IC testing and packaging firms to see Q1 sales drop of between 5% - 10%

The China Post news staff--Taiwan's integrated circuit (IC) testing and packaging operators are expected to see first quarter sales drop anywhere between five and 10 percent on a quarter-on-quarter basis, in the midst of a slow season, they said yesterday.

By product, testing and packaging of chips for handsets, consumer electronics and personal computers may all feel the effects of the lull in the market, said Advanced Semiconductor Engineering (ASE).

Sales from independent device manufacturing clients are expected to drop in the first quarter, and business will also remain low in the second quarter, ASE said, adding a rebound is expected to happen in the third quarter.

Lin Wen-po, chairman of Siliconware Precision Industries Ltd. (SPIL), had said earlier this month that the first quarter of 2012 will be the bottom for the semiconductor industry. For the whole year, though, the IC industry is still expected to grow, with SPIL set to place a stronger focus on testing and packaging of mid- to high-end semiconductors, he said.

According to market speculation, Lin's optimism was driven by the fact SPIL has successfully snagged orders from a major international firm, the first time ever the IC testing and packaging giant has obtained business from this multinational conglomerate.

Another firm, ChipMOS, has forecasted its sales for the January-March period will either stay the same as Q4 2011 or drop five percent. Sales from testing and packaging of driver ICs for large-size panels will rise, on strong demands for large-screen LCD TVs. Business from small-size panel driver ICs may stay the same as Q4, on persisting popularity for tablet PCs and smart phones.

Overall, the firm predicts Q1 sales from driver ICs are expected to stay flat from Q4, while those from dynamic random access memory (DRAM) chips may drop slightly quarter-on-quarter. Logic IC testing and packaging are expected to pick up steam in the second quarter at the earliest.

Powertech Technology Inc., which focuses primarily on DRAM testing and packaging, may see Q1 sales drop 10 to 15 percent from Q4, adding Q1 2012 would be the worst first quarter the firm has ever had, chairman Tsai Tu-kung had stated.

Sales from DRAM manufacturer Elpida will account for less than 50 percent of the firm's revenue by the end of the first quarter, Tsai, said, adding Q1 revenue from mobile DRAM manufacturers is expected to be rosier.