Wed, Aug 02, 2006 - Page 12 News List

World-beating chip tester posts record high Q2 earnings

By Lisa Wang  /  STAFF REPORTER

Advanced Semiconductor En-gineering Inc (日月光), the world's top chip testing and packaging service supplier, posted record high quarterly earnings because of its receipt of massive insurance payments and improved gross margins.

Advanced Semiconductor reported NT$7.32 billion (US$223.5 million) in net income for the second quarter, compared to a quarterly loss of NT$3.18 billion a year ago after a fire damaged one of its plants last May, according to a company statement.

The company said it booked NT$3.2 billion in non-operating income mostly from insurance company payments to cover damages from the fire.

Looking at the fundamentals, however, company chief financial officer Joseph Tung (董宏思), said "There will be sequential growth [in revenues] in the second half, but it will not be as strong as it was in the past."

Last year, Advanced Semiconductor posted a 33-percent growth in revenues for the second half when compared to the first six months of last year, Tung said.

"PC [demand] weakened at a faster pace than we expected in the second quarter. And we don't expect a strong rebound in the third quarter," Tung said.

The computer segment made up about a quarter of Advanced Semiconductor's revenues last quarter, down from 28 percent in the first quarter of this year.

To cope with slower-than-expected demand, Advanced Semiconductor said it planned to trim 12.5 percent from its capital spending for this year to US$350 million from the US$400 million it originally planned. In addition, the outlook for the consumer electronics segment is uncertain, as the company was still unsure about new orders from Microsoft Corp's Xbox game consoles, Tung said.

Microsoft ranks No. 5 among the company's top 10 customers.

Due to the gloomy outlook, Advanced Semiconductor almost halved its quarterly growth forecast for the current quarter to low-single digit percentage points in terms of revenues, instead of the double-digit figure it estimated early this year.

Local rival Siliconware Precision Industries Co (矽品) expects seasonal demand for computers to boost its revenues by only 2 percent to 5 percent quarter-on-quarter in the three-month period ending next month.

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