Siliconware Precision Industries Co (SPIL, 矽品), the world’s No. 2 chip packager, yesterday reported that fourth-quarter earnings fell but margins improved as it expanded its copper wirebonding business.
Net income declined 25 percent to NT$1.11 billion (US$37.88 million) in the final quarter of last year, compared with NT$1.49 billion in the third quarter and surpassing Credit Suisse’s forecast of NT$757 million.
Gross margin expanded to 14.3 percent last quarter, from 14.2 percent in the third quarter, according to the company’s financial statement released yesterday.
BETTER THAN EXPECTED
Credit Suisse had expected SPIL’s gross margin to drop to 11.5 percent as the New Taiwan dollar’s appreciation against the greenback could have eroded margins.
“Using copper for wirebonding is much better than gold,” as it is more cost-efficient especially with gold prices soaring, SPIL chairman Bough Lin (林文伯) told investors via a Webcast.
Revenues from its copper bonding business accounted for a larger — 17.9 percent — share of last quarter’s wirebonding revenues, compared with 10.7 percent in the third quarter, the financial statement showed.
On an annual basis, fourth-quarter net income plunged 74 percent from NT$4.3 billion in the same period of 2009.
Full-year net income contracted 36 percent to NT$5.63 billion, from NT$8.79 billion in 2009, while revenues rose 7.7 percent to NT$63.86 billion, from NT$59.3 billion a year earlier.
This quarter, Lin said revenues could fall by a mid-single-digit percentage from last quarter’s NT$15.48 billion. Gross margin could slide to about 12 percent because of a rising NT dollar and still climbing gold prices.
Every NT$1 appreciation of the NT dollar would erode gross margins by about 2 percentage points, or revenues by about 3 percent, Lin said.
End demand for PCs would rise slightly this quarter, while consumer electronics and communications would drop slightly, Lin said.
HIGH UTILIZATION
Capacity utilization would drop to 85 percent this quarter, from 90 percent last quarter, he said.
The company plans to spend at least NT$10 billion to speed up conversion of gold bonders into copper bonders, lower than the NT$15 billion budgeted for last year, Lin said.
The projected expenditure does not include spending for new assembly lines in China, he added.
Lin expected the company to outgrow the chip packaging and testing industry this year, which he said could grow by 7 to 15 percent, boosted by demand for new electronics products, including tablet devices and smartphones.
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