Top OSATS raise 2012 capex with test focus
The top three outsourced semiconductor assembly and test services (OSATS) providers raised 2012 capital expenditures during their earnings reports, from initial plans announced in January, report analysts at Citi.
To increase capacity due to mobility growth, Amkor (AMKR) raised capex from $300 million to $550 million; Advanced Semiconductor Engineering Incorporated (ASE) raised capex from $725 million to $800 million; and Siliconware Precision Industries Co. Ltd. (SPIL) raised capex from $350 million to $600 million. Collectively, the three companies increased 2012 capex by $575 million or 42% vs. January plans.
"Several of our major customers that sell into smartphones and tablets have substantially increased their demand forecasts with us and we are raising our estimate of 2012 capital additions...to meet these specific new opportunities. However, our sales and capital additions may vary depending on a number of factors including the supply of 28 nanometer wafers for some of our customers," said Ken Joyce, Amkor's president and CEO.
All three OSATS singled out test capacity addition as the focus of higher capex, with total test capex up from $280 million (in Jan plan) to $628 million, up 124% from the original plan. OSATS commented that baseband and power management ICs are the main driver. Citi expects Teradyne to get a sizable share of the orders due to its 60% share in mobility.
The current capex plan for these top 3 OSATS is slightly H1 loaded, with 55% of planned capex earmarked for the first half of 2012. However, with low/unstable yield at 32/28nm fabs, and a large amount of capacity entering the market starting in Q3, there is a general concern over skyrocketing test burden in H2. Citi expects this could drive the upside in H2 of OSATS test capex.???M.C.
Solid State Technology, Volume 55, Issue 5, June 2012