Thu, Apr 26, 2012 - Page 11 News List

Siliconware to increase capex by 60% this year

DEMAND PICKUP:The chip tester and packager plans to expand capacity to meet rising orders, mainly from its customers in the communications and computing sectors

By Kevin Chen  /  Staff reporter

Chip tester and packager Siliconware Precision Industries Co (SPIL, 矽品) yesterday said it would increase capital expenditure this year by nearly 60 percent from last year to improve its production technology and meet rising demand.

Capital expenditure this year will expand to NT$17.5 billion (US$592.9 million) from NT$11 billion last year, SPIL chairman Bough Lin (林文伯) told investors. The figure is also NT$7 billion higher than the NT$10.5 billion the company projected in February.

“After hunkering down for two to three years [during the industry downturn], the company has seen a good opportunity for forging ahead [with the bigger capex plan],” local cable TV network UBN yesterday quoted Lin as saying.

The Hsinchu-based company yesterday said it foresees a mild recovery in the semiconductor industry this quarter compared with the first quarter, when SPIL posted worse-than-expected gross and operating margins because of soaring operating costs.

SPIL’s first-quarter gross margin of 14.7 percent was down from 16.0 percent in the previous quarter and 15.2 percent a year earlier. It was also lower than the 15.1 percent forecast by Credit Suisse.

Its operating margin was 6.9 percent in the first three months of the year, down from 8.5 percent in the previous three months and 8.2 percent the year before. It also lagged Credit Suisse’s forecast of 7.3 percent.

For the second quarter, Lin said he expected a gross margin of between 16 percent and 18 percent and an operating margin of between 9 percent and 11 percent.

Revenue during the quarter is forecast to increase sequentially by between 7 percent and 11 percent, he added.

Lin attributed his optimism to continued rising demand from customers in the communications and computing sectors, while demand in the consumer electronics sector was expected to remain lukewarm. He also said capacity utilization rates this quarter would be higher than in the first quarter.

The utilization rate would be 100 percent for wire-bonding packaging in the second quarter, Lin said, up from 95 percent in the first quarter.

Meanwhile, the utilization rate for flip-chip ball-grid-array packaging is forecast to increase to 95 percent in the second quarter from 80 percent in the first quarter, and that for IC logic testing equipment may rise to 80 percent from 75 percent the previous quarter, he said.

On a quarterly basis, SPIL’s net income fell 23.9 percent to NT$891 million in the first quarter from NT$1.17 billion in the previous quarter and was 16.7 percent lower than NT$1.07 billion a year ago. Earnings per share reached NT$0.29 in the first quarter, compared with NT$0.38 in the previous quarter and NT$0.34 a year earlier, the company said in a statement.

First-quarter revenue dropped 3.8 percent to NT$15.12 billion from NT$15.71 billion in the previous quarter, but increased 4.5 percent from NT$14.47 billion a year earlier. Operating expenses increased 1.1 percent to NT$1.19 billion from NT$1.18 billion in the previous quarter and 16.9 percent from NT$1.02 billion the year before.

On Monday, Powertech Technology Inc (力成), which also provides packaging and testing services for memory chipmakers, reported a net income of NT$1.134 billion, or earnings per share of NT$1.42, in the first three months of the year. That compares with a net loss of NT$307 million, or a loss per share of NT$0.38 per share, in the previous quarter. However, it was still 32.01 percent less than a net income of NT$1.67 billion, or NT$2.3 per share, a year earlier.

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