Chip packager expects increased sales to Motorola

Advanced Semiconductor Engineering Inc (日月光半導體), the world's second-largest chip packager, said it expects more orders from Motorola Inc, its largest customer, as the No. 2 mobile phone maker farms out production to cut costs.

Advanced Semiconductor shares rose as much as 5.1 percent on the news. The shares have risen all week.

"Motorola will have a big impact on our sales," said Advanced Semiconductor spokesman Freddie Liu (劉英武), in an interview. He declined to confirm a Chinese-language newspaper report that said the company's fourth-quarter sales will exceed the NT$6.4 billion (US$183 million) reported in the third quarter.

Motorola may be increasing orders with Advanced Semiconductor as the company scales back chip-packaging operations in the US, Japan and Hong Kong, said Motorola spokesman Scott Stevens.

Advanced Semiconductor is relying on further orders from brand-name chip users like Motorola in the fourth-quarter as orders from suppliers of made-to-order chips such as Taiwan Semiconductor Manufacturing Co (台積電) decline.

Advanced Semiconductor packages some of Motorola's most advanced chips in two factories bought in 1999 from the US company, Liu said. One plant is in Taiwan and the other in South Korea.

The company didn't comment on the newspaper's claim that it will increase capital spending on expansion from US$280 million to cater for expected new orders.

Chip packagers cut chips from silicon wafers, attach electrical wiring to the silicon and package the assembly in insulating plastic.