Memory and logic IC backend house Powertech Technology (PTI) expects to post sequential growth in revenues for both the third quarter and the second half of 2019, judging from recovery in its factory utilization rates.
PTI expects to see its packaging utilization rate rise above 80% on average in the third quarter, up from 70% in the second, while the utilization rate for its testing segment will hover between 60-70% compared with 60% in the prior quarter. Meanwhile, the backend firm expects to utilize 100% of its capacity for mobile memory products in the third quarter.
Higher utilization rate will lift PTI's gross margin in the third quarter, said the backend house, adding that the company is optimistic about its overall financial outlook for the quarter as well as the second half of this year.
PTI expects to see demand for memory chips and logic ICs recover in the third quarter, particularly demand for flash products used in smartphones and data center applications.
PTI reported net profits grew 4.8% sequentially to NT$1.1 billion (US$35.5 million) in the second quarter, with EPS coming to NT$1.42. EPS for the first half of 2019 arrived at NT$2.78.
PTI saw its gross margin climb 1pp on quarter to 17.2% in the second quarter, while revenues increased 4.5% to NT$15.08 billion.
PTI's revenues fell 10.9% from a year earlier to NT$29.51 billion in the first half of 2019, while gross margin slid 4.1pp on year to 16.7%. The company generated NT$2.78 in EPS, down 27.2% from the same period in 2018.
PTI expects to its sales to peak in the second half of 2019, driven by a seasonal pick-up in flash demand for smartphones, PCs and other mass-market devices, as well as demand for niche-market DRAM demand for crypto mining and graphics DRAM. Nevertheless, the backend firm may fail to see its financial results for all of 2019 outperform 2018 levels due to a number of negative macro factors.
In addition, PTI is on track to open its new plant dedicated to fan-out panel-level packaging (FOPLP). Equipment move-in is scheduled to kick off at the end of 2020 followed by volume production in 2021, according to company chairman DK Tsai.
A total of NT$50 billion (US$1.62 billion) will be invested in the new plant, which will be dedicated to providing advanced system-level and 3D IC packaging, Tsai said.
Article translated by Jessie Shen
