Wed, Jul 29, 2015 - Page 13 News List

Powertech expects mild revenue growth

By Lauly Li  /  Staff reporter

Powertech Technology Inc (力成), a memorychip tester and packager, yesterday said it expects revenue this quarter to grow mildly from the previous quarter, while gross margin could also improve quarterly, driven by continued robust demand for DRAM chips for mobile and graphics devices.

“The overall market may face a slowdown in demand this quarter, but thanks to main clients’ demand for DRAM because of new smartphone launches, Powertech could still grow from last quarter,” company president JY Hung (洪嘉鍮) told an investors’ conference, without providing a sales estimate for this quarter.

Powertech chairman Tsai Du-kung (蔡篤恭) said the company’s DRAM business for mobile devices was good in the first six months, although Chinese and South Korean smartphone makers faced softer-than-expected demand in the period.

“We have very diversified smartphone clients,” Tsai said.

“We expect the demand for DRAM for mobile devices to remain strong in the second half and to drive Powertech’s overall revenue performance,” he said.

Hung said growing demand for servers worldwide has brought higher orders for advanced DRAM chips used in high-end servers, which might also boost the company’s revenue this quarter.

The company expects sales contributions from its overall DRAM business to increase to about 45 percent this quarter from last quarter’s 36 percent, Hung said.

Hung said the company foresees orders growing this quarter in its flash memory business — which accounted for 35 percent of Powertech’s total revenue last quarter — on the back of the increasing demand for high-end smartphones and solid-state drives.

However, logic IC business, which contributed 29 percent of Powertech’s sales last quarter, is expected to be flat from last quarter, Hung said.

The logic IC business is expected to grow significantly in the final quarter, fueled by clients’ new projects, he said.

Last quarter, net income dropped 3.1 percent to NT$1.18 billion (US$37.37 million) from a year earlier, mainly due to higher operating expenses due to wage raises, Powertech said.

On a quarterly basis, profit jumped 15.68 percent, the company said.

Earnings per share were NT$1.2 last quarter, up from last year’s NT$1.18 and the prior quarter’s NT$1.01, it said.

Powertech’s gross margin last quarter was 18.7 percent, an improvement from 18.1 percent last year and 17.7 percent the previous quarter on better product mix, Hung said.

“We will maintain this product portfolio and increase the utilization of production capacity to keep improving gross margin this quarter,” he said.

Powertech shares surged 3.81 percent to NT$51.8 in Taipei trading yesterday, ahead of the firm’s investors’ conference, outperforming the TAIEX, which gained 0.3 percent.

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