Siliconware Precision Industries (SPIL), the world's third largest IC packaging and testing services provider, expects to post sales growth of 7-11% sequentially in the second quarter of 2012 with gross margin rising to 16-18%.

The global semiconductor industry will see continued modest growth in the second quarter, said SPIL chairman Bough Lin during an April 25 investors conference. Different market segments actually have uneven growth patterns, causing the industry recovery to stumble, Lin indicated.

For instance, the hard drive (HDD) sector is set to bounce back from supply disruptions caused by the flooding in Thailand in late 2011, whereas oversupply continues in the flash memory market, Lin observed. Even in the smartphone market alone, companies record mixed shipment performance with Nokia and HTC suffering declines while Apple and Samsung maintained their brisk results, Lin said.

Lin noted that he is sticking to the outlook given previously that improving economic conditions in Europe and the US, and strong growth in emerging markets will help the overall IC sector continue its rebound through the second half of 2012. The bottom for the year took place in the first quarter, Lin added.

SPIL announced consolidated revenues of NT$15.12 billion (US$509 million) for the first quarter of 2012, down 3.8% sequentially but up 4.5% from a year ago. Net profits for the quarter came to NT$891 million, showing decreases of 23.9% on quarter and 16.7% on year.

SPIL generated a 14.7% gross margin in the first quarter of 2012, compared to 16% in the prior quarter and 15.2% in first-quarter 2011.

In addition, launch of the Windows 8 and Intel's Ivy Bridge processors will stimulate demand for mobile PCs and smartphones in the second half of 2012, and simultaneously drive demand for semiconductors, Lin pointed out.

SPIL has seen customer inventory levels dragged down significantly, and acknowledges replenishment demand is picking up with clearer order visibility, Lin said. Backend houses including SPIL will likely step up their pace of expansion later in the second quarter as more customers demand additional capacity for high-end packaging and testing services, Lin revealed.

SPIL therefore has set a higher capex target for 2012 at NT$17.5 billion, according to Lin. The firm previously estimated its 2012 capex at NT$10.5 billion.