IC packager Siliconware Precision Industries (SPIL) is stepping up capacity expansion efforts in 2012 with planned capital expenditure of a record NT$17.5 billion, chairman Bough Lin told the company's shareholders at a meeting on June 19.

SPIL will continue the current expansion pace in 2013 and 2014 - a critical period for the company to aggressively build new capacity, Lin said. SPIL is gearing up for a major showdown with its competitors, Lin noted.

SPIL over the past two years has been cautious about expansion, putting more effort into optimizing its product mix and equipment upgrades. The conservative approach has constrained sales growth, but has enhanced the company's overall business structure such as improving its cost competitiveness, Lin indicated.

Thanks to its previous efforts, SPIL is allowed to increase its gross margin and market share, strengthen relationships with its customers, and now is ready to move forward, Lin said.

In 2012 and the following two years, SPIL will focus on capacity building, Lin pointed out. The firm has turned aggressive in efforts to scale up its sales and profits, Lin said.

In addition to expansion at its Taiwan facilities, SPIL is also looking to expand capacity at its Suzhou, China plant by 50% in 2012. Once the new capacity comes online, the Suzhou unit will contribute about NT$800 million monthly to SPIL's overall sales compared to the current NT$600 million.

In response to speculation that macroeconomic woes might threaten to dampen demand later in 2012, Lin indicated that for the semiconductor industry primarily engaged in contract manufacturing, orders and company operations for the third quarter should remain brisk.

Lin reiterated his previous remark that the global IC industry would see its stumbling recovery in 2012. Both IC foundry and backend sectors will enjoy steady growth in the third quarter of the year, Lin continued. However, the outlook for the fourth quarter remains uncertain affected by macroeconomic factors, Lin added.

SPIL expects to have its monthly sales top NT$6 billion (US$201 million) during the second half of 2012 with gross margin averaging about 20%, Lin stated.

SPIL previously estimated that consolidated revenues for the second quarter of 2012 would register a 7-11% sequential increase with gross margin reaching 16-18%.

In other news, Lin claimed that SPIL will continue supporting the local foundry partners TSMC and UMC to jointly compete against Samsung Electronics. Samsung is unlikely to threaten Taiwan's IC supply chain in the short term, Lin said.