SAN JOSE, Calif. Continued strength in the IC packaging and test sector during the fourth quarter and possibly beyond has prompted an investment banking firm to raise its estimates for Amkor, Siliconware and STATS ChipPAC.
For months, leading providers of backend chip services have experience robust demand, especially for higher-end, complex IC packages. Utilization rates for providers have approached or exceeded the 90-percent range amid the upturn.
Even troubled Amkor Technology Inc. is seeing strong demand and an increase for its average selling prices, said Mark Bachman, an analyst with Pacific Crest Securities Inc. (Portland).
U.S.-based Amkor, the world’s second largest IC packaging and test house, is projected to earn $0.11 per share on sales of $631.1 million in Q4, up from Bachman’s previous forecast of a loss of $0.02 a share on sales of $582.6 million in the period.
Last week Amkor increased its Q4 forecast despite the departure of its president and COO.
There are still some concerns about Amkor. “Lack of EPS guidance [in last week’s announcement] adds uncertainty,” Bachman said in a report. “Hasty departure [of the president and COO] is disconcerting given our 2006 outlook.”
The mood is improving at Singapore’s STATS ChipPAC Pte. Ltd., the world’s fourth largest IC packaging and testing house. “Q4 [is] tracking ahead of guidance,” he said, adding that the company is seeing strong demand in the 3G, wireless LAN and other sectors.
IDM wins from Japan and Europe are also fueling the company, which is seeing utilization rates at above 90 percent. STATS ChipPAC is projected to earn $0.13 a share on sales of $357 million in Q4, up from Bachman’s previous forecast of $0.12 a share on sales of $346.5 million in the period.
The analyst also raised his forecast for Taiwan’s Siliconware Precision Industries Co. Ltd., the world’s third largest provider in the sector.
Citing strong customer demand and improved pricing, Siliconware is projected to earn $0.16 a share on sales of $404.7 million in Q4, up from Bachman’s previous forecast of $0.15 a share on sales of $378.5 million in the period.
In Q3 Taiwan-based IC packaging and testing services supplier Advanced Semiconductor Engineering Inc. (ASE) posted sales of $453.3 million with net income of $47.2 million.