Wed, Mar 11, 2015 - Page 13 News List

ASE shares receive a boost from Apple Watch launch

Staff writer, with CNA

Apple Watches are displayed during an Apple Inc event in San Francisco, California, on Monday.

Photo: AFP

Advanced Semiconductor Engineering Inc shares (ASE, 日月光半導體) moved higher in Taipei trading yesterday after Apple Inc unveiled its Apple Watch overnight, dealers said.

Since ASE, the world’s largest integrated circuit (IC) packaging and testing services provider, is thought to be the sole IC packaging and testing services supplier for the Apple Watch, many investors expect the new device to bolster ASE’s shipments, especially after the global semiconductor sector climbs out of its first-quarter doldrums, they said.

ASE shares jumped 6.7 percent to NT$47.75, outperforming the TAIEX, which lost 0.28 percent.

Buying in ASE also spread to other Apple Watch concept stocks, such as TPK Holding Co (宸鴻), which is believed to be supplying touchpanels for the new gadget, and printed circuit board maker Kinsus Interconnect Technology Corp (景碩科技).

TPK shares dropped 0.88 percent to NT$225, retreating from gains in Taipei’s early session, while the stock price of Kinsus rallied 1.45 percent to NT$105.

“The launch of the Apple Watch triggered buying in ASE shares and other local suppliers soon after the local bourse opened today,” Ta Ching Securities (大慶證券) analyst Andy Hsu said.

“The buying showed that investors are betting that Apple fans will rush to pick up the new product.”

In a news conference held in San Francisco on Monday, Apple chief executive Tim Cook unveiled the Apple Watch, calling it “the most personal device we have ever created.”

Consumers wear the gadget on their wrists, but it requires an iPhone to be fully functional.

“Many market analysts expect Apple to ship about 20 million Apple Watches in the first year. Shipments could double in the second year. ASE is the sole IC packaging and testing service provider and will no doubt become one of the major beneficiaries,” Hsu said.

Hsu said ASE shares have shown resilience in recent sessions even as the broader market has suffered a pullback because foreign institutional investors have increased their holdings of the stock on optimism that the Apple Watch will strengthen ASE’s earnings.

The market has projected that ASE’s first-quarter revenue will fall about 13 percent from the previous quarter because the first quarter is traditionally slow for the semiconductor industry.

“[However,] after the slow season effects fade, the company will return to sales growth the rest of this year,” Hsu said.

However, he cautioned that “despite the optimism toward its shipments for this year, investors should beware of strong technical resistance at around NT$50 that could affect ASE shares in the short term.”

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