Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) have reported consolidated December sales of NT$4.14 billion (US$125.16 million) and NT$2.65 billion, respectively, both representing a sequential decrease of over 30%. ASE's fourth-quarter sales dropped 29.1%, and SPIL had a 27.8% decline. Credit Suisse estimates both companies' utilization rates will continue to fall resulting in another 20-30% sales decline in the first quarter of 2009. It also forecasts ASE is to see losses in 2009.
Due to weak market demand, IDMs have withdrawn outsourcing orders and utilization rates at ASE's subsidiary DRAM maker Power ASE have dropped to below 30%, impacting ASE's consolidated sales. Although Credit Suisse estimates ASE's fourth-quarter gross margin at 15% or more, it may still see losses because of the company's huge expenses.
Affected by shrinking orders from MediaTek and graphics chips, telecom chips, NAND flash and PC chipsets, SPIL's sales in the fourth quarter saw a 27.8% decline. Credit Suisse estimates SPIL's operating profit margin in the fourth quarter at 7-9%, in line with company expectations.
For the first quarter of 2009, Credit Suisse forecasts sales at ASE are to decline 20-30% and those at SPIL will decrease 25%. The two companies may see losses and negative operating profit margins in the first quarter. Since SPIL has smaller revenues contributions from the DRAM segment and IDM customers, SPIL will have less risk during the current economic situation, while ASE may see losses for the whole year of 2009, predicted Credit Suisse.
Article translated by Meiling Chen
