Siliconware expects 3Q loss as capacity lies idle

Siliconware Precision Industries Co (矽品精密), the nation's third-largest chip packager, said it expects to post its second consecutive quarterly loss in the three months to September, as almost half of the company's capacity lies idle.

"Profit is still struggling at the operating level," said Bough Lin, vice chairman of Siliconware, in an interview. "We expect 10 percent growth in sales from the second quarter."

Taipei-based Siliconware, which cuts chips from silicon wafers and packages them in insulating plastic, suffered from a drop in demand that is expected to shrink the global market by 34 percent to US$117 billion this year, according to market researcher IC Insights Inc.

It's not clear yet whether business will improve in the fourth quarter following the terrorist attacks in the US, Lin said.

Losses at the company will probably continue for at least two more quarters, some analysts said.

"We were projecting them to break even in the second quarter of next year," said Theodore Teo, an analyst with Nomura Securities Co. "That was before what happened in the US."

Siliconware, which packages semiconductors for computer-chip makers like Via Technologies Inc (威盛電子) and Nvidia Corp, used between 40 percent and 45 percent of its capacity in the second quarter and usage is expected to increase to 60 percent in the third quarter, the company said in July.

Siliconware made its first loss, of NT$215 million (US$6.2 million), in the second quarter, compared with a profit of NT$1.1 billion in the year-before period. Sales in the three months to June fell by a quarter to NT$3.5 billion from the previous year.