Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest integrated circuit packaging and testing firm, expects slightly higher revenues in the third quarter, despite weaker market momentum.
“It will take two to three months for foundry customers to digest excessive inventory, causing third-quarter demand to be below usual seasonal levels,” chief financial officer Joseph Tung (董宏思) told an investors’ conference yesterday.
Tung’s views were in tune with Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, which last week posted its lowest quarterly net profits in five quarters, saying it expected sales and profitability to weaken further this quarter as customers reduce orders to digest inventory.
Despite that, ASE forecast revenues would rise between 3 percent and 6 percent in the third quarter from the second, thanks to gains in market share as it switches to copper wirebonding technology.
The company posted revenues of NT$32.26 billion (US$1.1 billion) in the second quarter, up 4 percent quarter-on-quarter.
Second-quarter earnings fell 8 percent to NT$3.64 billion, or earnings of NT$0.6 per share. Gross margins edged up to 23.4 percent from 23 percent in the first quarter.
The chip tester said revenue contributed by copper wirebonding rose 38 percent in the second quarter from the earlier three months. Those revenues would increase by 20 percent in the third quarter, it said.
ASE forecast that revenue across most sectors would slow in the current quarter, with communications products seeing stable demand, while revenues from PC applications would decline because of sluggish demand for DRAM chips.
ASE maintained its capital expenditure at between US$750 million and US$800 million for the year, but said there was a chance of an “adjustment” depending on demand in the fourth quarter.
The company’s capital expenditure was US$154 million in the first quarter and US$295 million in the second.
ASE shares fell 3.6 percent to NT$29.2 at the close on the Taiwan Stock Exchange yesterday, before the results were announced.