Memorychip tester and packager Powertech Technology Inc (力成科技) yesterday posted a nearly 19 percent sequential decline in net profit for the first quarter, mostly due to sluggish DRAM chip demand for PCs and smartphones due to a seasonal drag.
Net profit fell to NT$1.17 billion (US$38.8 million) in the quarter ending March 31, compared with NT$1.44 billion in the final quarter of last year, the company said.
That translated into earnings per share (EPS) of NT$1.50, a decrease from the previous quarter’s EPS of NT$1.84.
The Hsinchu-based company expects a mild pickup in smartphone demand and modest growth in the PC sector to stimulate revenue growth this quarter.
“The second and third quarters will be a better period for the PC industry due to the back-to-school shopping season,” Powertech general manager Hung Chia-yu told investors yesterday. “Handset demand will be very mild in the second quarter. Some major Chinese smartphone vendors are still digesting inventories because of weaker-than-expected product demand.”
Powertech expects revenue to grow a mid-single-digit percentage this quarter from last quarter’s NT$12.66 billion, Hung said.
Overall this year, Hung said he expects revenue to “grow quarter by quarter,” similar to the growth pattern Powertech experienced last year.
Hung said he expects a stronger growth momentum to set in during the second half across the board.
He said he expects higher demand for NAND flash memory chips and solid-state drives used in enterprise PCs and data centers, increasing demand for 3D NAND flash memory chips and also for PC DRAM chips.
In the second half, the loading rate for the company’s chip packaging lines would surge to 100 percent, Hung forecast.
Powertech is also seeking expansion via mergers and acquisitions. The company expects to add NT$4 billion in revenue a year from acquiring two Japanese chi packagers and testers for at least US$86 million. The deals are due to close later this year.
Earlier this month, Powertech announced that it plans to buy an additional 39.6 percent stake in Tera Probe Inc from Micron Technology Inc, and to fully acquire Micron Akita Inc from Micron.
“By combining those two companies, we aim to create the biggest chip packager and tester in Japan within the next three years, surpassing J-Device Corp,” Powertech chairman D.K. Tsai (蔡篤恭) told investors.
Powertech ramped down its expansion into the Chinese market after it canceled a share sale plan with Tsinghua Unigroup Inc (清華紫光) in January due to regulatory hurdles.
“We will not ignore the Chinese market, but we do not have any substantial expansion plans over the next one or two years,” Tsai said. “It is very important to protect our technology… we will not exchange our technology for capacity expansion in China. We hold a conservative attitude on that.”
Powertech also said that Chinese rivals still lag far behind Taiwanese firms in terms of technological capabilities, especially in the DRAM segment, despite their aggressive fab expansion plans.
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