Amkor forecast declines on chip-packaging sales

Amkor Technology Inc, the world's second-largest packager of semiconductors, widened its third-quarter loss forecast on weaker-than-expected sales.

Net loss is expected to be about US$0.13 per diluted share, compared with the previous estimate of US$0.07 to US$0.09, the West Chester, Pennsylvania company said in a statement distributed by Thomson Financial. Sales will fall about 3 percent from the second quarter instead of staying unchanged, as the company earlier predicted.

"The semiconductor industry is experiencing a classical correction, and it is unclear at this time when business will improve," Amkor president John Boruch said in the statement. "Our revenue shortfall in the third quarter was due to declining customer forecasts."

Amkor said it will release third-quarter financial results on Oct. 26.

Royal Philips Electronics NV, Europe's third-largest chipmaker, followed companies including Texas Instruments Inc and Intel Corp earlier last month in reducing third-quarter sales forecasts as demand waned. Chip packagers make finished products from the silicon wafers produced by chipmakers such as Intel, the world's biggest.

Even so, Amkor said last month that it plans to spend US$100 million this year to expand capacity, partly through the acquisition of more Taiwanese chip testers and packagers, following acquisition deals with Unitive Semiconductor Taiwan Corp (悠立半導體), First International Computer Testing and Assembly Technology Corp (眾晶科技) earlier this year.

The company has only captured 10 percent of the local market so far.

Amkor rivals include Advanced Semiconductor Engineering Inc (日月光), the world's largest chip packager in Taiwan, and other Asian companies such as STATS ChipPAC Ltd in Singapore.

Advanced Semiconductor said there's no change in its forecast for third-quarter sales to rise by as much as 9 percent from the second quarter. Profit margins will remain unchanged during the period, the company said.

"We're on track," said Freddie Liu, an Advanced Semiconductor spokesman.

Advanced Semiconductor chief financial officer Joseph Tung (董宏思) told an investor conference in August that the company's revenues will increase further by a high single digit percent in the third quarter primarily boosted by rising demand mostly from the computer industry.

The Kaohsiung, Taiwan-based company expected its revenue to shoot up to NT$75 billion this year based on the NT$50 billion the company posted last year, Tung said at the time.

Additional reporting by Lisa Wang