Robust demand for flash memory chips will buoy further sales performance at Powertech Technology (PTI) in the fourth quarter of 2017, said the memory backend specialist at an October 23 investors meeting. PTI expects to post another sequential revenue growth in the fourth quarter.

For all of 2017, PTI's revenues are set to register another double-git increase, according to company president JY Hung.

PTI reported consolidated revenues of NT$16.33 billion (US$539.9 million) for the third quarter of 2017, up 17.2% sequentially and hitting a record high for the second consecutive quarter. Gross margin came to 21.1% in the third quarter, up 0.2pp on quarter but down 1.4pp from a year earlier. The company generated earnings per share of NT$2.08 in the third quarter compared with NT$1.81 in the second quarter and NT$1.70 in third-quarter 2016.

For the first three quarters of 2017, PTI's consolidated revenues increased 23.7% on year to NT$42.92 billion, while gross margin stayed flat at 21.2%. EPS for the nine-month period reached NT$5.39 compared with NT$4.36 a year ago.

The rollouts of new smartphones during the fourth quarter are set to boost memory and logic IC demand, Hung indicated. Hung also expressed optimism about demand for consumer electronics, communication and automotive devices in the fourth quarter.

The markets for both DRAM and NAND flash memory chips remain tight, Hung indicated. For the supply of NAND flash memory, chipmakers are expected to increase substantially their output built using 3D NAND technology which will be stimulating backend demand for NAND flash chips in the fourth quarter, Hung said.

DRAM demand for servers, consumer electronics and mobile devices has been strong while flash demand has been robust for eMCP/eMMC devices, and SSDs, Hung indicated.

As for logic chips, demand will grow outperforming seasonal patterns in the fourth quarter, Hung noted. PTI has expanded its logic backend offering to include SiP and FC packaging, and grown its customer portfolios in the US and Japan, Hung said.

In addition, in response to Toshiba's transfer of ownership of its flash memory unit, PTI chairman DK Tsai commented it will have no impact on the company's existing relationship with Toshiba's memory unit. Tsai also expressed more optimism about the development of PTI's future relationship with Toshiba Memory.

Tsai indicated Toshiba is among PTI's shareholders and board of directors in addition to being a long-term partner. Kingston Technology, which is included in the consortium led by Bain Capital set to take over Toshiba Memory, is also one of PTI's founding shareholders, Tsai said.

Micron Technology's planned backend facility in Taiwan will also have no impact on PTI's operations, said Hung during the Q&A session of the company's investors meeting. PTI will manage to maintain its strategic partnership with Micron in the future.

Earlier in 2017, PTI struck a deal with Micron to fully acquire Micron Akita, Micron's assembly and test plant in Japan, and another agreement with the US vendor to take up its stake in Japan-based wafer testing specialist Tera Probe. PTI has started recognizing part of the revenues from Tera Probe and all the revenues from Micron Akita.

Micron's planned backend facility in Taichung, central Taiwan will be engaged in the development of advanced packaging technologies including wafer-level packaging and 3D IC integration for leading-edge DRAM products.