Thu, Jan 31, 2013 - Page 13 News List

ASE posts strong Q4 net profit

WEAKNESS AHEAD:The company expects its chip packaging and testing business to drop by 10 to 13 percent this quarter as customers adjust inventory through March

By Helen Ku  /  Staff reporter

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packager, yesterday posted its strongest quarterly profits in eight quarters, thanks to strong demand from the communications sector.

Net profit expanded 27 percent to NT$4.39 billion (US$148.5 million) last quarter, from NT$3.45 billion in the third quarter of last year. The figure represents 66 percent growth from NT$2.64 billion a year ago.

However, on a full-year basis, ASE’s net profit slid 5 percent to NT$13.09 billion, from NT$13.73 billion in 2011, because of sluggish demand amid economic uncertainties.

For this quarter, the Greater Kaohsiung-based company expects its chip packaging and testing business to decrease by 10 to 13 percent from last quarter, as some of its clients plan to reduce inventory through March, ASE chief operating officer Tien Wu (吳田玉) told an investor conference yesterday.

The forecast decline is slightly deeper than the 10 percent quarterly fall projected by Eric Chen (陳慧明), a Hong Kong-based semiconductor analyst with Daiwa Capital Markets, and sharper than the 9 percent contraction projected by Credit Suisse analyst Randy Abrams.

Factory utilization is expected to drop below 80 percent this quarter, ASE said.

However, the company expects business to rebound in March as customers start restocking inventory of chips used in mobile phones.

Given forecast improved prospects for the semiconductor industry as a whole this year, ASE sees potential growth in orders from integrated device manufacturers (IDM), after two years of disappointment.

“We are confident that our sales performance will improve this year as we continue to increase our capacity utilization rate, put more investment into research and development and cut costs,” Wu said.

ASE has budgeted about US$700 million for capital spending this year, mostly on advanced 28-nanometer packaging technology, down 30 percent from last year’s US$1 billion.

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