Chip packaging services provider ChipMOS Technologies Inc (南茂科技) yesterday said it plans to ramp up capital expenditure this year amid growing chip demand for artificial intelligence (AI) and data centers.
The company said that part of the spending would be used to build advanced chip packaging capacity for customers’ next-generation chips used in cutting-edge AI devices.
It said this year’s capital spending would account for 22 percent to 27 percent of total revenue, compared with about 16 percent last year.
Photo: Yang Chin-cheng, Taipei Times
That means a substantial increase from NT$3.67 billion (US$116.7 million) spent on new manufacturing equipment last year.
“There is strong customer demand. For the new capital spending, we have secured a longer-than-three-year supply contract for protection,” ChipMOS chairman Cheng Chih-chieh (鄭世杰) said at an earnings conference.
As ChipMOS is facing capacity constraints, it reserves most of its capacity for major customers and has to turn down small-scale orders, even though some customers offered to double the prices they pay, Cheng said.
He said the company’s higher capital expenditure budget reflects its optimistic business prospects for this year, and it expects growth momentum to be stronger than that of last year, driven mainly by memory-related businesses.
“The deployment of AI and cloud-based data centers is fueling enterprises’ demand for NAND flash and DRAM chips. Together with the emergence of cutting-edge AI devices, demand for memory chips is on the rise,” Cheng said.
ChipMOS said it expects fewer working days this quarter to lead to a mild correction in its business, although the DRAM segment would still outgrow other segments.
The company is hiking prices for memory packaging and testing services this quarter due to an uptrend in raw materials such as gold, Cheng said.
The company also raised prices in last year’s third quarter.
It reported the strongest quarterly earnings in nine quarters for last quarter, benefiting from strong demand for memory packaging and testing services.
Net profit more than doubled to NT$499.7 million in the fourth quarter last year, compared with NT$232.2 million during the same period of 2024, marking the best quarter since the third quarter of 2023. That represented quarterly growth of 41.9 percent from NT$352.2 million.
Earnings per share rose to NT$0.71 last quarter from NT$0.32 a year earlier and NT$0.5 a quarter earlier.
Gross margin improved to 14.3 percent last quarter from 9.5 percent a year earlier and from 12.4 percent in last year’s third quarter. The company attributed the improvement to an optimized product portfolio and higher equipment utilization for memory chips at 75 percent versus a 65 percent corporate average.
Last year, net profits slumped about 65 percent to NT$495.1 million from NT$1.42 billion in 2024. Earnings per share dipped to NT$0.7 from NT$1.95.
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