Solid demand for mobile devices is expected to help integrated circuit (IC) packaging and testing services providers offset the impact of the slow season in the first quarter of this year, market analysts said on Saturday.
IC packaging and testing services providers for specialty DRAMs in particular are expected to see relatively stable demand, as interest in smartphones and tablets that use the chips remains strong during the current quarter, they said.
Growing shipments of chips for mobile devices and wireless communications, in particular in the huge Chinese market and other emerging markets, are boosting demand for flip-chip and bumping services from these IC packaging and testing firms, the analysts said.
Under such favorable circumstances, these firms are expected to see their production capacities stay at relatively high levels during the current quarter, they said.
Bough Lin (林文伯), chairman of Siliconware Precision Industries Co (SPIL, 矽品), has said that demand for high-end IC packaging and testing services for the first quarter appear better than in the same period of last year.
In addition to the launch of new mobile devices, Lin said, the global IC packaging and testing business did well in inventory control in the fourth quarter of last year, a move that alleviated pressure from the slow first quarter.
Analysts said with the slow-season effects fading to some extent, Siliconware is expected to see its consolidated sales for the January-to-March period fall only 4 percent to 8 percent from a quarter earlier.
They said Siliconware’s gross margin for the period could stand at more than 20 percent compared with the previous 22.9 percent last quarter, while its operating margin is likely to hit 11 percent, showing signs of stability, although the figure will still fall below the 14 percent registered in the previous quarter.
Analysts said Advanced Semiconductor Engineering Inc (ASE, 日月光), the world’s largest IC packaging and testing services provider, could see its gross margin for the first quarter hovering about 18 percent, slightly lower than the fourth quarter’s 19.5 percent.
Due to a partial shutdown at ASE’s K7 plant in Greater Kaohsiung, sales from its IC packaging and testing operations could fall 12 percent to 15 percent sequentially in the first quarter, they said.
The analysts said that Walton Advanced Engineering Inc (華東) and Powertech Technology Inc (力成), two major packaging and testing services providers for specialty DRAMs, could see their consolidated sales fall at single-digit percentages in the first quarter of the year.