02.09.2001
ASE revenue affected by IC foundry slowdown

• IC Packaging company, Advanced Semiconductor Engineering (ASE, 2311 'R Yue Guang'), expects that its capacity utilization rate for 1Q01 will be between 70%-80%. Consequently, 1Q01 revenue should see a 10%-15% QoQ fall.

• As a back-end packaging company, ASE is adversely affected by capacity utilization decrease by IC foundry customers. TSMC (2330 'Tai Ji Dian'), one of ASE's main customers, has reported a 1Q01 capacity utilization rate of 70% so far. This is down sharply from the 4Q00 result of 105%.

• TSMC fills around 40-50% of ASE's packaged wafer sales, with remaining orders from IDM and other companies overseas. We expect any downside from TSMC’s slowdown to be limited, as explained by recent TSMC announcements that it will increase its capacity utilization rate capacity in 2Q01. Consequently, we expect ASE to gain momentum in 2H01.

AngelLo@Primasia.com +886-[0]2-2547-8865