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OSE looks to swing back to profitability in 2018
Source: DIGITIMES   Editor: Helan   Update Time :2017/11/22 17:06:50

Memory backend specialist Orient Semiconductor Electronics (OSE) is looking to return to profitability by the first half of 2018 due partly to increasing packaging and testing orders for logic ICs and from EMS clients, according to industry sources.

OSE experienced a difficult time in the first three quarters of 2017, during which it suffered net losses of NT$414 million (US$13.77 million) and negative EPS of NT$0.51 on total revenues of NT$10.323 billion.

Industry sources said that the rising prices seen for DRAM and flash memory chips are not necessarily good news for backend specialists, as it means tight supply of the memory chips, and only those backend players who have good relationships with customers will see sufficient orders.

Although OSE has Longsys, Kingston and Phison Electronics among its major shareholders, the majority of orders came from other memory module makers plagued by wafer shortfalls, which resulted in the company's failure to benefit from the booming memory market in the first three quarters of the year.

The sources said that supply tightness for NAND flash is expected to ease significantly in the first half of 2018, when the market for consumer devices will enter the traditional slack season. This, coupled with the proper adjustment of the memory module capacity by Kingston, is likely to help OSE return to profitability by next June.

OSE is also expected to score better revenue performance in the fourth quarter than in the first three quarters of 2017, supported by increasing orders for logic chips packaging and testing and from the EMS sector, which are expected to last into the first half of 2018. The firm's monthly revenues for October rebounded 2.46% on month to reach NT$1.228 billion.

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