Tue, Jun 18, 2013 - Page 14 News List

Kinsus says capital expenditure set

By Kevin Chen  /  Staff reporter

Capital expenditure at Kinsus Interconnect Technology Corp (景碩科技) is likely to reach a record NT$6 billion (US$200.2 million) next year as a result of customers’ technology migration, the silicon substrate maker said yesterday.

The proposed capital spending compares with between NT$4.5 billion and NT$5 billion the company has budgeted for this year, which will be used to build new operation lines in Hsinchu County and invest in advanced integrated circuit substrates, Kinsus said.

“The semiconductor industry as a whole is expected to move ahead at a steady pace this year,” local cable TV network UBN yesterday quoted Kinsus chairman Tung Tsu-hsien (童子賢) as saying. “As our customers migrate to more advanced process technologies, we need to follow suit.”

Tung was speaking on the sidelines of the company’s annual general meeting in Taoyuan County, where it told shareholders that spending for this year includes investments in advanced substrates supporting 20 nanometer and 16 nanometer process technologies.

Kinsus competes with Unimicron Technology Corp (欣興電子) and Nan Ya Printed Circuit Board Corp (南亞電路板) in Taiwan as well as Shinko Electric Industries Co, Ibiden Co and Semco Machine Corp of Japan.

The company’s substrate products are mainly applied in communications devices at a time when demand for application processor, baseband, radio frequency and wireless networking chips is being boosted by the increasing popularity of smartphones and tablets.

The company counts Mediatek Inc (聯發科) and Qualcomm Inc among its major customers and is expected to get orders from Apple Inc in the second half of the year.

Revenue is likely to grow more strongly in the second half of the year thanks to demand for low to mid-end smartphones and tablets in China, online news outlet MoneyDJ.com quoted company president Chang Chien-wei (張謙為) as saying.

Kinsus reported record revenue of NT$17.65 billion last year, up 4.63 percent from 2011. In the first five months of this year, its accumulated revenue increased 3.38 percent to NT$9.35 billion from the same period last year.

Shareholders approved the company’s plan to distribute a cash dividend of NT$3 per share, based on last year’s earnings of NT$2.797 billion, or NT$6.27 per share, according to a company filing to the Taiwan Stock Exchange yesterday.

In its latest research note issued on Friday, Barclays Capital Inc predicted Kinsus would see revenue grow at an annual composite growth rate of more than 10 percent from this year through 2015 because of steady orders from MediaTek and Apple, plus lower costs caused by falling gold prices.

The company is expected to make earnings per share of NT$8.06 this year, Barclays Capital analyst Andrew Lu (陸行之) forecast, who retained his “overweight” rating on Kinsus’ shares, but raised the target price to NT$150 from NT$106.

Kinsus shares rose by the daily limit to NT$116.5 yesterday. The shares have risen by 27.88 percent so far this year.

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