Chip packaging and testing house Siliconware Precision Industries (SPIL) saw net profits for the first quarter of 2010 decline 60% sequentially to NT$1.51 billion (US$48.31 million). Gross margin for the quarter slid 4.1pp to 16%, below market expectations.
SPIL has attributed the sequential 60% drop in first-quarter profits to falling product ASPs, resulting from rising gold prices and changes in the currency exchange rate.
However, net profits for the first quarter represent a 478.2% jump compared to profits of NT$262 million in the same quarter of 2009, when SPIL's gross margin dipped to 9.5%. SPIL generated net sales of NT$15.69 billion in first-quarter 2010, down 10.5% sequentially but up 63.1% on year.
Sales from the consumer electronics sector contributed 19% of SPIL's first-quarter revenues, up from 17% in the fourth quarter of 2009. Sales from both PC and memory IC sectors slid 1pp on quarter to 21% and 13%, respectively, whereas the communications segment remained flat at 47%.
At its quarterly investors conference on Wednesday, SPIL chairman Bough Lin forecast that demand across the communications and memory sectors will grow sequentially in the second quarter, but the PC segment will drop slightly.
SPIL will utilize 100% of its wire bonding capacity this quarter, up from 95% in the first quarter, Lin said. Second-quarter utilization rates of its flip-chip (FC) ball-grid array (BGA) packaging and logic IC testing capacity will reach 95% and 85%, respectively, Lin indicated.
However, Lin pointed out that the company's ASP and gross margin may still be affected by gold prices and foreign exchange losses in the second quarter.
Lin noted that the company's capex plan for 2010 remains unchanged at NT$14.3 billion. SPIL's expenditure is estimated at NT$5-5.5 billion in the second quarter, and the company will spend more in the third for making progress towards copper processing for wirebonding production, according to Lin.
SPIL plans to install 450 sets of copper wirebonders in the second quarter, and another 900 in the third, said Lin. It has also placed orders for 900 sets of copper wirebonders that will arrive in the fourth quarter, Lin added.