Chunghwa Precision Test Technology Co (CHPT, 中華精測), the nation’s biggest probe card supplier, expects revenue to decline about 28 percent quarter-on-quarter this quarter, due to weak demand for probing services for advanced 7-nanometer (nm) processors.
The company had expected revenue from services for 7nm chips to grow this quarter.
Probing services for advanced 7nm processors accounted for 21 percent of the company’s revenue last quarter, a spike from only 1 percent in the second quarter of the year.
“Some orders for 7nm processors have been postponed to the first quarter of next year, as such advanced processors require a longer qualification processes due to their complicated structure and richer features such as AI [artificial intelligence] capabilities,” company president Scott Huang (黃水可) said in a teleconference.
“We now expect that revenue this quarter will be similar to the fourth quarter last year,” he said, implying a significant quarter-on-quarter contraction, as the company made posted record revenue of NT$936 million (US$31 million) in the third quarter.
The company reported NT$677 million in revenue in the final quarter of last year.
However, Huang said he is optimistic about the business outlook for next year, as the company has landed an important first-tier customer in Northeast Asia for its 7nm processor probing services.
“We have more than one client lined up for our 7nm services, as many are gradually preparing to enter the 7nm market,” Huang said.
The company counts Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a key customer of its probe card business.
TSMC is scheduled to ramp up its production of 7nm chips in the first half of next year.
The company also expects to see major progress in widening its customer base, due to its new probing services for application processors, Huang said, adding that it expects to add 10 customers for the service next year, he said.
Chunghwa reported that net profit grew 14.29 percent year-on-year in the third quarter to NT$232 million, driven by services for 10nm processors.
On a quarterly basis, the figure represented a 13.73 percent increase from NT$204 million.
Earnings per share rose to NT$7.49 last quarter, from NT$6.62 in the second quarter and NT$6.6 in the third quarter of last year.
Gross margin improved to 56.9 percent, from 55.4 percent a quarter earlier and 55.1 percent a year earlier.
The company said it is building a new production line to manufacture advanced probe cards for commercial satellites, after it won a major contract in June, and plans to ramp up production of such cards in 2020.
The company plans to spend NT$1.22 billion on new equipment this year has budgeted NT$700 million for next year.
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