Memory IC packaging and testing house Powertech Technology (PTI) has reported better-than-expected revenue and EPS results for the second quarter of 2012. But looking forward, the firm expressed caution about its performance in the third quarter, citing disappointing PC sales that hurt its DRAM business, as well as unfavorable economic conditions particularly in Europe.

Demand for commodity DRAM has been a disappointment due to a shrinking PC market, which therefore will prompt the memory chipmakers to scale down their output and deal with inventory corrections starting the third quarter, chairman DK Tsai told a company shareholders meeting on July 31. Such unfavorable development will have a significant impact on PTI's DRAM packaging and testing business during the second half of 2012, Tsai indicated.

On the contrary, sales generated from orders for mobile DRAM have grown steadily, Tsai noted. The mobile DRAM sector is expected to continue its growth momentum in the second half of 2012, according to Tsai.

As for flash memory, Tsai expressed optimism indicating demand coming from the smartphone, tablet PC and SSD sectors will buoy the market in the second half of 2012.

Tsai did not provide PTI's sales guidance for the third quarter, but estimated that sales of DRAM packaging and testing would suffer a sequential decrease. Tsai reiterated that PTI continues to reduce its exposure to the standard DRAM market.

DRAM products accounted for 51% of PTI's overall sales in the second quarter of 2012, down from 64% in the prior quarter and 74% a year ago. The proportion is set to slip below 50% in the current third quarter, according to Tsai.

In addition, Tsai indicated that PTI has been enhancing its offerings for logic semiconductors. The company has developed high-end technologies for logic ICs including wafer-level, copper pillar bump, TSV and RDL (redistribution line) packaging, and will continue to expand the business to support its long-term sustainable growth, according to Tsai.

PTI announced consolidated revenues of NT$11.9 billion for the second quarter of 2012, up 36% on quarter, with net profits reaching NT$1.32 billion. EPS for the quarter came to NT$1.66, compared to the NT$1.42 posted for the prior quarter.

For the first half of 2012, PTI generated net profits of NT$2.46 billion or NT$3.08 a share. Profits, however, show decreased compared to a year earlier when net profits arrived at NT$3.53 billion or NT$4.86 per share.