Advanced Semiconductor En-gineering Inc (日月光), the second-largest chip packager, will probably record a third-quarter loss as revenue fell more than 40 percent amid slower global demand for semiconductors.
ASE may say it had a loss of NT$641 million (US$19 million), or NT$0.20 per share, in the three months to Sept. 30 compared with a profit of NT$1.6 billion, or NT$0.59 per share a year ago, according to the average estimate of four analysts surveyed.
ASE's revenue for the third-quarter based on its monthly sales reports fell to NT$8.3 billion from NT$13.9 billion a year ago.
Advanced Semiconductor, which reports earnings tomorrow, lost revenue mainly from a subsidiary, ASE Test Ltd, during the period, and will probably report losses in the fourth quarter and the first half of next year, analysts said.
"The company will post a double-digit improvement in sales for the fourth quarter, but that won't be enough to return them to the black," said Shah Tayyib Ali, an analyst with Indosuez W.I.Carr Securities.
"The company may return to profit by the third quarter of next year."
ASE reported its first loss since 1998 in the second quarter this year as waning demand for computer and communications chips pushed down prices and idled more than half of its capacity. The company should be operating at about 60 percent of capacity in the fourth quarter as orders increase, analysts said.
The Taiwanese company's major customers include chipmakers such as Motorola Inc and IBM Corp, which have farmed out these operations to cut costs.
ASE benefits from its proximity to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the largest maker of chips for other companies.
Many of the silicon wafers that ASE cuts chips from are made by TSMC.
Most of ASE's revenue currently comes from packaging communications and consumer chips, analysts said.
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