ASE to Encase Apple Watch S1 Chips with SiP Process

Industry executives say Advanced Semiconductor Engineering Inc. (ASE), reportedly the world's No.1 dedicated chip assembler, has won the contract to encase the S1 processors for Apple Watch using the system-in-packaging (SiP) process, which enables more functions to be integrated into the watch while reducing overall dimensions or achieving compactness.

The contract will likely moderate the company's normal 10-15 percent quarter-on-quarter revenue reduction in the low season of the first quarter this year and help increase corporate revenue for the second quarter to the level of the fourth quarter last year.

Mainly driven by the contract to package Apple WiFi chips and fingerprint recognition chips using SiP process last year, ASE set new highs in both  2014 consolidated revenue and after-tax net income of NT$256.59 billion (US$8.27 billion) and NT$23.59 billion (US$760.96 million), or NT$3.07 per share, respectively.

The Apple Watch will reportedly begin to be sold worldwide late this April, likely to generate a wave of interest in SiP technology. Apple's contract suppliers point out that Apple is quite optimistic about the commercial potential of SiP and plans to build SiP devices into half its iPhone 6S scheduled to hit shops in the second half of this year and all  iPhone 7, which reportedly will go on sale in the third quarter this year.

While ASE has declined to comment on the reports of the company having won the new Apple SiP contract, the company's executives say the ASE has set up integrated production to cover substrate, chip, module and system ends for SiP production, being confident of becoming a prominent supplier in the SiP 5/3D packaging market.

ASE Chairman Jason Chang says SiP will soon supplant printed-circuit board (PCB) as the mainstream process in the global packaging market that will meet rising demand accordingly in the ever more popular applications of smart phone, wearable device and Internet of Things (IoT).

(KL)