ASM Pacific eyes market recovery after profit decline

Chip equipment firm says worst is over for industry after earnings slump 76.5 per cent

PUBLISHED : Thursday, 07 March, 2013, 12:00am
UPDATED : Thursday, 07 March, 2013, 6:12am

ASM Pacific Technology, the world's largest assembly and packaging equipment supplier for the semiconductor and light-emitting diode (LED) industries, is hoping for better days after posting double-digit declines in net profit and revenue last year.

In a filing with the Hong Kong stock exchange yesterday, ASM Pacific chief executive Lee Wai-kwong said: "There are signs that the market slowdown stabilised towards the end of last year, indicating that we have probably come off the bottom of the current industry cycle."

ASM Pacific, which is majority-owned by Dutch semiconductor equipment maker ASM International, reported a 76.5 per cent fall in net profit to HK$689 million from HK$2.93 billion a year earlier.

The drop was attributed to the sharp contraction in the global semiconductor material and equipment markets during the second half of last year.

It said that slump also disrupted the momentum of a recovery in the LED equipment market.

Revenue slid 19 per cent to HK$10.46 billion from HK$12.92 billion. Sales on the mainland, which remains the largest market for ASM Pacific, declined to HK$4.45 billion last year from HK$5.78 billion in 2011.

"The slowdown in the China market probably had the greatest negative impact for the group's performance last year," Lee said. But he pointed out that the steady improvement in the world economy augured well for a recovery in the industry and that smartphones and media tablets "have become the most important drivers of the semiconductor market".

Information technology research firm Gartner forecast worldwide semiconductor sales would hit US$311 billion this year, up from US$298 billion last year. It said the dynamic random access memory chip market would help drive the recovery in the industry in the second half of the year.

Lee said ASM Pacific's customers were keen to aggressively develop new packaging solutions, and the company expected orders for its back-end business - covering assembly and packaging equipment - would start to improve this quarter.

Despite last year's difficulties, ASM Pacific's board recommended a final dividend of 30 HK cents per share. Together with the interim dividend of 61 HK cents per share paid in August, the full payout for last year came to 91 HK cents per share.

Shares of ASM Pacific climbed 2.92 per cent to HK$102.30 yesterday.