Powertech Technology (PTI) expects its revenues to increase by a low single-digit percentage point sequentially in the fourth quarter of 2016, which will mark the second consecutive quarter of record revenues for the packaging and testing company.

Overall market conditions are improving, said PTI president Hung Jia-yu at an October 25 investors meeting, adding that the company's shipments for DRAM and NAND flash memory have been rising.

PTI is relatively conservative about its shipments for logic ICs, which will stay flat or grow slightly in the fourth quarter, Hung indicated. Shipments for conventional and BGA packages are being affected by still-tight supplies from foundries.

Meanwhile, PTI's shipments for bumping and flip-chip packaging will grow in the fourth quarter, Hung disclosed. The company is also engaged in low-volume production for TSV and 3D products, Hung added.

PTI has reported net profits of NT$1.64 billion (US$51.9 million) for the third quarter of 2016, the highest quarterly levels since the second quarter of 2011. EPS for third-quarter 2016 came to NT$1.70 compared with NT$1.45 in the prior quarter and NT$1.42 a year ago.

PTI posted record consolidated revenues of NT$12.76 billion for the third quarter of 2016, while gross margin climbed to 22.5% from 21.5% in the second quarter and 19.2% during the same period in 2015.

Sales generated from the memory IC sector accounted for 73% of PTI's total revenues in the third quarter, while those from the logic IC segment made up the remaining 27%.

PTI's revenues for the first three quarters of 2016 increased about 14% from a year earlier to NT$34.69 billion, while gross margin grew 2.6pp on year to 21.2%.

PTI generated net profits of NT$4.26 billion for the first three quarters of 2016, up 19.3% on year, with EPS reaching NT$4.36 compared with NT$3.62 a year ago.

In addition, PTI unveiled its capex for 2016 will reach NT$15 billion, and capex for 2017 will also stay high in order to build up its advanced packaging technology capability over the next two to three years.

PTI will shift gradually its production lines for standard DRAM to its new plant in Xian, China, where the company will also continue to enhance its testing offering for SSDs, according to Hung. At its plant in Hsinchu, northern Taiwan, PTI will build new production capacity for fan-out packaging while expanding further capacity for FC and bumping.

PTI's new fan-out packaging offering will be ready for small-volume production as early as the second quarter of 2017, Hung said.