ASM Pacific sees steady growth in chip packaging equipment orders

Hong Kong manufacturing equipment supplier reports record year-on-year growth in third-quarter net profit

PUBLISHED : Thursday, 27 October, 2016, 5:19pm
UPDATED : Thursday, 27 October, 2016, 10:54pm

ASM Pacific Technology, the world’s largest assembly and packaging equipment supplier for the semiconductor industry, anticipates steady business growth next year after posting a record 220.7 per cent year-on-year increase in net profit for the three months to September 30.

“We see market sentiment is better this year compared with the same period last year, and customers are feeling more optimistic about next year,” ASM Pacific chief executive Lee Wai-kwong told the South China Morning Post on Thursday.

“We are seeing customers talk about new projects and moving ahead a little bit earlier in their investment plans.”

Hong Kong-listed ASM Pacific on Thursday reported that its third-quarter net profit surged to HK$578 million, up from HK$180.23 million a year earlier, on the back of revenue expansion in its three business segments.

Chip assembly and packaging equipment sales grew 53 per cent year on year to HK$2.33 billion; its surface-mount technology (SMT) systems business for printed circuit boards advanced 8 per cent to HK$1.47 billion; and the materials business for chip interconnection solutions saw sales up 18 per cent to HK$494.28 million.

Total revenue in the third quarter climbed 29 per cent to HK$4.19 billion from HK$3.23 billion the previous year.

ASM Pacific supplies semiconductor assembly and packaging equipment equipment and chip interconnection materials used by chip makers, independent integrated circuit assembly houses, consumer electronics manufacturers and automotive components suppliers.

The company is 40.8 per cent owned by Nasdaq-traded ASM International, a silicon wafer processing equipment supplier headquartered in the Netherlands.

We are seeing customers talk about new projects and moving ahead a little bit earlier in their investment plans
Lee Wai-kwong, chief executive, ASM Pacific

“Despite tough macroeconomic conditions, the group has performed well this year,” Lee said.

He pointed out that ASM Pacific’s net profit for the past three quarters combined already exceeded the net profit for the whole of last year.

The company reported a 17.4 per cent increase in net profit to HK$1.06 billion for the nine months to September 30, up from HK$903.08 million in the same period last year. Total net profit last year was HK$956.19 million.

Nine-month revenue this year rose 6.8 per cent to HK$10.73 billion from HK$10.05 billion a year ago.

Jefferies equity analyst Ken Hui said in a report that ASM Pacific will likely benefit from a bigger SMT equipment replacement cycle in the second half of next year.

That would be around the time Apple is due to launch its new iPhones, which are expected to adopt so-called modified semi-additive processing for printed circuit boards. Experts say advances in squeezing more systems on a chip have become dependent on improved processes for fabricating those boards.

Lee said ASM Pacific would also benefit from the rising trend of dual cameras in smartphones since its equipment is used for assembling the image sensors in those devices.