ASE to Invest US$100-200 Bn. to Double SiP Capacity Over Three Years

Advanced Semiconductor Engineering (ASE) Inc., reportedly the world's No.1 pure chip assembler, will invest NT$100-200 billion (US$3.22-6.45 billion) to double its system-in-packaging (SiP) production capacity over three years to double revenue in three to six years, according to company chairman and chief executive officer, Jason Chang.

Based on the company's consolidated revenue of NT$256.60 billion (US$8.27 billion) for 2014, industry executives estimate the company's projected doubling of revenue at NT$513.20 billion (US$16.55 billion).

Chang points out that the company is a world leader in SiP technology, which meets the energy-conservation and compactness standards required by top international players for wearable devices, mobile devices and Internet of Things (IoT) products.

He says that that the world is moving from the Internet age towards one of mobility, where online content can be accessed on mobile, wearable devices. While many people and less-optimistic realists feel that the mobility age remains in its infancy, Chang says such reality is just around the corner.

ASE Chief Operating Officer (COO) T.Y. Wu points out since SiP technology is on uptrend, international companies at the forefront of information tech are choosing the technology as the base for the design and production of products and for vertical integration with subcontract manufacturers.

He believes the company will land SiP orders from international mobile-device makers dedicated to high-end products in the near term although low-end and mid-range manufacturers continue to engage in cutthroat competition.

Chang says SiP will become ASE's major revenue earner this year despite only few manufacturers, including several international big-name tech companies, are now beginning to contract the company for leading-edge packaging technology.

Industry executives believe the said firms include  Apple, whose Apple Watch and iPhone 6C/6S use SiP technology.

Chang adds that his company has been developing the technology since it acquired electronics manufacturing service (EMS) provider Universal Scientific Industrial Co. Ltd. (USI) several years ago.

In the first quarter of this year, ASE reported consolidated revenue of NT$64.66 billion (US$2.08 billion), slipping 15.6 percent from a quarter earlier but adding 18.2 percent year on year to be in line with the projected NT$64-66 billion (US$2.06-2.12 billion) range.

The revenue was mostly composed of NT$38.60 billion (US$1.24 billion) from its packaging and testing service and NT$26.05 billion (US$840.54 million) from its EMS.

This March the company's packaging and testing service generated consolidated revenue of NT$13.57 billion (US$438.03 million), increasing 11.4 percent year on year to hit new high. The March result helped increase the company's packaging and testing revenue for the first quarter to NT$38.60 billion (US$1.24 billion), decreasing 12.0 percent from the previous quarter in line with expectations but rising 12.4 percent year on year to reach new high.

The company's EMS operation generated consolidated revenue of NT$22.32 billion (US$720.16 million) this March, gaining 17.6 percent to top expectations.

(KL)