ASE expects weak growth for 3Q08; plans capex cut

Ingrid Lee, Taipei; Rodney Chan, DIGITIMES [Wednesday 6 August 2008]


Packaging and testing house Advanced Semiconductor Engineering (ASE) expects its revenues to grow only 1-3% in the third quarter because of the weak global economy, and plans to reduce its capex for 2008, according to company CFO Joseph Tung.

ASE reported that consolidated revenues for the second quarter rose 3.7% sequentially to NT$25.61 billion (US$832.3 million), while gross margin rose slightly to 25.4% in the second quarter from 25.1% in the first.

Operating margin for the second quarter was 14%, compared to 13.6% for the first quarter. Net income for the second quarter amounted to NT$2.41 billion.

Tung said margins and utilization rates in the third quarter will stay flat compared to the second quarter.

Tung said demand from the networking segment will be weaker than others because of inventory issues, and the segment's share of ASE's revenues will drop in the third and fourth quarters.

While demand from the consumer and car electronics segments will stay flat, the PC segment will be the only one to see steady growth, he added.

Tung said as demand will be weaker than expected, ASE plans to reduce its capex for 2008 to NT$350-370 million from the originally estimated NT$400-450 million.

For the semiconductor industry, 2008 is a difficult year compared to 2007, but the packaging and testing sector has been relatively stable because major players have refrained from over-expanding, the ASE CFO said.

Despite the conservative outlook for the second half of the year, ASE still expects growth quarter by quarter through 2008, he said.




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