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April 30, 2017

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IC packaging and testing firms might soar in Q2: experts

TAIPEI--Taiwanese integrated circuit (IC) packaging and testing services providers are expected to see their sales pick up in the second quarter on the back of solid demand for mobile devices, helping them emerge from slow-season effects seen in the previous quarter, market analysts said.

Rising popularity of smartphones and tablet computers in the global market is expected to boost demand for high-end IC packaging and testing services in the current quarter, the analysts said.

China is gearing up to develop its 4G telecom services, which is expected to lift demand for wireless communication chips and memory chips to eventually increase demand for IC packaging and testing services, they said.

With the global semiconductor industry staging a strong technical rebound in the second quarter after inventory adjustments in the previous quarters, the IC packaging and testing sector is expected to benefit from the uptrend, the analysts said.

Siliconware Precision Industries Co., one of Taiwan's leading IC packaging and testing services providers, expects the market supply to become tighter on strong demand for mobile devices, they said.

Last month, Siliconware announced it has raised a budget plan by hiking capital expenditure for 2014 significantly to NT$14.7 billion (US$485 million) from the previously proposed NT$5.1 billion.

The company said demand for both bumping services and flip chips has been on the rise, and that it expects its capacity utilization for producing flip chips and offering bumping services will increase accordingly.

For its part, Advanced Semiconductor Engineering Inc. (ASE), the world's largest IC packaging and testing services provider, is also expected to ride the wave of growing shipments in mobile devices to boost its sales for the second quarter.

In addition, ASE, which accounts for about 30 percent of the global IC packaging and testing sales, is likely to get permission from the authorities to have its K7 plant in Kaohsiung restore operations at the end of April at the earliest, which could further boost the company's revenue in the second quarter.

ASE was ordered to shut down part of the K7 plant's operations in December due to pollution problems.

King Yuan Electronics Co. is expected to see orders piling up into June, in particular in testing services for communication ICs, logic ICs, drive ICs and imaging sensor chips, analysts said.

They said Powertech Technology Inc.'s order backlog is likely to continue to July and that the company will post revenue gains due to rising packaging and testing demand for services for specialty memory and mobile memory chips.

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