Integrated circuit firms optimistic for Q2

Monday, May 7, 2012
The China Post news staff

The China Post news staff--Most of Taiwan's major integrated circuit (IC) testing and packaging firms have expressed cautious optimism for their sales in the second quarter, with capacity utilization set to increase by the month.

IC testing and packaging firms, such as Advanced Semiconductor Engineering (ASE), Siliconware Precision Industries Ltd. (SPIL) and Powertech Technology Inc. are expected to see second-quarter sales rise by anywhere between 8 and 25 percent on a quarter-on-quarter bases. ASE may see its second-quarter gross profit margin stand above 20 percent.

Tung Hung-si, chief finance officer of ASE, has predicted shipments in the second quarter may increase 15 percent over the first three months of the year. With an exchange rate of NT$29.4 against the U.S. dollar, the second quarter's gross profit margin may surpass that of last year's fourth quarter and approach that of 2011's third quarter.

According to analysts, ASE's second-quarter gross profit margin should be between 21.3 percent and 22.5 percent. “Surpassing 21 percent should not be a problem,” they said.

SPIL Chairman Lin Po-yuan, meanwhile, has predicted that sales for the second quarter may increase 7 to 11 percent over the first, at an exchange rate of NT$29.5 against the U.S. dollar. Its gross profit margin may stay between 16 and 18 percent in the April-June period while its operating profit margin may be between 9 and 11 percent.

Compared to SPIL, ASE will post a higher quarter-on-quarter sales increase for the second quarter because it had begun preparations for orders from independent device manufacturers earlier, analysts said.

“SPIL will not produce an immediate impact on ASE in the second quarter,” analysts said.

Powertech, meanwhile, is expected to see second-quarter sales unchanged from the first on an unconsolidated basis, said Chairman Tsai Tu-kung. Yet, with IC packaging sales from Greatek factored in, Powertech is expected to post a second-quarter consolidated sales increase of 20 to 25 percent from the first quarter, while gross profit margin may decline one to 1.5 percent from the same period.

According to analysts, the worst has been over for Powertech, which tests and packages dynamic random access memory (DRAM) chips. First-quarter earnings should be the company's lowest for the year, they said.

They attributed their optimism to Powertech's move to reshuffle its product mix, which now includes fewer DRAM chips for PCs yet more NAND chips, mobile DRAM chips and advanced logic chips mostly for smart and tablet devices. Analysts expected Powertech's move to help lift its price-to-book ratio.

King Yuan Electronics is expecting a 10- to 15-percent increase in second-quarter sales over the first three months due to increasing orders. According to analysts, King Yuan may post single-month sales of over NT$1 billion for each month in the second quarter.

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