ASE Technology Holding Co Ltd (ASE, 日月光投控), the world’s biggest chip packager and tester, yesterday said net profits fell 3 percent annually due to weaker-than-expected demand as some of its customers manage inventories or face supply chain issues.
Net profits dropped to NT$2.04 billion (US$66 million) during the January-to-March period, compared with NT$2.36 billion the previous year. That represented a quarterly decline of 62 percent from NT$5.89 billion in the previous quarter.
“The worst is behind us,” the company said, adding that it expects revenue from its core chip packaging and testing businesses this quarter to equal levels in the first half of last year.
That would mean quarterly growth of 15 percent to about NT$58.88 billion from NT$54.3 billion last quarter, but orders for its electronics manufacturing services (EMS) business are likely to continue to be soft, the company said.
About 40 percent of its EMS business came from system-in-a-package (SiP) services, it added.
The company forecast that gross margin would pick up to about 18.1 percent this quarter.
Gross margin shrank to 12.81 percent last quarter from 15.98 percent a year earlier and 16.39 percent the previous quarter, the company’s financial statement showed.
“We expect a broad base recovery in the second quarter,” company chief financial officer Joseph Tung (董宏思) said yesterday. “Demand from mobile phone, server and notebook computer customers is increasing.”
Moreover, demand from 5G base stations is also expected to fuel growth, he said.
Factory utilization is likely to rise from about 70 percent last quarter to nearly 80 percent this quarter, he added.
This year, the company would stick to its original goal of growing revenue quarter by quarter to surpass last year, Tung said.
The Kaohsiung-based company said that the growth would be supported by its SiP business and new fan-out packaging technology.
The company expects the SiP business to contribute US$100 million in revenue per year over the next few years, while the fan-out packaging technology is to contribute US$0.5 million to US$100 million a year, Tung said.
The company plans to earmark 25 percent of its capital spending this year to develop fan-out packaging. This year’s capital spending — totaling US$1.2 billion — would equal last year’s.
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