BY JEFFREY C. DEMMIN
All of the numbers were positive and growing at the major assembly and test subcontractors at the end of 2003. Each of the eight companies covered here had increased revenue in the fourth quarter, a profit to report, and higher revenue for the year compared to 2002.
The biggest recent news among the subcontractors was the announced merger of STATS and ChipPAC. Each of them saw a 22 percent revenue gain in the fourth quarter of 2003, and the combined revenue of the resulting company would have put it in third place behind ASE and Amkor. This deal puts a significant gap between the top four subcontractors and the rest of the pack (Table 1).
At the top of the pack now is ASE, which pulled ahead of Amkor with 28 percent growth in revenue in the fourth quarter of 2003. ASE reported a further diversification of its customer base, with 35 percent of its revenue coming from its top five customers, compared to 43 percent a year ago. ASE's top ten customers made up 52 percent of its business in Q4, down from 60 percent in Q4 of 2002. ASE also added more than 400 wirebonders in Q4, bringing its total to 5,230.
STATS ran its streak of quarterly revenue growth to nine quarters, resulting in an overall growth of 69 percent for 2003 compared to 2002 (Figure 1). This was almost twice as much as the next fastest growing major subcontractor, which was ChipMOS at 37 percent. ChipMOS saw only modest growth in the fourth quarter, but demand for its LCD driver assembly services allowed the company to raise its prices by 20 to 25 percent.
Other numbers moving upward were headcounts and capacity utilization. SPIL, for example, increased its workforce by about 7 percent during the quarter. SPIL reported 95 percent utilization of its assembly capacity, and Amkor also saw about 90 percent utilization.
Looking forward, every company is optimistic about 2004. ASAT predicted 4 to 8 percent revenue growth in the first quarter of 2004, in part due to the opening of a facility in China. ASAT also cited several application areas that have been particularly strong, including Wi-Fi, networking, PC peripherals, RF, test equipment and wireless handsets. ChipPAC was very positive as well, projecting 30 percent growth for 2004. A big area for growth at ChipPAC is in stacked packages, with a 50 percent increase expected in 2004.
At the height of the current boom, it is interesting to look back at the change from the beginning of 2002 to the end of 2003. STATS, for example, had three times the revenue in the fourth quarter of 2003 compared to the first quarter of 2002. ASAT more than doubled, and the others were not far behind. This trend will of course slow down, but for now we are in a pretty good time for the industry.
JEFFREY C. DEMMIN, director of product marketing, may be contacted at Tessera Technologies Inc., 3099 Orchard Dr., San Jose, CA 9134; (408) 383-3691; e-mail: email@example.com.