Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip tester and packager, yesterday posted its weakest net profit in three quarters, dragged by weaker-than-expected demand in its system-in-a-package (SiP) business.
ASE provides SiP services for fingerprint modules used in Apple Inc’s iPhones, as well as in wearable devices for other clients.
During the quarter ending March 31, net income contracted 17 percent to NT$4.16 billion (US$128.87 million) from NT$4.99 billion in the previous quarter and declined 7 percent from NT$4.47 billion the previous year.
Despite the decline, net income in the first three months of the year surpassed the NT$3.27 billion projected by BNP Paribas SA analyst Szeho Ng (吳思浩).
Gross margin slid to 22 percent in the first quarter from 26 percent in the previous quarter, with ASE attributing the decline to fewer SiP orders.
The company expects SiP demand to remain weak through this quarter because of seasonal factors, and for its core chip packaging and testing business to see mild single-digit percentage growth from last quarter’s revenue of NT$35.54 billion.
Revenue from its electronics manufacturing business is forecast to decline moderately this quarter from the previous quarter’s NT$24.75 billion, the company said.
“We see a recovery in the second quarter. We believe our chip testing and packaging business will have mild growth, bringing it back to fourth-quarter levels,” chief financial officer Joseph Tung (董宏思) said.
The recovery should be across the board, with the automotive segment posting stronger growth, Tung said.
The communications segment will be relatively weaker due to tepid demand for SiP services, the executive said.
The SiP business, which accounted for 20 percent of ASE’s revenue last year, should pick up in the second half of this year, as customers launch their second-generation products, Tung said.
ASE said it is adjusting its SiP strategy by focusing on higher-margin products — rather than volume growth — to enhance returns on investment.
SiP gross margins are lower than overall margins, it said.
SinoPac Securities Investment Services Co (永豐投顧) forecast that ASE’s second-quarter revenue would increase 11.3 percent to NT$69.42 billion from NT$62.37 billion last quarter.
Separately, ASE on Thursday announced that it plans to acquire a 20.52 percent stake in Deca Technologies Inc for US$59.88 million, in a bid to speed up its expansion into next-generation integrated fan-out (InFO) packaging technology.
To obtain technology patent licensing from Deca, ASE is to pay US$12.5 million and an unspecified amount of royalties.
Tung said the company would start the technology transfer from Deca this year and he expects Deca to contribute meaningful revenue from next year.
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to