Powertech Technology Inc (力成科技), the nation’s biggest computer memory chip packager, yesterday posted its highest quarterly earnings in five quarters, supported by rebounding demand for PC memory chips.
Betting on a spike in memory chip demand, Powertech planned to spend NT$9 billion (US$281.1 million) on new facilities and equipment this year, up nearly 29 percent from last year’s NT$7 billion. The investment would help the chip packager boost capacity by 20 percent year-on-year this year, it said.
During the quarter ending Dec. 31, Powertech’s net income rose 3.8 percent to NT$1.68 billion, from NT$1.62 billion a year ago, hitting its highest level since the third quarter of 2008. The company attributed the growth to the global economic recovery, which boosted consumer confidence and willingness to buy electronics.
Benefiting from the rebound and the stable computer memory sector, Powertech said growth momentum would extend into this quarter, and added that order visibility for next quarter was also good.
“It is going to be an exciting period. This quarter will be the best first quarter ever for us,” company chairman Tsai Tu-king (蔡篤恭) told an investor conference yesterday.
For the best-case scenario, revenue may be flat this quarter, compared with NT$8.74 billion in the fourth quarter, Tsai said.
Powertech generated less, or 77 percent, of its revenue from providing chip testing and packaging services for PC memory chipmakers, or dynamic random access memory (DRAM) makers in the fourth quarter, from 82 percent a year ago.
The company made 22 percent of its revenues from packaging or testing another type of memory chip called NAND flash memory, which is used in consumer electronics, for customers like Toshiba.
The company may retain its current factory utilization rate of 95 percent, helping it keep gross margin steady, higher than 25.5 percent, which the company hit in the third quarter of last year, Tsai said.
Powertech’s first quarter outlook slightly exceeded a projection from Credit Suisse, which expected the company to make NT$8.38 billion in revenues and to report gross margin of 25.4 percent. Credit Suisse gave an out-performing rating on Powertech with a target price of NT$129.
Powertech said it has formed a new business division to make logic chip testing and packaging services a new growth driver.
The new business may account for about 10 percent of its revenues next year, from 1 percent last quarter, Tsai said.
For the full year last year, Powertech earned NT$4.96 billion, or NT$7.4 per share, down 24.3 percent from NT$6.55 billion, or NT$9.78 a share, in net income made in 2008.
Shares of Powertech jumped 2.44 percent to NT$105 yesterday, beating the benchmark TAIEX index, which edged down 0.08 percent.
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