Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packager, yesterday reported an annual fall of 46 percent in net profits, blaming sluggish demand amid a global economic downturn.
On a quarterly basis, net profits shrank from NT$4.87 billion (US$163 million) to NT$2.64 billion in the fourth quarter of last year, a 24 percent contraction.
The weaker-than-expected financial results were attributed to sluggish customer demand, ASE chief financial officer Joseph Tung (董宏思), told an investor conference yesterday.
The first quarter of this year will remain weak because of seasonally slow demand, the Kaohsiung-based company said.
However, ASE is betting on a “strong rebound” in the second quarter, saying it expected shipments to rise 15 percent and gross margins to return to 21.3 percent, the same level as the fourth quarter last year.
On a sequential basis, shipments are expected to fall by -between -6 -percent and 9 percent in the current quarter, the company said. In addition, gross margins are expected to fall between 2.5 percentage points and 3 percentage points from last quarter’s 21.3 percent, after a 3.9 percentage point drop last quarter from the previous quarter.
Average selling prices would fall slightly, ASE said.
Sluggish demand for consumer electronics, automotive electronics and computers would offset robust demand for handset communications products, Tung said.
Communications products accounted for 56 percent of ASE’s fourth quarter revenues of NT$31.91 billion, from chip designers.
Handset chip suppliers Broadcomm In, Qualcomm Inc and Taiwan’s MStar Semiconductor Inc (晨星半導體) are among ASE’s top 10 customer.
Last year, ASE’s annual net income fell 25 percent to NT$13.73 billion. down from NT$18.34 billion in 2010, according to a financial statement from the company.
Revenues dropped 2 percent to NT$185.35 billion from NT$188.74 billion.
This year, ASE plans to spend between US$700 million and US$750 million on new equipment, about 10 percent less than the US$780 million spent last year.
About 30 percent of that expenditure will be channeled into flip chip bonding technology.
ASE’s share price closed down 2.23 percent at NT$28.5 yesterday on the Taiwan Stock Exchange, before the earning results were made public.