Siliconware Precision Industries Co (SPIL, 矽品精密) yesterday posted a 39 percent annual decline in net profit last quarter, but expects demand to pick up significantly in the second half, driven by replacement demand for 4G smartphones.
Net profit plunged to NT$1.6 billion (US$49.57 million) in the three-month period ending March from NT$2.62 billion a year earler. The company lost NT$212 million in the fourth quarter last year due to asset impairments of NT$3.28 billion, partly stemming from its stake in printed circuit board maker Unimicron Technology Corp (欣興電子).
Gross margin shrank to the lowest level in nine quarters at 20.6 percent last quarter, from 26.2 percent in the same period last year, SPIL said in a financial statement.
The world’s No. 3 chip tester and packager said the first quarter was the trough for this year and demand is picking up after supply chain inventory correction came to an end last quarter.
Semiconductor “inventory has reduced to a healthy level. End demand is coming back,” SPIL chairman Bough Lin (林文伯) told an investors’ conference in Taipei.
“In the past two weeks, a lot of our production lines have been running at almost 100 percent,” Lin said. “We are optimistic that the momentum will carry into” the third quarter.
Messages from customers showed that sales of 4G smartphones are to grow 30 to 35 percent annually this year, while demand for 3G and 2G phones is slowing, providing new evidence of sustained replacement demand, Lin said.
“Android phones showed red-hot sales in the second quarter,” Lin said.
Reviving demand is expected to help boost packaging utilization to more than 80 percent in wire-bumping equipment from 73 percent last quarter, while the loading rate of flip-chip equipment is likely to increase to nearly 70 percent from 63 percent last quarter.
After a stagnant first half, Lin said the worldwide semiconductor industry is likely to gather steam later this year and to experience a low-single-digit percentage annual growth in revenue for the whole of this year.
Rising demand for smartphones, solid-state-drive storage, digital set-top boxes and fingerprint sensors will stimulate demand, Lin said.
About 60 percent of phones made by Chinese vendors will be equipped with fingerprint sensors this year, Lin said.
Chinese customers accounted for 25 percent of SPIL’s revenue last year, Lin said.
The chip packaging and testing sector would outgrow the overall semiconductor industry, expanding 6 to 7 percent annually this year due to slower price declines than for handset chips, he said.
SPIL said its plans for capital spending of NT$14 billion this year remained unchanged.
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