Power ASE Technology, a subsidiary of Advanced Semiconductor Engineering (ASE) specializing in DRAM packaging and testing, has announced that the company has sold some of its high-speed testers to Powertech Technology (PTI) for about NT$750 million (US$26 million). The recognized gain is estimated to be worth NT$67 million.
Market observers identify the sale as Power ASE's attempt to phase out the DRAM backend business. Power ASE is likely to be integrated with its parent company in the future, the observers believe.
ASE CFO Joseph Tung in April pointed out that if Power ASE runs at a very low utilization rate and suffers resulting losses, the subsidiary would have to undergo capacity adjustments and may end up merging with the parent company.
Power ASE reported revenues of NT$3.3 billion on net profits of NT$926 million for 2010. The earnings translated into an EPS of NT$2.31.
Power ASE is a major backend production house for Powerchip Technology, which is looking to shift all of its commodity DRAM capacity to Elpida Memory on an OEM basis and place a heavy emphasis on its foundry business.