Memorychip packager and tester Powertech Technology Inc (力成科技) yesterday reported its strongest quarterly earnings in four quarters, mainly due to recovering demand from a US client, as Washington eases sanctions on Huawei Technologies Co (華為).
As its US client resumed memorychip supply to Huawei, Powertech said it expects the growth momentum to extend into this quarter and even the first quarter of next year.
Demand for NAND flash memory chips used in data centers and solid-state drive (SSD) products has also increased, it said.
To cope with the robust demand, the company said it is raising its capital expenditure to boost capacity.
“It is very rare for Powertech to increase its investment into new equipment in September or October,” Powertech president Hung Chia-yu said.
The world’s largest data center operators — from US-based Amazon.com Inc, Facebook Inc and Apple Inc, to China’s Alibaba Group Holding Ltd (阿里巴巴) — resumed investments in data centers in the second half of this year, reversing cutbacks in the first half, Powertech said.
Powertech said it is to enter a new high capital-intensive period from next year, as it is developing advanced technologies.
The company is to spend between NT$14 billion and NT$15 billion (US$457.6 million to US$490.3 million) on new equipment next year, soaring at least 40 percent from this year’s NT$10 billion.
“As demand for DRAM, NAND flash memory and logic chips is improving, revenue in the fourth quarter should grow quarter-on-quarter, which should help the company’s annual revenue growth recover,” Hung said.
Revenue is likely to climb to a new first-quarter record next year, Hung said.
Net profit surged 45 percent to NT$1.6 billion during the quarter ending Sept. 30, compared with NT$1.1 billion in the second quarter.
Earnings per share climbed to NT$2.06 from NT$1.42.
Gross margin rose to 20.1 percent last quarter, from 17.2 percent in the prior quarter, thanks to a jump in chip packaging equipment utilization to as high as 90 percent last quarter from 70 percent in the previous quarter, Powertech said.
Revenue grew 17.4 percent quarter-on-quarter to NT$17.71 billion, surpassing the company’s estimate of 10 percent quarterly growth, with the fastest growth coming from NAND flash memory chips, Powertech said.
The company attributed the growth to robust sales of Apple’s new iPhones and Huawei’s new smartphones, as well as improving demand for DRAM chips, it said.
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