Powertech Technology Inc (力成科技), the world’s biggest supplier of memory chip packaging and testing services, yesterday said that net profit dipped 7.1 percent sequentially last quarter due to sluggish demand for system-in-package (SiP) modules and mobile DRAM chips.
Net income fell to NT$1.62 billion (US$56.05 million), compared with NT$1.75 billion in the second quarter.
Earnings per share declined to NT$2.10 from NT$2.26.
Photo: Hung Yu-fang, Taipei Times
On an annual basis, net profit improved 1.4 percent from NT$1.6 billion.
Revenue contracted 2.4 percent sequentially to NT$18.94 billion last quarter, better than the company’s forecast of a 9 percent drop.
Gross margin was flat at 19.4 percent compared with the second quarter and down from 20.1 percent a year earlier, due to lower factory utilization.
The Hsinchu-based company blamed the COVID-19 pandemic and the US-China trade dispute for the weaker-than-expected demand.
“We were expecting the third and fourth quarters to be our strongest quarters of this year. This hope was dashed by the US’ export restrictions on Huawei Technologies Co [華為],” Powertech chairman D.K. Tsai (蔡篤恭) told investors. “However, we believe that the third quarter was the worst period.”
Intel Corp’s plan to sell its NAND flash memorychip unit to SK Hynix Inc would have no immediate impact on Powertech’s business, Tsai said.
Powertech will continue to provide NAND flash memory packaging services to Intel before the deal is completed in 2025, he added.
The company also unveiled a major revamp in its service offerings.
It plans to invest NT$15 billion to expand its advanced logic chip packaging capacity, Tsai said, adding that this division would account for 50 percent of its overall capacity next year.
The company expects its revenue to be flat, or to post a mild growth this quarter, compared with the previous quarter.
Strong packaging and testing service demand for logic chips, DRAM and flash memory chips used in PCs amid the work-from-home and online learning trends would drive growth, Powertech chief executive officer Boris Hsieh (謝永達) said.
5G-related applications, artificial intelligence of things, medical devices, flat panels and entertainment gadgets, such as game consoles and TVs, would also help boost growth, Hsieh said.
Demand from automotive devices is expected to pick up this quarter as well, he said.
By product, its flash memory business, which accounted for 39 percent of Powertech’s revenue last quarter, is expected to grow sequentially this quarter, benefiting primarily from demand for higher-density memory chips and solid-state drives for consumer electronics, while servers and data centers would see slower demand due to excess inventory, Hsieh said.
Its DRAM business, which contributed 23 percent to revenue last quarter, is expected to be flat, or to drop slightly this quarter due to conservative demand for chips used in servers and graphics, offsetting robust demand for DRAM chips used in PCs and mobile phones, Powertech said.
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