective, revenue from China was $366.5 million, contributing 80.5% of total revenue and a decrease of 19.8% compared to Q4 2022, mainly due to decreased demand for MCU, smart card ICs, super junction and NOR flash products, partially offset by increased demand for IGBT and CIS products.Revenue from North America was $36.8 million, a decrease of 57.2% compared to Q4 2022, mainly due to decreased demand for MCU and other power management IC products.Revenue from Asia was $30.2 million, a decrease of 28.2% compared to Q4 2022, mainly due to decreased demand for MCU products. Revenue from Europe was $18.5 million, a decrease of 45.2% compared to Q4 2022, mainly due to decreased demand for smart card ICs.Revenue from Japan was $3.4 million, a decrease of 70.6% compared to Q4 2022, primarily due to decreased demand for MCU products.With respect to technology platforms, revenue from embedded non-volatile memory was $112 million, a decrease of 52.6% compared to Q4 2022, mainly due to decreased demand for MCU and smart card ICs.Revenue from standalone non-volatile memory was $14.8 million, a decrease of 59.6% compared to Q4 2022, primarily due to decreased demand for NOR flash products.Revenue from discrete was $182.4 million, a decrease of 14.4% compared to Q4 2022, mainly due to decreased demand for general MOSFET and super junction products, partially offset by increased demand for IGBT products.Revenue from logic & RF was $56.2 million, a increase of 30.9% over Q4 2022, mainly due to decreased demand for CIS products. Revenue from analog and power management IC was $89.4 million, a decrease of 11.4% compared to Q4 2022, mainly due to decreased demand for other power management IC and analog products.Let's now take a look at the cash flow statement. Net cash flows generated from operating activities was $196.5 million in Q4 2023, 6.6% over Q4 2022, and 29.2% over Q4 2023, primarily due to increased government subsidies and decreased payment for labor.Capital expenditures were $331.4 million in Q4 2023. Other cash flow generated from investing activities was $29.5 million in Q4 2023, including $17.8 million interest income and $11.7 million in receipts from government grants for equipment.Net cash flow generated from financing activities was $642.3 million, including $491.7 million capital contribution from non-controlling interests; $246.6 million proceeds from bank borrowings; $3 million proceeds from government grants for finance costs; and $1.4 million proceeds from share option exercise, partially offset by $54.9 million bank principal repayments, $45.2 million interest payments, and $300,000 lease payments.Now, let's move to the balance sheet. Cash and cash equivalents was $5,585.2 million on December 31, 2023, compared to $4,989.5 million on September 30, 2023.Inventory decreased from $492.8 million on September 30, 2023, to $449.7 million on December 31, 2023, primarily due to decreased raw materials and finished goods. Property, plants and equipment was $3,519.3 million on December 31, 2023, compared to $3,322.9 million on September 30, 2023.Equity instruments designed at fair value through other comprehensive income increased from $153 million on September 30, 2023, to $270.5 million on December 31th, due to increased fair market value of equity instruments.Other non-current assets increased from $325.8 million on September 30, 2023, to $445 million on December 31, 2023, primarily due to advanced prepayments for construction and the equipment for the second 12-inch fab.Total assets increased from $9,974.3 million on September 30, 2023, to $10,943.4 million on December 31, 2023. Our total bank borrowings increased to $2,099.6 million on December 31, 2023, from $1.926 billion on September 30, 2023.Total liabilities increased to $2,928.9 million on December 31, 2023, from $2,642.1 million on September 30, 2023, primarily due to increased debt borrowings. Debt ratio increased 26.8% on December 31, from 26.5% on September 30, 2023.Now, I would like to give you a recap of our financial performance for the entire year of 2023. Revenue was $2,286.1 million, 7.7% lower than the prior year, primarily due to decreased average selling price.Gross margin was 21.3%, 12.8 percentage points lower than 2022, mainly due to decreased average selling price and increased depreciation costs, partially offset by decreased labor costs.Operating expenses were $333.1 million, 19.3% over 2022, largely due to decreased government grants for research and development and increased engineering wafer costs.Other income net was $19.5 million, versus other loss net $68.5 million in 2022, primarily due to decreased foreign exchange losses, increased government subsidies and interest income, partially offset by increased finance costs.Net profit was $126.4 million, compared to $406.6 million in 2022. Net profit attributable to shareholders of the parent company was $280 million, compared to $449.9 million in 2022. Basic earnings per share was $0.189, compared to $0.345 in 2022. ROE was 6.3%, compared to 15.2% in 2022.Finally, let me give you a high level outlook for the first quarter 2024. We expect revenue to be Approximately $450 million to $500 million and our gross margin to be in the range of 3% to 6%.This concludes my financial remarks. Now, we would like to start the question and answer session. Operator, please assist. Thank you.
[Operator Instructions] First question comes from the line of Randy Abrams from UBS.
My first question, I wanted to ask on the outlook for the first quarter, if you could start with a view. It looks like you're guiding stabilization or a bit of improvement at the midpoint. Could you talk about the mixed shipment versus pricing?And I also want to ask on pricing after the sharp decline on second half, how do you see that ability to become more stable or if you're continuing to see more pricing pressure in the market?
Randy, thank you for your excellent question. I think if you look at our guidance, pretty much our revenue and margin, I think, it is flat to -- it's pretty much flat to Q4 2023. I think our overall utilization rate has been improving, okay? I think just overall bookings has been getting stronger during the past 2 months, okay, particularly in the fields of CIS and power management IC, okay. So we see pretty strong demand for these 2 areas.I think there's still some weakness in the area of power discrete, especially IGBT and super junction. But, certainly, management is not worried about this, because we think power management -- for power discrete things will -- we expect things will recover after the Chinese New Year. Things will -- basically, demand will get back to the normal mode after the New Year.And, I think, the only thing that is still weak at this point is MCU. MCU is still weak, okay? I expect things will gradually improve. I think, Q1 it will still be low demand for MCU, but hopefully it will improve in the second quarter. We expect there will be a full recovery in the second half of this year, okay.So, I think pricing and -- is getting -- basically has been stabilized, okay? I mean, I think, Q4 is the -- basically the -- it's the lowest point, okay. It's a low note. Q1 overall, there's an improvement on utilization rate and also on bookings. I think this will support our revenue for Q1 as well as for Q2, okay?Right now the 3-inch fabs utilization rate is right between 85% to 90% and for the 12-inch fab, we have 95,000 wafer capacity. Right now the loading is above 80%. I mean -- I'm sorry, above 80,000 wafers. So, I think this is -- it's a good improvement compared to, I would say, a quarter ago. Okay, Randy?
Okay. No, it's encouraging. I think, seeing some improvement. I'm curious on the loading, where you have capacity for 95,000 based on your discussion on application, how do you see, I guess, by mid-year at this stage for both the 8-inch and 12-inch? And if you could give a view too, if you get full at this current mix and pricing, where the gross margins may fall out as you start to fill up? And do you need either a change in pricing or mix to drive further improvement on the margin?
Our goal is to get the loading to 95%, 100%, for the 12-inch fab. In other words, we expect where the capacity loading would get to close to 95,000 by -- that's the goal, to get to mid of this year, by end of June. That's the goal. And I think most likely, we have a very good chance to achieve that, because right now the bookings for certain segments are strong. We also expect IGBT and super junction will also recover in the second quarter. We expect MCU will also gradually recover. So that is the plan at that point.Once we get to at 95% to 100% utilization rate for the 12-inch fab, and then I think we can start to improve just the pricing for different technology platforms. We also would do that for the 8-inch business as well. And then we're going to see a gradually improvement on gross margin.
Okay. So margin -- I guess, just a final. So margin may say -- given you have the depreciation ramp, I guess 2 parts to it. So we should think it stays in the single-digit just given the depreciation ramp.And the second part, I just want to see if any change to the CapEx plan. I think you were targeting a heavy construction year, so about $2 billion for the 12-inch fab, and I think relatively like $50 million, $100 million for 8-inch. Just want to see if that plan has changed as well or that's still on track?
Right. Let me just talk about depreciation. I think the depreciation expense for 2023, the 3-inch fab is right around $130 million and for the 12-inch fab was $380 million. Depreciation expenses for the 12-inch fab will continue to be around $120 million to $130 million this year. It's going to be, very stable. It's going to be kept at that rate.And for the 12-inch fab, the depreciation will be around $450 million. $450 million total, okay? So, once we get to 95,000, then depreciation will start. The entire asset will start to appreciate, okay? And then, so that's going to be the case.So for the CapEx, it's minimum for the 3-inch fab, right, around $50 million to $100 million. It's major -- it's mostly, operation efficiency and just improvement on the tools, that sort of thing. We're going to take out some aging tools, replace with some, either new or refurbished 8-inch tools. That's things we would do.But for the 12-inch fab, the 95,000 -- for the first 12-inch fab, it's fully furnished. In other words, we got 95,000 wafer capacity. There's going to be very little capital expenditures for the first 12-inch fab.For the second 12-inch fab, we started construction in June last year. The construction will complete -- building will be complete, facility will be complete sometime in Q3 this year. So the construction and facility cost is going to be right around $700 million to $800 million and then it's going to be close to $6 billion on the equipment, okay? On the equipment cost.So I think, basically, last year and this year, it would be mostly construction costs, $600 million, $700 million and it will start moving the equipment. So I would say the equipment would be right around, $1 billion to $2 billion, I would say around $2 billion a year, starting 2024, 2025 and 2026.So in the next 3 years, each year, right, on a cash flow basis, okay, $2 billion a year for the next 3 years. That's going to be around $6 billion and then plus the construction cost, right; $700 million to $800 million.
And if I could just clarify the margin. Do you think if you get near full -- what you mentioned, if you achieve that gross margin, you'll start to see improvement back, I don't know, say toward double-digits or it's still just a challenge in this given environment and not to get ahead of ourselves yet?
Yes, certainly that's the plan. I mean, once we, first -- I mean, as I mentioned, the first thing we're going to get, both the 8-inch facility, 3-inch facilities and the 12-inch facility to get it above 95% utilization rate. And once we're at that rate, once we're at that level, I think, we should be able to start improve price.So when the fab is fully loaded, so, I think -- and with some ASP improvement, I think, we can easily get it to, overall. For the 12-inch fab it should be at least at 20%. The 8-inch business should get to 40% plus to 45%. But once we get -- it's -- I would say, the goal is to get to its most desirable state, which is, for the 3-inch fabs to eventually get to 45% to 50% gross margin, like we had in 2022. And also for the 12-inch fab, once we're fully loaded 95,000, and I think gross margin should get to close to 30% when the depreciation expense is still at its peak.
Our next question comes from the line of Leping Huang from Huatai Securities.
So first, just follow Randy's question before. So what's the CapEx number this year, and what's the new capacity you were introduced this year, or you will roughly stay at the current level for the whole year? I just -- maybe, I lost the number.
Yes, Randy, the CapEx, as I said, for the 12-inch to 3-inch fabs is right around $50 million to -- somewhere $50 million to $100 million. For the 12-inch fab, the new fab, the second 12-inch fab, I think on cash flow basis it's going to be -- we're going to complete the construction. That would be $600 million to $700 million. So the remaining costs would be around, $400 million to $500 million. We already paid some in the prior year. And then we are also going to spend, I think, I would say close to $1.5 billion to $2 billion on the CapEx, the tools for the second fab.And then I will let Mr. Tang talk about your second question.
[Foreign Language]
[Interpreted] Thank you for your question. The second 12-inch fab of our Wuxi plant is accelerating its construction schedule. Now we are targeting to moving to -- by the end of Q3 or the beginning of Q4 and spend 2 or 3 months to get the all line progressed. Maybe we can contribute 10,000 to 20,000 wafer capacity by the end of this year.We are using the first 12-inch line to hide around some products and aiming to have some quick product introduction when the second 12-inch line completes its tools moving. And all the related work is undergoing on schedule.
So, the second question is regarding this ASP trend. So in my model, it shows that when you are in 2020 your ASP is roughly 423 which was roughly 10% below the current -- the fourth quarter level. Do you think we have a chance to touch this number in the rest of this 2024? Or you think we are already the ASP -- the blended ASP already at the bottom?
Leping, here's what I would think, okay? we believe we hit the bottom -- I mean, we hit the bottom in Q4, okay? Things have stabilized over the past, I would say, 2 months, okay? We see -- I mean, as I said earlier, pretty strong bookings for some segments, okay? For some segments, power management IC and CIS, largely attributable to the recovery of the smartphone market and also the strong demand for the AI market. And we think pricing basically become stabilized in Q1. I mean, as you can see our revenue guidance. Okay?Now in order to improve -- to increase ASP, what we need, we need to get all the fabs fully loaded or at least at 90% utilization rate or above. So this is what we're basically working on at this point.I mean, we're getting very close to that. As I said, the 8-inch fabs are at 85% to 90% at this point on loading and the 12-inch fab is basically more than 80% in wafer input at this point, when you look at 95,000 wafer capacity. So we're moving pretty fast. Within the past 2 months things have moved pretty fast.What we need is to get the product mix to get them better and also at the same time get the rate up to 90% to 95% at that point. And I think we have a very good chance to increase ASP for some of these products.I think, we have a good chance that all segments will recover in the second half. This is what we planned on. This is something we believe things will happen in 2024. We do have strong booking to support at least for Q1 and Q2 right now, okay? So let's keep our fingers crossed.
Last question from me is that, we noticed your parent company, Hua Hong Group announced their plan to invest on this new fab in Chengdu. So what will be the relation between this Chengdu fab with the [ Hua Hong Wuxi ]?If I remember correctly that when you do the Asia IPO, you have some non-compete agreement with the Huali. So what will be the non-compete agreement with this new company and with Hua Hong Wuxi?
What we can -- what we know -- what we can confirm is that our sister company Huali did acquire the facility in Chengdu just a few months ago. So Huali is -- basically, they are focusing on advanced technology nodes. So their strategy is different from us. We are a special technology provider. We are a semiconductor foundry focusing on specialty technology. Huali is focusing on advanced technology nodes, like 28-nanometer, okay? So our customers' products are different.But during the IPO -- the Asia IPO, we did make a commitment that we are going to basically -- that we will take over, consolidate one of their fabs, its Fab 5, considering that is -- has -- it's got a similar business, all competing business. So that is a -- that was a commitment we made. We would do that within the within 3 years, that's the commitment we had. Yes.
Our next question comes from the line of [ Ziyi Wang ] from CITIC Securities.
My first question is, as we are constructing the Wuxi second fab, Fab 9, how will you allocate the capacity of the platform on the second fab?
[Foreign Language]
[Interpreted] So the capacity plan for the Fab 9 is 83,000 per month, focusing on 55-nanometer, 40-nanometer, and power discrete. Basically, we will allocate about 20,000 capacity to power discrete and the rest will be IC. The overall capacity will be based on the Hua Hong Grace specialty technology platforms, logic, power measurement, and some flash.We will have 40,000 wafer per month capacity after the Phase 1 investment. We are moving on schedule and expecting to have 10,000 capacity to 20,000 capacity by the end of this year. The Phase 1 40,000 wafer per month capacity will be completed by the end of Q3 next year.
My second question is, I just want to make sure that will the utilization rate contribute to the gross margin on the Q1 2024, or it will be the price or the product mix? Or what will be the utilization rate like in Q1?
I think, I talked about the utilization rate -- the current utilization rate earlier. I think right now it is -- right now around -- we're already at 85% to 90%, for the 8-inch, and 12% we are just getting 90% to 95% already, okay? So that is -- we certainly have had a pretty major improvement on utilization rates, largely because of strong bookings in the last 2 months.
And could you give us some guidance or a view on the 2024 whole year revenue and gross margin? Could you share with us what you see on the 2024, based on current demand and order?
Well, as you know, I think it's going to be a good year. We're going to start low, Q1. But things have stabilized already. I think we're going to have a low Q1 and then we're going to have improved Q2. And then we'll surely look forward to a second half that it's going to be fully recovered. So we will have a 2024 that's going to be stronger than last year. We will have a better 2024 than 2023.
Our next question comes from Szeho Ng from China Renaissance. Please ask your question.
I have a question regarding the Q4 gross margin. Could you quantify the impact coming from the inventory write-off? I remember last time you mentioned there will be a 3 percentage impact to the gross margin for Q4, but I'm not sure. I just want to verify with you.
Yes, it was around the 3.9 percentage points if you look at quarter-versus -- quarter-to-quarter, quarter over Q3 from Q4. From Q3 to Q4, 10 percentage points is due to ASP drop and 3.9 percentage points came from the inventory provision. It's not written off. Nothing got written off, okay? It's -- Szeho, nothing got written off. It is basically a provision we took.
I see. And then the Q1 guidance is on a clean basis. There is no more one-off items, right?
No, no. At this point, no.
So that means from margin standpoint...
Nothing, nothing...
I'm sorry, go ahead.
What I said, to answer your prior question, nothing is significant enough to consider to be a major one-time, one-off.
So basically, on clean basis, the margin should keep the bottom this quarter, right? And then the margin starts to recover from Q2 onwards, is that correct statement?
Right. We are at -- the ASP is still at the same level as Q4. It's going to be pretty much at the same level. I don't think -- and hopefully, things will improve slightly. I mean, President Tang and the team are driving very hard. Bookings are getting better. So hopefully, we'll have more room to negotiate on pricing, okay? That is the key.So --yes, I mean, hopefully, from this point out, the pricing will get better and better. But Q1 is -- things are becoming very calm now, like the second half last year.
I see. Got you. Yes. Second question regarding government subsidies. We booked a pretty lumpy subsidy in Q4, so how should we expect it going forward into 2024?
Are you talking about subsidies?
Yes, the government subsidies. You booked $51 million in Q4 last year. So how should we expect the subsidy going forward?
Yes, I think it's going to be based on the commitment that we got from the government. For the first fab, there's still a couple more years to go. I think 2 more, this year and next year. We're still going to have some government subsidies that we're entitled to based on the contract that we had with the local government.
Okay. All right. But any particular ballpark number that you can share with us on the line?
Any what?
Any ballpark number that you can share, the residual subsidy that we can plan.
You know, that's -- no, it's -- I would not share -- I never share that number with anyone. I would prefer to keep that in my chest. No. Good try, though.
The next question come from the line of [ Qingyuan Ling ] from Bernstein.
I have 3 questions. First one is around our Q4 revenue. We saw that the revenue from China continued to grow in share. Last year in fourth quarter it was 72.6%. Previous quarter it was 77.5% and this quarter we grow it up to 80.5%. I want to understand what's the driver behind? Or in your view, is it temporary or will be the long-term trend?
You know what, I mean, just overall China has been -- we have strong customer base in China. I think, overall, in Q4, other regions have come down compared to Q3 last year as well as Q4 a year before. Okay? But, overall, the China business also came. Overall, our revenue was $455 million. But out of that China was particularly large. It was 80.5%. Other regions were a little basically slightly than the prior quarters. So it was -- just for that reason they were up above 80%.But I would not read too much into it. I would not read too much into it because, we would like to have a balanced revenue profile amongst different regions. We would like to keep China at -- around 70%. We would continue to have other regions right around 30%. That is the goal.We want to maintain that level. We want to continue to acquire, to continue to work with these big IDMs, design houses abroad. I think, they are great customers globally. We want to continue to attract them. We want to continue to acquire new customers. So I mean, it's just a snapshot of the time. So don't read too much into it.
Very clear. The second question around your comment on the recovery in second half 2024, in my kind of view, there's 2 factors for the low demand, one is to China de-stocking introduced by COVID. The second is just the macro cycle.Which one do you think has a stronger play in the second half that increase the demand? And if you factor in all the competition there, we have the, kind of, expectation that ASP will continue to get better. But at the same time, probably more capacity will be released in 2024 and 2025. How do you think all these factors plays out?
Well, so you're basically talking about competitors. Is that your question?
Yes. I guess, from the demand side -- the demand side is first around de-stocking and semi-cycle, specifically China semi-cycle, which one is stronger in 2024 second half in terms of picking up?
Well, I mean, we see a second -- from all the data, from all the analysis we see at this point, we believe that things will get better, especially in the second half. We have some good, strong booking numbers to support that, even right now. We see, as I said, the loadings are up. Loadings have improved quite a bit compared to a quarter ago for us, not for both, 8-inch and 12-inch business, okay?But you have to remember, Hua Hong Semiconductor is one of the kind. We are a semiconductor foundry focused on specialty technology. Over the past 20 plus years we have developed 5 different technology platforms. These are very, very strong technology platforms in great demand. We certainly are a leader in every segment. So we're continuing to focus on technology. We continue to be the best in each segment.Yes, there are a lot of capacity that has been built in the past several years. But you know what, I would say they're at very early stage. Nothing at our level. So we're not concerned. We're not worried. We are still absolutely the best in China and globally as far as -- with that regard.
Very clear. I guess, the last question is around the new 12-inch fab. We mentioned that we have are accelerating in terms of the kind of setting up the facility and moving the equipment and we will have 40,000 as third quarter 2025. I was just wondering, do we have any customers log into that capacity? What will be the impact of that new fab kind of capacity to the current fab's utilization?
Well, the ramp -- we expect that 83,000 wafer capacity will be gradually filled. The ramping process will be within 2 to 3 years. We're going to start to do that -- start the ramp process in the end of this year. It will take 2025, 2026, 2027 to get to 83,000 wafer.All the existing technology platforms will be migrated to that fab. We'll continue to work with major customers globally. Some of the major IDMs, they are currently are customers as well. We will, basically, create an even bigger partnership with all of them. So we expect, not just the Chinese customers, but the globally, yes, we'll continue to work with the major IDMs and design houses.
That's all the time for questions. I'd like to hand the call back to management for closing.
Again, thank you all for joining us today and asking all the great questions. We hope you will join us again next quarter. Please do stay healthy -- safe and healthy. We're looking forward to meeting you in-person very soon and much joy to you all in the Year of the Dragon. Thank you.
Ladies and gentlemen, thank you for your attendance. You may now disconnect.