Advanced Semiconductor Engineering (ASE) expects sales of its core IC assembly test and material (ATM) business to register flat sequential growth in the fourth quarter, while sales of the company's EMS services will increase to almost the levels its IC ATM unit generated in the third quarter.

ASE also expects its IC ATM division to post flat gross margin growth sequentially in the fourth quarter, while the gross margin of its EMS unit will be slightly higher than the level reached in the first quarter of 2016.

Market watchers expect ASE's consolidated revenues to increase over 10% sequentially and hit a record high in the fourth quarter of 2017 with flat growth in gross margin, judging from the company's estimates given during an October 27 investors meeting.

ASE reported consolidated revenues increased 12% sequentially to NT$73.88 billion (US$2.45 billion) for the third quarter of 2017. Sales of the company's IC ATM business grew 7.2% on quarter to NT$41.86 billion, while those of its EMS services climbed a larger 17.3% to about NT$33.1 billion.

ASE's IC ATM unit posted a 25.1% gross margin in the third quarter, while its EMS division generated a 10.3% gross margin.

ASE announced consolidated revenues for the first three quarters of 2017 increased 4.4% from a year earlier to NT$206.46 billion, with a 18.37% gross margin. The company generated earnings per share of NT$2.08 in the nine-month period compared with the NT$1.79 reported for the same period in 2016.

In addition, ASE disclosed its proposed merger with Siliconware Precision Industry (SPIL) is still being reviewed by China's antitrust regulators. ASE's application submitted previously to China's Ministry of Commerce (MOFCOM) for its planned merger with SPIL was returned earlier in 2017, but ASE has revised and re-submitted the application.

ASE and SPIL have received approvals for their proposed merger from Taiwan and US antitrust regulators. The pair expects to complete the deal by the end of 2017.

ASE and SPIL in mid-2016 agreed to merge through the formation of a parent holding company, which will allow both firms to keep their legal entities and retain their existing operating models. The new holding company will own ASE through a share swap and acquire SPIL in an all-cash deal. Upon completion, both ASE and SPIL will be delisted while the holding company will trade its shares in Taiwan and ADS on the New York Stock Exchange.