Thu, Oct 31, 2013 - Page 13 News List

ASE forecasts weakness after strong Q3

GROWTH TRENDS:The chip packager expects inventory adjustment to affect its core business sales, but its EMS division should get a lift from Apple-related orders

By Helen Ku  /  Staff reporter

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packaging and testing services provider, yesterday said that profit grew last quarter, aided by growing orders for fingerprint sensor modules used in Apple Inc’s iPhone 5S.

Net profit grew 16 percent quarter-on-quarter and 28 percent year-on-year to NT$4.43 billion (US$150.7 million), or earnings per share of NT$0.57.

The results missed consensus estimates of a net profit of NT$4.58 billion or NT$0.6 per share.

Supported by robust demand for consumer electronics during the peak season, ASE saw its third-quarter consolidated revenue reach a record-high of NT$56.74 billion, chief financial officer Joseph Tung (董宏思) told an investors’ conference.

For this quarter, ASE forecast that core business sales would slide by 3 percent at most from NT$37.81 billion last quarter because of customers’ inventory adjustments, Tung said.

However, the company’s electronic manufacturing service (EMS) business is likely to see sales expand by up to 25 percent from NT$19.55 billion last quarter, boosted by increasing orders for WiFi and fingerprint sensor modules from Apple, Tung added.

“ASE is prepared and poised to hold a significant share in the mobile device market,” Tung said.

He told investors that the PC market was trending toward miniaturization, with the launch of new mobile devices like smartphones, tablets, smartwatches and even smartglasses.

To provide faster but smaller processors for handheld or wearable device vendors, ASE has placed more focus on outsourced semiconductor assembly and test (OSAT) and system-in-package (SiP) services, Tung said.

“With in-depth know-how and experience, ASE already holds a unique position in the OSAT and SiP markets, and will continue searching for new sales sources in the mobile device market,” Tung said.

For this quarter, ASE forecast that SiP service sales would grow and account for up to 10 percent of the company’s total sales, up from a small percentage during the past quarter.

However, fourth-quarter gross margin could dip to between 18 percent and 19 percent from 20.4 percent last quarter because of rising shipments of low-margin WiFi modules, Tung said.

Asked if ASE has begun supplying processors for 3D printer makers, Tung said: “The company will observe the 3D printer market first before making a decision on whether to increase investments in developing new SiP-related technologies.”

He said the company’s capital expenditure would not exceed US$700 million this year.

ASE’s shares closed up 1.03 percent at NT$29.50 yesterday, outperforming the benchmark TAIEX, which gained 0.52 percent.

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