Semiconductor packaging and testing company Silicon Precision Industries (SPIL) has forecast revenues will decrease 4-8% sequentially in the fourth quarter of 2011, citing slowing demand from its clients. Utilization rates of its wire bonding, flip-chip (FC) packaging and logic IC testing capacity will all drop 5pp sequentially in the fourth quarter, according to company chairman Bough Lin.
SPIL will also see its gross margin and operating margin drop slightly on quarter, said Lin. In the third quarter, the company's gross margin and operating margin stood at 15.2% and 8.2%, respectively.
Customers are generally cautious about building inventory amid the economic uncertainty, Lin indicated. However, short lead-time orders are likely to emerge between November and December, which will further support SPIL's sales performance for the final quarter of 2011, Lin said.
Companies that supply semiconductors for new consumer technology products such as smartphones, tablet PCs and ultrabook devices could increase their short-term orders ahead of the year-end shopping season, Lin anticipated. The present circumstances have actually discouraged them from replenishing stockpiles in advance, Lin said.
Lin also pointed out that the ongoing flooding in Thailand may cause disruptions in the global electronics supply chain. Affected companies will inevitably adjust their orders and product rollout plans casting shadow over the industry outlook for the rest of 2011, Lin said.
Lin remarked previously that the overall semiconductor sector would see a flat or slight increase sequentially in the second half of 2011, and the growth forecast for the entire year was maintained at 4-6%. Lin has not made revisions to the estimates.
Looking into 2012, Lin predicts the semiconductor industry will see mid-single-digit growth.
SPIL generated consolidated revenues of NT$16.33 billion (US$542 million) in the third quarter, up 10.8% on quarter and beating its targeted 2-6% growth. Net profits for the quarter rose 30.8% sequentially to NT$1.47 billion, which translated to an EPS of NT$0.47.
SPIL's consolidated revenues for the first three quarters of 2011 totaled NT$45.53 billion, slipping 5.9% from a year ago. Gross margin for the nine-month period slid to 15.3% from the 15.7% posted during the same period of 2010. It registered net profits of NT$3.67 billion in the first three quarters of 2011, down 18.8% on year.
Source:digitimes