ASE predicts growth in revenue

HEALTHY REPORT?:Chief operating officer Tien Wu said that the global semiconductor industry’s revenue is expected show results indicating healthy growth

By Lisa Wang  /  Staff reporter

Wed, Jun 24, 2015 - Page 13

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packager and tester, yesterday said that quarterly revenue would grow in the second half of this year as expected due to increasing demand for its system-in-packaging (SiP) business.

ASE, which provides SiP services for fingerprint sensors used in Apple Inc’s iPhones, expects revenue from its SiP business to account for 30 percent of its total revenue this year, compared with 18 percent at the end of last year, company chairman Jason Chang (張虔生) said in an annual report to shareholders.

The firm’s approach, which combines its system-level packaging and electronic manufacturing services, is to provide a strong driving force for the company in the future, Chang said.

“We will continue to grow in the second half,” cable TV station USTV quoted ASE chief operating officer Tien Wu (吳田玉) as saying following the company’s annual general meeting.

“Early this year, we set a goal to grow [revenue] quarter by quarter this year,” Wu said.

“We will stick to that goal,” he added.

Wu said that the company was cautiously optimistic about the overall semiconductor industry over the next two quarters following inventory adjustments in supply channels this quarter, while seasonal demand would help boost demand.

Daiwa Capital Markets Inc forecast that ASE this year would expand its revenue by more than 19 percent to NT$306.69 billion (US$9.89 billion) from last year’s NT$256.59 billion.

Wu said the global semiconductor industry’s revenue is expected to show expansion at a stable annual rate of between 0 percent and 5 percent over the period from 2011 to this year, which would constitute healthy growth.

Wu said he expects such stable expansion to continue for the next few years.

Stable growth will mean slower capacity investment and milder price declines, which have helped the industry generate stable profits over the past few years, Wu said.

Wu said that the rise in China’s semiconductor industry could bring opportunities for Taiwanese companies, given China’s massive market.

However, Taiwanese firms still have to pay attention to China’s increasing influence in the industry, he said.

Before Chinese companies can grow enough to become strong rivals, the Taiwanese semiconductor industry would continue to grow over the next five to 10 years, while European and US semiconductor manufacturers exit the market, he added.

Shareholders yesterday approved ASE’s proposal to distribute a cash dividend of NT$2 per share based on the company’s net profit of NT$24.22 billion last year, or NT$2.95 per share. The issuance would represent about a 68 percent payout ratio.

Shareholders also gave the green light to a fundraising plan to issue 500 million common shares through overseas rights issuances or private placements.