PTI to Reach EPS of NT$1.7 in Q3 Thanks to Resuming DRAM prices

28 Oct
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Taiwanese semiconductor assembly, packaging and testing company Powertech Technology Inc. (PTI) announced its third quarter earnings on October 25. The earnings conference was hosted by Duh Kung Tsai, chairman of the Board and General Manager Chia Yu Hong.

According to the financial results, TPI’s net profit in the thrid quarter grew 21.2% to NT $1.33 billion (US $42.12 million) compared to last quarter. The compnay also witnessed 19.7% year on year (YoY) growth. Meanwhile, its EPS reached NT $1.7.

The total revenue income of the first three quarters showed 14% YoY growth at NT $34.69 billion. The gross margin also rose from 18.6% in 2015 to 21.2% in 2016. Meanwhile, net profit saw 21.6% growth at NT $3.39 billion. The company’s EPS reached NT $4.36 in the first three quarters.

DRAM is one of PTI’s core business, said Chia Yu Hong, General Manager of PTI. Based on product structure analysis, DRAM accounts for 35% of the company’s revenue income while flash memory accounts for 38% and logic IC 27%. DRAM growth reached 17% compared to the last quarter, while flash memory saw 12.2% growth and logic IC 8.3%.

 

Chia Yu Hong, General Manager of PTI

Chia Yu Hong, General Manager of PTI

Thanks to resuming price in DRAM in mid 2016, PTI showed revenue growth in Q3 and has witnessed stable growth each quarter. When observed from supply perspective, continuous strong demand of mobile DRAM causes tight demand. Standard DRAM, on the other hand, benefited from resuming price and rising contract price. The applications of specialty DRAM is also growing as main demand shift to high density applications while the demand grows.

In addition, the production utilization of flip-chip packages and wafer bumpimg nearly reach full capacity, said Hong. The production capacity of wafer bumping has doubled and reached 640,000 pieces compared to that of 2015. The construciton of Hsin Chu-based Fan-out line is proejcted to be completed in Q1 in 2017 and will start small batch production by Q2.  Xi’an plant mainly produces standard DRAM. The plant reaches monthly roduction capacity at more than 50 million pieces.

When projecting revenue income of Q416, Hong is optimistic about one-digit growth in revenue income of DRAM.

As for logic IC, the demand will either remain unchanged or show slight growth. Such conservative estimation is attributed to tight demand of wafer chips that will be impacted by the growth traction of logic IC.