Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest chip tester and packager, yesterday posted its weakest net profit in three quarters, dragged by weaker-than-expected demand in its system-in-a-package (SiP) business.
ASE provides SiP services for fingerprint modules used in Apple Inc’s iPhones, as well as in wearable devices for other clients.
During the quarter ending March 31, net income contracted 17 percent to NT$4.16 billion (US$128.87 million) from NT$4.99 billion in the previous quarter and declined 7 percent from NT$4.47 billion the previous year.
Despite the decline, net income in the first three months of the year surpassed the NT$3.27 billion projected by BNP Paribas SA analyst Szeho Ng (吳思浩).
Gross margin slid to 22 percent in the first quarter from 26 percent in the previous quarter, with ASE attributing the decline to fewer SiP orders.
The company expects SiP demand to remain weak through this quarter because of seasonal factors, and for its core chip packaging and testing business to see mild single-digit percentage growth from last quarter’s revenue of NT$35.54 billion.
Revenue from its electronics manufacturing business is forecast to decline moderately this quarter from the previous quarter’s NT$24.75 billion, the company said.
“We see a recovery in the second quarter. We believe our chip testing and packaging business will have mild growth, bringing it back to fourth-quarter levels,” chief financial officer Joseph Tung (董宏思) said.
The recovery should be across the board, with the automotive segment posting stronger growth, Tung said.
The communications segment will be relatively weaker due to tepid demand for SiP services, the executive said.
The SiP business, which accounted for 20 percent of ASE’s revenue last year, should pick up in the second half of this year, as customers launch their second-generation products, Tung said.
ASE said it is adjusting its SiP strategy by focusing on higher-margin products — rather than volume growth — to enhance returns on investment.
SiP gross margins are lower than overall margins, it said.
SinoPac Securities Investment Services Co (永豐投顧) forecast that ASE’s second-quarter revenue would increase 11.3 percent to NT$69.42 billion from NT$62.37 billion last quarter.
Separately, ASE on Thursday announced that it plans to acquire a 20.52 percent stake in Deca Technologies Inc for US$59.88 million, in a bid to speed up its expansion into next-generation integrated fan-out (InFO) packaging technology.
To obtain technology patent licensing from Deca, ASE is to pay US$12.5 million and an unspecified amount of royalties.
Tung said the company would start the technology transfer from Deca this year and he expects Deca to contribute meaningful revenue from next year.
VALUABLE STOCK: The company closed at NT$1,005 a share, on demand for AI and HPC chips, and is expected to issue a positive report during its earnings conference Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares rose 2.66 percent to close at a record high of NT$1,005 yesterday. as investors expect the company to continue benefiting from strong demand for artificial intelligence (AI) and high-performance computing (HPC) chips. TSMC is the 19th member of the local bourse’s NT$1,000 stock club, which includes smartphone chip designer MediaTek Inc (聯發科) and electric transformer manufacturer Fortune Electric Co (華城電機). Yesterday’s rally swelled TSMC’s market capitalization to NT$26.06 trillion (US$802.3 billion) and contributed about 211 points to the TAIEX, which closed up 350.1 points, or 1.51 percent, to 23,522.53, another record high, Taiwan Stock
The waves of the Aegean Sea lap gently at the tables and chairs of two beach restaurants on Greece’s Halkidiki peninsula. It is an idyllic scene, but one that is totally illegal. Like many others in Greece, the two establishments on Pefkochori Beach do not have a license to set up shop so close to the water. After a wave of protests last summer by locals about bars and restaurants illegally covering beaches with sunbeds and tables, the Greek state is taking action. It is cracking down on rogue tourist practices with surveillance drones, satellite imagery and a special app
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor