Chunghwa Precision Test Tech Co (CHPT, 中華精測), which provides probe card testing services, yesterday said that revenue would slide at a milder pace this quarter compared with the same period last year, as increasing contributions from new probe businesses would offset seasonal weakness.
“Revenue will fall slightly in the fourth quarter. The [quarterly] correction will not be as significant as we experienced [in the fourth quarter] last year,” CHPT president Scott Huang (黃水可) told an investors’ conference in Taipei.
“We have diversified our product lineups. Those new products are to contribute more revenue in the fourth quarter, which will mitigate the seasonal correction,” Huang said.
In the fourth quarter last year, the firm saw revenue tumble 41 percent quarter-on-quarter to NT$545 million (US$17.69 million), as one of its key clients delayed its upgrade to 7-nanometer technology.
“We will see annual growth [in the fourth quarter],” Huang said, without specifying the size of growth.
However, CHPT is forecast to see a 10 percent decline in revenue this quarter from NT$927.92 million last quarter, an analyst who attended yesterday’s conference said.
The analyst declined to be named.
CHPT provides probe card testing services for semiconductor heavyweights, including Qualcomm Inc, Taiwan Semiconductor Manufacturing Co (台積電), Intel Corp and Advanced Micro Devices Inc.
After more than two years of expansion into the probes market, CHPT said it has made some progress.
The company has secured deals with a Chinese cryptocurrency mining chip designer and local smartphone chip designers to use its probes for the probe cards that are used to test semiconductor wafers.
The probe business, which made up about 6 to 7 percent of the company’s revenue last quarter, is expected to constitute more than 10 percent of its revenue next year, CHPT said.
“The probe market is 10 times bigger than the [probe card testing] market we are addressing now,” Huang said.
Goss margin would be little changed this quarter, but would recover in the following quarters, as the company fixed a reliability problem in its advanced wafer testing last quarter, CHPT said.
Gross margin fell to 50.1 percent last quarter from 55.5 percent in the second quarter, as the reliability problem resulted in a warranty reserve of 7.8 percent of total revenue last quarter, the company said.
The warranty reserve, which the company uses to compensate clients if the products have flaws, is predicted to drop to between 3.5 and 4 percent this quarter, which would help cushion the negative effect caused by the higher costs of goods sold during sluggish seasons, CHPT said.
Last quarter, CHPT saw net profit contract by 13.14 percent quarter-on-quarter to NT$178.9 million from NT$205.97 million.
The company said capital spending this year would amount to NT$800 million, rather than NT$900 million that it said it would spend last quarter, as some payments would be deferred to next year due to longer delivery times.
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