Semiconductor assembly and testing heavyweights upbeat over H2
By Ted Chen, The China Post
July 31, 2014, 12:00 am TWN
TAIPEI, Taiwan -- Semiconductor testing and assembly companies Advanced Semiconductor Engineering (ASE, 日月光) and Siliconware Precision Industries Limited (SPIL, 矽品) yesterday hosted their respective earnings conferences, each expressing an upbeat outlook over the second half of this year.
ASE Records Q2 EPS of NT$0.64
Over the second quarter, ASE yesterday recorded revenues of NT$58.615 billion, up 7 percent quarter-on-quarter, and after-tax net income of NT$5.094 billion, up by 48 percent quarter-on-quarter, and yielded earnings-per-share performance of NT$0.64. Over the period the company generated revenues of NT$39.266 billion from its integrated circuit testing and materials sales, up by 14.3 percent year-on-year, with profit margins improving to 27 percent from the previous quarter's 24 percent.
Among its testing services revenues, telecommunication products contributed 50 percent of sales, while PCs and automotive products contributed a 12 percent and 38 percent portion, respectively.
The company stated that based on order volumes from its clients, it is optimistic on performance prospects over the second half of this year, while forecasting a 4 percent increase in capacity utilization in the third quarter.
In addition, ASE noted that revenues contribution from its system-in-chip (SiP) assembly service is expected to rise to 20 percent of overall sales before the end of this year, while emphasizing that the company is prepared to face growing competition from China-based rivals, amid consolidation rumors of Jiangsu Changjiang Electronics Technology Co.'s (長電) intend to acquire STATS ChipPAC Ltd. (星科金朋). According to the company, the rumored development represents a short-term variable, and that it will use the opportunity to examine ASE's leading edge in the field, and take on anticipated challenges.
In the third quarter, foreign institutional investors remarked that ASE's overall sales performance is expected see quarter-on-quarter growth of more than 15 percent, propelled by an anticipated 30 percent growth in electronic manufacturing service revenues, and a 6 to 9 percent improvement in IC testing and material sales.
JPMorgan Expresses Misgivings
JPMorgan Chase however, stated that ASE's client orders may be poached by U.S.-based Amkor Technology, who recently recorded stellar second quarter earnings of US$50 million, vastly exceeding the US$30 million seen in the previous period. Most notably, Amkor announced the company's intent to ramp up its capital expenditure by US$100 million, reaching US$675 million, a move believed to be a part of preparations in anticipation of voluminous orders from Apple ahead of the iPhone 6 handset's release.
Monthly revenues to hold above NT$7 billion: SPIL
Meanwhile, SPIL stated that amid a rebound throughout the global semiconductor sector, the company is expecting monthly revenues are expected exceed NT$7 billion in the remaining six months of this year.
The company over the second quarter accumulated record-high sales of NT$21.928 billion, up by 21.4 percent quarter-on-quarter. Net income over the period rose by 61.2 percent, reaching NT$3.371 billion, and yielded earnings-per-share performance of NT$1.08, exceeding institutional investors' expectations.