Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) is poised to see stronger sales growth next year, as the company may provide more packaging and testing services for Apple Inc’s next-generation application processor and fingerprint sensor modules, HSBC Securities said on Friday in a research note.
HSBC said Apple is diversifying its integrated circuit supply chain and will land its A8 application processor orders at Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) next year, allowing the Taiwanese foundry to use the 20-nanometer process technology to make the chips in the January to March quarter of next year.
As a result, ASE, the world’s largest chip packager and tester, will see its advanced packaging revenue accelerate next year, given a 30 percent share of the A8 chip packaging business, HSBC analysts Yao Tse-yong and Steven Pelayo said in the note.
The brokerage forecast ASE to generate about NT$7.5 billion (US$254.3 million) of A8 packaging revenue, accounting for 3 percent of the company’s estimated revenue of NT$247.63 billion for next year.
The revenue forecast of NT$247.63 billion represents an increase of 17.3 percent from an estimated NT$211.09 billion this year, which HSBC said will also result from ASE securing more fingerprint sensor module orders as Apple may aggressively proliferate its fingerprint sensor design to more devices. It is currently only available on the iPhone 5S.
The company’s fingerprint sensor revenue could grow nearly five times to NT$20.5 billion next year from NT$4.2 billion this year, HSBC forecast.
Shares of ASE have risen 17.46 percent so far this year. The broader market had an 8.44 percent increase over the same period. The stock closed at NT$29.6 on Friday.
HSBC raised its target price on the stock to NT$32 from NT$30.
ASE last week reported record-high consolidated sales for the third quarter at NT$56.75 billion, but is likely to see a decline of 2.4 percent this quarter due to seasonal factors, HSBC said.
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