Siliconware Precision Industries Co (SPIL, 矽品), the nation’s second-largest chip packager and tester, yesterday said earnings plunged 37 percent as appreciating local currency and rising key raw material prices eroded margins, but the company offered a better outlook for the current quarter than its peers.
The growth would be primarily supported by demand in emerging markets, company chairman Lin Wen-po (林文伯) told investors. However, Lin worried that persistent global economic weakness could hurt consumer purchasing power in developing countries later in the year.
Net income fell 37 percent to NT$2.41 billion (US$78 million) in the April-June quarter, compared with NT$3.83 billion in the same period last year, a company statement said.
Operating margin shrank to 15 percent last quarter from 25.2 percent a year earlier, primarily because of the appreciating New Taiwan dollar versus the greenback and rising gold prices, the company said.
The local currency has risen 6.4 percent since the beginning of the year.
Looking ahead, Lin said: “There will be mild seasonal growth in the third quarter ... We do not see any drastic decline in demand for PCs and handsets [as some thought].”
“Customers will keep their inventory at normal levels,” Lin said.
The visibility for the fourth quarter was vague, but revenues would be flat on quarterly basis, Lin said.
Revenue may grow by 4 percent to 7 percent this quarter, offsetting a 1 percent to 2 percent drop in average selling price, Lin said.
The projection is better than the low single-digit percent revenues growth projected by bigger rival Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) on Tuesday.
Demand from computer customers will be the strongest among its four business segments including consumer, communications and memory chips, Lin said.
SPIL’s customers include PC graphic processor maker Nvidia Inc and local mobile phone chip supplier MediaTek Inc (聯發科).
SPIL’s operating margin may rebound to the 16 percent to 18 percent range this quarter from last quarter as local currency and gold prices have recently looked stable, Lin said.
Lin’s projection is largely in line with Citigroup analyst Andrew Lu’s (陸行之) expectations. Lu projected SPIL’s operating margin to improve to around 18 percent this quarter and revenues to expand at least 5 percent quarter on quarter, a report released yesterday said.
Lu gave a “buy” rating on SPIL with a target price of NT$66, implying a 65 percent upside in the next 12 months.
To meet customer demand, SPIL plans to keep its capital spending for this year unchanged at NT$10 billion, down 12 percent from last year’s NT$11.4 billion.
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