Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packaging and testing company, is planning to expand capital investment in the second half of this year to prepare for an economic recovery, the Chinese-language Economic Daily News reported yesterday.
The newspaper said ASE recently received an influx of orders, thanks to a rebound in the global semiconductor industry, citing company chairman Jason Chang (張虔生).
Considering that the company’s plant in Kaohsiung is running at nearly full capacity, ASE will need to expand its investment to meet the expected increase in demand, Chang said in the report.
Global semiconductor sales are likely to drop less than previously estimated. Sales are falling 22 percent this year as the economic slowdown hurts demand for chips, global market research firm Gartner said on Thursday. On Feb. 25, the global market research firm had predicted a 24 percent decline this year.
Total semiconductor sales will decline to US$198 billion, Gartner said in a statement.
“First-quarter PC shipments came in better than expected, which led to an improved outlook for microprocessors,” Gartner’s research vice president Bryan Lewis said in the statement. “Most of this improvement was due to the fact that inventories had been run down too far, rather than true demand returning.”
Chip sales in the current quarter are forecast to rise 4.9 percent, Gartner said.
Backed by improved market demand, North American orders for chip equipment climbed about 3 percent to US$253 million last month from March, the trade group Semiconductor Equipment & Materials International said in a statement on May 21. Orders last month were still 77 percent lower from US$1.09 billion a year earlier, however.
With consumer demand for electronics goods stalled amid the global financial crisis, ASE’s operations were in their worst shape last December, Chang told the Economic Daily News. Orders began to pick up in the first two months of this year and the company returned to the black in March, he said.
The worldwide economic downturn has forced many integrated device manufacturers (IDMs) — including Intel Corp of the US, NXP Semiconductors of the Netherlands as well as Japan’s Toshiba Corp and Renesas Technology Corp — to shut down their own production lines and outsource to Taiwan’s packaging and testing companies.
ASE’s sales growth this year will primarily come from these IDM orders, the newspaper said, citing an unidentified analyst.
Meanwhile, the world’s two largest contract chipmakers — Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電) — are expected to see their 12-inch chip plants run at full capacity next month and in July, the Chinese-language Commercial Times reported yesterday, without citing sources.
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