Silicon substrate maker Kinsus Interconnect Technology Corp (景碩科技) is attempting to expand beyond handsets and base station applications and into wearable devices, Yuanta Securities Corp (元大證券) said yesterday.
“For the first time, we learned that Kinsus is exploring a fresh business opportunity in new substrates with a US client for wearable devices,” Yuanta analyst Andrew Chen (陳治宇) said in a note to clients.
The analyst did not identify the US client, the type of wearable device Kinsus is working on or its timeline for production ramp-up.
“From what was disclosed, it is a new substrate type based on new designs that may employ the existing roll-to-roll [manufacturing process] used for LDI [laser direct imaging] packaging, but with new core materials,” he said.
While Chen did not elaborate in his note about Kinsus’ plan, the move may open up opportunities for the company, which is not immune to inventory digestion within the semiconductor supply chain, let alone slowing smartphone orders and rising pricing competition.
On Tuesday, the company said its revenue declined for the second straight month last month to NT$2.02 billion (US$687 million) from NT$2.05 billion in August.
However, last quarter’s revenue still increased 4.9 percent quarter-on-quarter and 9.8 percent year-on-year to NT$6.15 billion, the second-highest level ever for the firm, the company said.
Kinsus’ substrate products are mainly used in communications devices. However, slower growth in smartphones in recent months has dragged down demand for application processor, baseband, radio frequency and wireless networking chips, which in turn has affected the company.
In addition, rising competition in the flip-chip substrate market could be a potential risk for Kinsus as existing players like Samsung Electro-Mechanics Co and Ibiden Co are aggressively promoting new products, while new players such as Unimicron Technology Corp (欣興電子) are lowering prices in pursuit of market share.
Revenue for this quarter is likely to decline 1.6 percent quarter-on-quarter to NT$6.13 billion as Kinsus’ IC substrate business will suffer from declining demand for communication and networking chips, SinoPac Securities Investment Service (永豐金投顧) analyst Chen Cheng-chieh (陳振傑) said yesterday in a separate note.
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