ChipMOS frontloading capex for Spansion, staying cautious

March 15, 2006 – ChipMOS Technologies Ltd. posted a profit of $14.5 million on revenues of $130.4 million in 4Q05, up from a $3.2 million profit and $112.0 million in sales in the same period a year ago. For the year, profits fell by 45% to $28.3 million, with sales up 1% to $463.1 million. ChipMOS chairman and CEO S.J. Cheng noted that the 12% quarter-on-quarter revenue growth in 4Q05 was due mainly to higher utilization rates for memory and LCD driver IC production, and overcame revenue delays resulting from mergers of two subsidiaries.

Cheng indicated the company will invest $100 million in 2006 for its Chinese operations, and another $140 million to support new business with Spansion LLC for DDRII testing and 300mm assembly capabilities. About $50-$100 million will be invested in routine LCD driver IC capacity in ChipMOS’ Taiwan operations. He added that about 60%-65% of the company’s capex investments will occur during 1H06, with no expectation of expanding planned investments through the year — “we remain very conservative and have no intention to invest more than we have to. We do not plan to invest in areas not tied to specific customer programs,” he stated.

Projecting overall 2006 business, Cheng forecasts “significant revenue growth” in flash, DDR II DRAM, and LCD driver sales, with no decrease in demand this year. Demand during the traditionally slow first quarter remains high, he added, projecting revenues to be roughly flat at $127-$130 million, with gross margins falling slightly to 28%-30%, vs. 31% in 4Q. “We currently believe a gross margin at the high 20% level is sustainable as we focus on higher margin business, while benefiting from increased utilization rates,” Cheng stated.

POST A COMMENT

Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.

Leave a Reply

Your email address will not be published. Required fields are marked *

NEW PRODUCTS

KLA-Tencor announces new defect inspection systems
07/12/2018KLA-Tencor Corporation announced two new defect inspection products at SEMICON West this week, addressing two key challenges in tool and process monit...
3D-Micromac unveils laser-based high-volume sample preparation solution for semiconductor failure analysis
07/09/2018microPREP 2.0 provides order of magnitude time and cost savings compared to traditional sample...
Leak check semiconductor process chambers quickly and reliably
02/08/2018INFICON,a manufacturer of leak test equipment, introduced the UL3000 Fab leak detector for semiconductor manufacturing maintenance teams t...