Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip packager and tester, yesterday posted 27 percent quarterly growth in profit for last quarter on the back of seasonal demand for smartphones.
Net profits grew from NT$4.33 billion to NT$5.51 billion (US$137 million to US$174 million) in the second quarter, the company said.
Earnings per share rose from NT$0.57 to NT$0.72 over the same period, it said.
The latest profit figures included a non-operating income of NT$472 million due to investment gains from its shareholdings in Siliconware Precision Industries Co Ltd (SPIL, 矽品精密) last quarter, ASE said.
The Kaohsiung-based ASE currently holds about a 33 percent stake in SPIL. The company is proceeding with a NT$128.7 billion takeover bid to fully own its smaller rival headquartered in Taichung.
ASE expects growth momentum to weaken for its core chip packaging and testing business due to seasonal factors. Revenues from the core business are expected to drop by a low-single-digit percentage point this quarter from NT$43 billion generated last quarter.
“We are experiencing normal seasonality,” ASE chief financial executive Joseph Tung (董宏思) told investors. “Our business usually hits its peak in the third quarter.”
The ratio of factory utilization for the company’s core business is likely to be flat, or drop by as many as 5 percentage points this quarter, compared with 85 percent for its chip packaging machines and 80 percent for its chip testers last quarter, ASE said.
Gross margins for the core business is expected to be little changed in the current quarter, from 25.5 percent in the second quarter, the company said.
As for its electronic manufacturing service (EMS) business, ASE said it expects to see improvement in its system-in-a-package (SiP) services this quarter.
ASE counts Apple Inc as one of its major clients for its SiP services, which are mainly used in the manufacturing of wearable devices. The company said it has started seeing positive results from its new strategy of focusing on selective orders to maintain profits.
Therefore, the factory utilization rate for the EMS business is likely to increase by between 10 percent to 15 percent this quarter from last quarter, the company said.
Gross margin for the EMS business is likely to hold steady at about 9 percent this quarter, the company said.
Commenting on the potential threat from its Chinese peers, Tung said ASE has a competitive edge, given that the company’s technological capabilities have been built-up over the past 30 years.
Chinese customers account for 4 percent of the company’s overall revenue from its chip packaging and testing businesses, he said.
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