ASE shares boosted by investment plan, sales report
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
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.