ASE shares boosted by in­vest­ment plan, sales re­port

The China Post - - TAIWAN BUSINESS -

Shares of Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. (ASE, ) got a boost from a new in­vest­ment plan in­di­cat­ing that the in­te­grated cir­cuit pack­ag­ing and testing ser­vices provider re­mains up­beat about fu­ture mar­ket de­mand, deal­ers said.

The cur­rent buy­ing also re­flected an im­prove­ment in sales posted by ASE for the first quar­ter of this year, out­per­form­ing the broader semi­con­duc­tor sec­tor, which raised hopes that its bot­tom line will strengthen ac­cord­ingly, they said.

As of 10:55 a.m., shares of ASE had risen 2.80 per­cent to NT$44.00 (US$1.41), with 24 mil­lion shares chang­ing hands. The weighted in­dex on the Tai­wan Stock Ex­change was up 0.45 per­cent to 9,614.96 points.

“Af­ter the re­cent sell-off in the lo- cal high-tech sec­tor, in­vestors sim­ply seized the pos­i­tive leads from ASE to pick up bar­gains this morn­ing,” Hua Nan Se­cu­ri­ties an­a­lyst Kevin Su said.

NT$100-200 Bil­lion In­vest­ment

in Kaoh­si­ung

ASE Chair­man Ja­son Chang ((

) said Wed­nes­day that his com­pany is plan­ning to in­vest NT$100 bil­lion to NT$200 bil­lion over the next three years in Kaoh­si­ung, where the IC pack­ag­ing and testing ser­vices firm has a broad pro­duc­tion base, to boost its ca­pac­ity.

Chang said that ASE will con­tinue ef­forts in de­vel­op­ing high-end sys­tem in pack­age (SiP) tech­nol­ogy in a bid to main­tain its lead over its peers in the global mar­ket as more and more in­ter­na­tional brands have been adopt­ing such ad­vanced tech­nol­ogy.

“Many in­vestors have been en­cour­aged by the ASE’s in­vest­ment plan, since only com­pa­nies which have in­di­cated high ex­pec­ta­tions about fu­ture de­mand are determined to raise pro­duc­tion ca­pac­ity,” Su said.

Fol­low­ing the newly dis­closed plan, many mar­ket ob­servers have spec­u­lated that ASE is gear­ing up to se­cure more or­ders from Ap­ple Inc.

“It is pos­si­ble for ASE, the world’s largest IC pack­ag­ing and testing ser­vices provider, to re­ceive more or­ders from Ap­ple. The in­vest­ment plan has boosted such op­ti­mism,” Su said.

NT$64.66 Bil­lion Con­sol­i­dated

Sales in Q1

In a state­ment re­leased Wednes- day, ASE said that it had posted NT$64.66 bil­lion in con­sol­i­dated sales for the first quar­ter, up 18.2 per­cent from a year ear­lier, to hit the high­est level in com­par­i­son with the same pe­riod in the past. How­ever, first quar­ter sales fell 15.6 per­cent from a quar­ter ear­lier as the Jan­uary-March pe­riod was the slow sea­son for the global IC in­dus­try.

“ASE’s sales growth beat the en­tire semi­con­duc­tor sec­tor in the first quar­ter. The fig­ure is en­cour­ag­ing. It was no sur­prise that in­vestors have been amazed by the sales re­port,” Su said.

Or­ders Placed by Ap­ple

Mar­ket an­a­lysts said that ASE ben­e­fited from the or­ders placed by Ap­ple for pro­duc­tion of the U.S. con­sumer elec­tron­ics gi­ant’s popular iPhone 6 and iPhone 6 Plus smartphones, while the launch of the Ap­ple Watch also led the U.S. firm to raise its de­mand for the SiP tech­nol­ogy pro­vided by the Tai­wanese sup­plier.

Su said that buy­ing in ASE also spread to other IC stocks, in par­tic­u­lar Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC,

), which said that the ad­vanced 10 nanome­ter process is sched­uled to start mass pro­duc­tion by the end of 2016, a sched­ule to en­sure that TSMC will lead its com­peti­tors in tech­nol­ogy devel­op­ment.

TSMC had risen 1.40 per­cent to NT$145.00 on trad­ing vol­ume of 19.76 mil­lion shares as of 10:55 a.m.

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