ASE Technology Holding Co (ASE, 日月光投資控股) yesterday posted a 45 percent decline in net profit for the third quarter, blaming expenses and fair value adjustments stemming from the acquisition of Siliconware Precision Industries Co (矽品).
The world’s biggest chip packager and tester saw its net profits sink to NT$6.26 billion (US$202 million), compared with NT$11.46 billion in the second quarter.
On an annual basis, net profits slipped about 1.2 percent from NT$6.34 billion.
Earnings per share fell to NT$1.47, from NT$2.7 a quarter ago and NT$1.52 a year earlier.
Revenue climbed to a record-high NT$107.6 billion, as robust demand for high-end chip packaging and testing capacities offset softness in businesses related to cryptocurrency and communications, the company said.
“There will be seasonal adjustment in the fourth quarter … but we believe we can still maintain a quarter-by-quarter growth trend this year,” chief financial officer Joseph Tung (董宏思) told an investors’ conference.
The adjustment would result in a 4 percent quarterly decline this quarter in its core chip assembly, testing and material (ATM) businesses, compared with NT$66.32 billion in the third quarter, ASE said.
Gross margin for the ATM businesses is likely to change little from 21.5 percent last quarter, it said.
ASE expects overall revenue to grow by a low single-digit percentage in US dollar terms, supported by strong growth from its electronics manufacturing service operations primarily the system-in-package (SiP) business.
ASE last week agreed to sell a 20 percent stake in its Chinese subsidiary, Siliconware Electronics (Fujian) Co (矽品電子福建), to China’s Fujian Jinhua Integrated Circuits Co (晉華集成電路) for US$22.5 million.
Commenting on Washington’s restrictions on US companies selling software and technology goods to Fujian Jinhua, Tung said the impact on ASE would be limited.
“ASE’s Xiamen fab serves potential customers in the southern China region for logic or memory chips, not just Fujian Jinhua.” Tung said.
The collaboration with Fujian Jinhua “is a step for localizing our operations in the region,” he said.
ASE has the flexibility to support customers’ requirement if they want to shift their manufacturing outside of China to avoid tariffs imposed by the US amid a US-China trade war, as it has manufacturing capacities in Taiwan and Mexico, and has established a footprint in Eastern Europe, he said.
Its Brazilian joint venture with Qualcomm Inc is also on track, Tung said.
The joint venture, worth US$705 million, is to develop and produce SiP modules, the companies announced in February.
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