Apr

29

Margin pressure drags SPIL’s Q1 net income lower..

April 29, 2010 | Leave a Comment

Thursday, Apr 29, 2010,

Local chip packager Siliconware Precision Industries Co (SPIL, 矽品精密) said yesterday its first-quarter net income dropped 64.82 percent to NT$1.51 billion (US$48 million) from NT$4.3 billion in the previous quarter because of gross-margin pressure from rising gold prices and fluctuations in the exchange rate.

The first-quarter profit, however, soared 477.86 percent from NT$261.8 million a year ago, when the market was hit by weaker electronics demand amid the global financial crisis.

The diluted earnings per share was NT$0.48 in the first three months of the year, compared with NT$1.37 in the previous quarter and NT$0.08 the previous year, the company said in a statement.

SPIL is the world’s second-largest chip-packaging and testing company after Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), which is scheduled to release its first-quarter results tomorrow.

SPIL said its revenue dropped 10.5 percent to NT$15.69 billion in the first quarter from NT$17.53 billion the previous quarter, but rose 63.09 percent from NT$9.62 billion a year earlier. This resulted in a decline of 4.1 percentage points in gross margins to 16 percent in the first three months, from 20.1 percent three months earlier, it added.

The company’s board yesterday also approved a proposal to distribute NT$2.58 in cash dividend per share, which translate into a dividend yield of 6.4 percent as the stock closed at NT$40 yesterday.

SPIL’s stock has fallen 5.77 percent so far this year, compared with a decline of 0.51 percent on the benchmark TAIEX over the same period, the Taiwan Stock Exchange’s data showed.

Chairman Bough Lin (林文伯) yesterday told reporters SPIL’s second-quarter business outlook was positive, adding that higher demand would pull second-quarter factory utilization rates 5 percentage points higher and back to last year’s fourth-quarter levels across the board.

Under his estimate, the utilization rate would be 100 percent for wire-bonding packaging, 95 percent for flip-chip ball-grid-array packaging and 80 percent to 85 percent for IC logic testing equipment.

To compete with ASE, SPIL said it would follow suit by increasing copper wire bonders by 3,124 units by the end of the year, 900 more from the company’s previous estimate made on Feb. 3.

Even so, the company said it would maintain its capital expenditure at NT$14.3 billion for this year.
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