Powertech Technology (PTI) has disclosed plans to expand production capacity for advanced packaging, citing promising demand for technologies such as panel-level packaging. The backend firm added its advanced packaging investment project will run through 2025.

PTI will break ground on new production lines for advanced packaging later in the third quarter, company chairman DK Tsai said during an investors conference on July 24. The new capacity will come online to satisfy robust demand for IoT and other devices in 2019 and 2020, according to Tsai.

PTI will also continue enhancing its advanced packaging capability, and is gearing up for demand through 2025 with a set technology roadmap, Tsai indicated.

PTI expects to post another sequential increase in revenues for the third quarter, said company president Jia Yu Hong. The company's packaging utilization rate will be between 85% and 90% in the third quarter, while its testing utilization rate is estimated at about 80%.

Testing demand for NAND flash memory and SSDs, as well as logic IC packaging demand, will be driving PTI's revenue growth in the third quarter, according to Hong.

Memory demand for high-end handsets, data centers, communications and automotive electronics applications will grow in the third quarter while that for PCs, tablets and notebooks will slow down, Hong indicated. Meanwhile, consumer DRAM demand for gaming devices, TVs and IoT will register stable growth.

ASIC demand for cryptocurrency mining is likely to rebound at the end of the third quarter, Hong said. Hong also expressed optimism about emerging demand for 5G, big data and AI applications.

PTI reiterated its previous capex estimate for 2018 of about NT$15 billion (US$490 million).

PTI reported net profits increased 30% sequentially and 19% from a year earlier to NT$1.68 billion in the second quarter of 2018, while consolidated revenues climbed to a record high of NT$17.21 billion. The company generated EPS of NT$2.16 in the second quarter, compared with NT$1.66 in the prior quarter and NT$1.81 in second-quarter 2017.

PTI utilized 80-85% of its packaging capacity and 75-80% of testing capacity in the second quarter of 2018, when the company saw its gross margin climb 0.8pp on quarter and 0.3pp on year to 21.2%. Favorable currency exchange rates were another contributor to PTI's gross margin improvement.

PTI's operating margin came to 15.2% in the second quarter of 2018, up 0.5pp on both sequential and on-year bases. The company generated operating profits of NT$2.61 billion in the second quarter, up 11.4% sequentially and 27% from a year earlier.

For the first half of 2018, PTI's consolidated sales grew 24.6% from a year ago to NT$33.12 billion while gross margin slid 0.5pp on year to 20.8%. The company generated operating profits of NT$4.95 billion in the six-month period, with operating margin slipping 0.5pp from a year earlier to 14.9%.

PTI posted net profits of NT$2.97 billion in the first half of 2018, up 15.3% on year, with EPS reaching NT$3.82.