Compeq suffered estimated losses of NT$800-900 M. in Q1

Taipei, April 22, 2003 (CENS)--Compeq Mfg. Co., the leading PCB maker in Taiwan, said yesterday that it estimated pretax losses for the first quarter may range between NT$800 million and NT$900 million, as deliveries of its FC (FlipChip) PGA 2 to Intel were not smooth.

Intel has been the largest client of Compeq in IC substrates in recent years. As Intel has upgraded its CPU to Pentium 4, Compeq also upgraded its FC PGA1 to FC PGA2, a major reason why Compeq had suffered losses in the past two years.

In 2002, Compeq was asked to delay its deliveries of FCPGA2 due to the defect problem although the firm resumed the normal delivery lately. This situation happened again this year as Intel requested the suspension of deliveries recently.

It is reported that Compeq would be in the red of up to NT$900 million for the first quarter due to the inventory and relevant losses. This is expected to incur pretax loss of NT$1 per share.

Compeq has conducted the manufacture adjustment on its FCPGA2. The firm expects the delivery will become smooth beginning in the second quarter.

Based on the existing situation, Compeq will not be able to control the normal delivery schedule to Intel for the year. Compeq expects to continue suffering losses in 2003.

Wu Chien, chairman of Compeq, once said the firm would turn losses into profits in 2003. This target will not be accomplished, however.

Despite the losses in the IC substrate department, Compeq's PCB department still grew steadily in the first quarter. The firm delivered over five million PCBs per month and raked in revenue of NT$2.96 billion in the first quarter, a slight decline of 4.89% from the same period a year earlier.

Intel has switched part of its FCPGA2 orders to Japan. This also benefits Nanya Technology Corp., which replaced Compeq as the No. 1 PCB maker in the first quarter. Nanya Technology has produced PCBs for several Japanese counterparts on the OEM (original equipment manufacturer) basis.