ChipMOS Technologies Inc (南茂) yesterday said that net profit last quarter more than tripled from a year earlier, thanks to rising demand from higher-margin driver ICs and new touch controllers with display driver integration (TDDIs) used in smartphone and high-resolution 4K TV panels.
The vigorous demand helped offset weakness from testing and packaging services from DRAM customers, which were going through inventory correction, the company said.
ChipMOS provides packaging and testing services for DRAM and NAND flash memory, as well as display driver ICs.
Net profits surged to NT$516.6 million (US$16.74 million) last quarter, compared with net profit of NT$163 million in the fourth quarter of 2017, ChipMOS said.
On a quarterly basis, net profits rose 17.52 percent from NT$439.6 million, the company said.
Earnings per share climbed to NT$0.46 last quarter from NT$0.13 a year earlier and NT$0.37 in the prior quarter.
Gross margin climbed to 22.8 percent last quarter from 17 percent a year earlier and 19.5 percent in the previous quarter, a company financial statement showed.
Robust demand for TDDIs and driver ICs, particularly those used in narrow-barrel panels for new smartphones, was to thank for a significant improvement in gross margin, the firm said.
The two types of chips require longer testing and more advanced packaging technology due to chip complexity, the company said.
“We have raised prices twice for driver IC [packaging services] last year to cope with strong demand. Increasing penetration of TDDIs also drove customer demand [for testing and packaging services],” company chairman Cheng Shih-chieh (鄭世杰) said during a teleconference.
As TDDIs and narrow-barrel displays gain traction, ChipMOS expects revenue to grow along this year.
“Our internal goal is to grow revenue by a high-single-digit percentage this year,” Cheng said.
Last year, the company made NT$18.48 billion in revenue.
Gross margin would be 16 to 20 percent this year, compared with 18.6 percent last year, he said.
ChipMOS’ net profit dipped 63.6 percent to NT$1.1 billion last year, from NT$3.03 billion in 2017, as Micron Technology Inc, a major client, shifted most of its production in-house.
Earnings per share dropped to NT$1.37 last year from NT$3.57 in 2017.
ChipMOS’ board of directors yesterday approved a cash distribution of NT$1.2 per common share, making for a payout ratio of about 88 percent.
That represents a 4.5 percent dividend yield based on the stock’s closing price of NT$26.7 yesterday in Taipei.
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