Powertech Technology Inc (PTI, 力成), which provides packaging and testing services for memory chipmakers, will encounter greater competition from bigger rivals, including Advanced Semiconductor Engineering Inc (ASE, 日月光), even though the company is earmarking research spending on more advanced IC packaging this year, analysts said.
The analysts’ remarks came after ASE, the world’s biggest chip packager, and Inotera Memories Inc (華亞科技), which supplies DRAM chips solely to US-based Micron Technology Inc, announced on Monday they would partner in developing a SiP (system-in-package) business.
SiP is a module containing an electronic system or subsystems that utilize either 2.5D or 3D IC assembling technologies to miniaturize the package, which will enable chipmakers to integrate increased functionality within smaller form factors for applications used in ultra-mobile PC, tablet, smartphone and the Internet of Things.
“Although PTI is also putting R&D resources into more advanced memory packaging, as well as attempting to make a bigger entry into the logic backend space, an added player will only mean added competition,” Yuanta Securities Corp (元大證券) analyst Andrew Chen (陳治宇) said in a note to clients yesterday.
In addition, the closer partnerships among ASE, Inotera and Micron will have a negative effect on Powertech, he said.
That is because Japanese chipmaker Elpida Memory Inc used to be Powertech’s biggest customer, but the Taiwanese firm lost most of Elpida’s testing orders in the second half of last year after the Japanese company was acquired by Micron.
Shares of Powertech fell 0.53 percent to NT$46.95 yesterday on the Taiwan Stock Exchange, underperforming the broader market’s 0.13 percent increase.
The company yesterday posted consolidated revenue of NT$9.23 billion for the first quarter of the year, up 0.19 percent year-on-year thanks to rising packaging and testing demand for services for specialty memory and mobile memory chips.
The figure dropped 3.8 percent quarter-on-quarter due to seasonal factors.
Shares in ASE rose 1.36 percent to close at NT$33.45, while Inotera fell 0.21 percent at NT$24.15.
On Monday, ASE and Inotera said in a statement that they will collaborate to deliver high-quality and cost-effective SiP products, with Inotera manufacturing silicon interposers and interconnect devices on silicon wafers for 2.5D IC solutions for ASE’s SiP products.
However, the two firms did not elaborate on what specific products they were planning to develop, or the financial terms and earnings distribution under their collaboration.
Morgan Stanley said the alliance would create win-win situation for ASE and Inotera, expecting their collaboration would start making contribution next year.
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