Chip testing and packaging services provider Powertech Technology Inc (力成科技) yesterday said net profit last quarter plunged 19 percent to NT$1.28 billion (US$43.1 million) from NT$1.58 billion in the previous quarter due to massive foreign exchange losses.
The company reported NT$670 million in foreign exchange losses following a 10 percent appreciation of the New Taiwan dollar against the greenback, the company said.
On an annual basis, net profit plummeted 41 percent from NT$2.31 billion, it said.
A Powertech Technology Inc sign is pictured at an entrance to the company’s third plant in the Hsinchu Science Park on June 11, 2022.
Earnings per share (EPS) dropped to NT$1.3 from NT$1.58 in the previous quarter and NT$2.45 in the second quarter last year.
The rapid appreciation of the NT dollar erased NT$452 million in net profit and NT$0.61 in EPS, Powertech chairman Tsai Du-kung (蔡篤恭) said at an earnings conference.
It also cut gross margin to 15.9 percent last quarter from 17 percent in the prior quarter, Powertech financial officer Huck Shen (沈俊宏) said, adding that every 1 percent appreciation in the NT dollar would reduce gross margin by 0.6 percent.
The company remains positive about revenue growth in the third quarter, Tsai said.
Net profit and gross margin are expected to return to their normal performance if the NT dollar hovers at the NT$29.5 level, he said.
In that case, the company’s revenue this year would be little changed from last year’s NT$73.7 billion, Powertech chief executive officer Boris Hsieh (謝永達) added.
Powertech expects increased demand for DRAM chip packaging and testing services in the second half of this year, driven by customers’ inventory replenishment and the launch of new devices, Hsieh said.
In the logic chip packaging and testing sectors, the company is seeing benefits from rising demand as customers shift orders out of China, along with growing demand for power modules, he said.
This quarter, the factory utilization rate for packaging equipment is expected to rise to 85 percent, up from 80 percent, while testing equipment usage is expected to remain steady at 70 percent, the company said.
Although most industry experts anticipate that fan-out panel-level packaging (FOPLP) technology would take longer to reach the commercial stage, Powertech still plans to make significant investments in advanced FOPLP technology next year, having already made breakthroughs toward its commercialization, Tsai said.
Powertech expects its FOPLP technology to start contributing revenue next year in the form of non-recurring engineering revenue initially, he said.
He expects the non-recurring engineering revenue to stand at US$10 million a month from the second half of next year and double to US$20 million a month in 2027, he added.
Powertech has increased its capital expenditures to NT$19 billion for this year, from its original budget of NT$15 billion, it said.
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