SPIL sees further business drop after weak quarter

By Crystal Hsu  /  Staff reporter

Thu, Jan 31, 2013 - Page 13

Siliconware Precision Industries Co (SPIL, 矽品精密), the world’s second-largest chip tester and packager, yesterday reported an 8.1 percent sequential decline in net income last quarter because of softer-than-expected demand for mobile devices and continuing weak PC sales, company chairman Bough Lin (林文伯) said.

Lin said that business prospects could further deteriorate this quarter or through the first half of the year, until the global economy shows concrete signs of a recovery and stimulate consumer purchases of technology products.

The Greater-Taichung company reported NT$1.56 billion (US$52.76 million) in net income during the October-to-December period, down 8.1 percent from the previous quarter, according to company data. That figure translates into earnings per share (EPS) of NT$0.51.

For the whole of last year, SPIL had a net profit of NT$5.62 billion, or EPS of NT$1.82, representing an increase of 16.2 percent from a year earlier, company data show.

Fourth-quarter revenue stood at NT$16.15 billion, down 4.2 percent from the third quarter, but up 2.8 percent from a year ago, company data showed.

The packaging business took a tumble from early last month, as customers slowed outsourcing in response to rising inventory levels, Lin said.

The situation failed to improve this month and may worsen next month given fewer working days, Lin said.

Overall inventory levels may start to moderate after the Lunar New Year holiday and return to normal in March, boosting demand for chip packaging and testing services, Lin said.

“The business downturn could bottom out this quarter or in the first half,” he said. “The conservative sentiment [among customers] has eased somewhat with the global economy on track to a recovery.”

Lin did not provide a profit forecast, but said: “The company will strive to raise gross margins to 20 percent this year,” up from 18.9 percent last quarter and 18.2 percent last year.

Utilization rates for wire-bonding packaging would slide to about 80 to 85 percent this quarter, from 95 percent last quarter, while IC logic testing and flip-chip packaging would both drop to a range of 68 to 72 percent, from 80 percent, Lin said.

Jonah Cheng (程正樺), chief semiconductor analyst at UBS, said the figures suggest a 15 percent decline in terms of output, which would also be reflected in the company’s revenue and profit.

Lin said he was upbeat about the industry in the coming two to three years as consumer communications products would become a daily part of people’s lives because of affordable pricing.

Capital expenditure, which the board approved last month, will stay unchanged at NT$11.3 billion this year, Lin said.