ChipMOS Technologies expects to see tight production capacity for COF (chip-on-film) packaging in 2018, and is optimistic about demand for NOR flash and niche-market DRAM memory.

ChipMOS' production capacity for COF packaging is estimated at 6,500-7,000 wafers monthly. Demand for 12-inch fine-pitch COF packaging has been strong, said company chairman Shih-Jye Cheng, adding that ChipMOS' COF packaging can also be applied to the production of OLED panel driver ICs.

ChipMOS is reportedly working with a Korea-based client in the development of OLED driver ICs. The backend house is also involved in the chip samples delivered by its Taiwan-based clients, industry sources have observed.

ChipMOS expects its shipments for OLED driver ICs to scale up in the second half of 2018, Cheng indicated, without elaborating further.

In addition, Cheng expressed optimism about demand for niche-market DRAM memory for automotive electronics, industrial and high-end mobile devices in 2018. ChipMOS has also entered the supply chain of cryptocurrency mining firms by obtaining orders for niche-market DRAM chips from its fabless clients, Cheng indicated.

Meanwhile, ChipMOS has enjoyed strong demand for auto NOR flash memory, Cheng continued. The backend house's manufacturing lines for NOR flash chips have run at full utilization rates since the second half of 2017, Cheng said.

ChipMOS' revenues should have hit bottom for 2018 in February, and are expected to grow starting March through the end of 2018, according to Cheng. The backend house's increased focus on the auto and industrial segments will also boost company profitability for the year, said Cheng. As a proportion of company revenues, auto- and industrial-use products have arrived at about 10% and 8-10%, respectively.

ChipMOS will maintain its capex/revenue ratio at between 15% and 20%, and capex for 2018 will be mainly for COF packaging for narrow-bezel OLED panel driver ICs and other display driver IC products, Cheng noted.

ChipMOS' net profits surged 97.5% on year to NT$3.03 billion (US$103.9 million) in 2017, with EPS reaching NT$3.50 compared with NT$1.76 in 2016. Net profits were driven by recognized gains from the sale of part of its ChipMOS Shanghai stake in addition to growing operating profits.

In March 2017, ChipMOS completed the sale and transfer of 54.98% equity interests of its former wholly-owned subsidiary ChipMOS Shanghai to Tsinghua Unigroup-led strategic Investors. About NT$1.8 billion was recognized from the sale.