TAIPEI, Taiwan, Aug. 5 /Xinhua-PRNewswire-FirstCall/ -- Advanced
Semiconductor Engineering, Inc. (TAIEX: 2311; NYSE: ASX) ("We",
"ASE", or the "Company"), the world's largest independent provider
of IC packaging and testing services, today reported unaudited net
revenues (Note 1) of NT$25,610 million for the second quarter of
2008 (2Q08), up 10% year-over-year and up 4% sequentially. Net
income for the quarter totaled NT$2,412 million, down from NT$2,575
million in 2Q07 and up from NT$2,337 million in 1Q08. Diluted
earnings per share for the quarter was NT$0.44 (or US$0.072 per
ADS), compared to NT$0.48 for 2Q07 and NT$0.43 for 1Q08. Note 1:
All financial information presented in this press release is
unaudited, consolidated and prepared in accordance with accounting
principles generally accepted in the Republic of China, or ROC
GAAP. Such financial information is generated internally by us, and
has not been subjected to the same review and scrutiny, including
internal auditing procedures and review by our independent
auditors, to which we subject our audited consolidated financial
statements, and may vary materially from the audited consolidated
financial information for the same period. Any evaluation of the
financial information presented in this press release should also
take into account our published audited consolidated financial
statements and the notes to those statements. In addition, the
financial information presented is not necessarily indicative of
our results for any future period. RESULTS OF OPERATIONS 2Q08
Results Highlights -- Net revenue contribution from IC packaging
operations (including module assembly), testing operations, and
substrates sold to third parties was NT$20,033 million, NT$5,102
million and NT$475 million, respectively, and each represented
approximately 78%, 20% and 2% respectively, of total net revenues
for the quarter. -- Cost of revenues was NT$19,098 million, up 13%
year-over-year and up 3% sequentially. -- As a percentage of total
net revenues, cost of revenues was 75% in 2Q08, up from 73% in 2Q07
and relatively unchanged compared to 1Q08. -- Raw material cost
totaled NT$7,695 million during the quarter, representing 30% of
total net revenues, compared with NT$7,301 million and 30% of net
revenues in the previous quarter. -- Depreciation, amortization and
rental expenses totaled NT$3,972 million during the quarter, down
4% year-over-year and up 1% sequentially. -- Total operating
expenses during 2Q08 were NT$2,928 million, including NT$980
million in R&D and NT$1,948 million in SG&A. Compared with
operating expenses of NT$2,836 million in 1Q08, the sequential
increase was primarily attributable to bonuses paid to employees
and compensation to directors and supervisors of one of our
subsidiaries in 2Q08. Total operating expenses as a percentage of
net revenues for the current quarter were 11%, relatively unchanged
compared with 2Q07 and 1Q08. -- Operating profit for the quarter
totaled NT$3,584 million, up from NT$3,352 million in the previous
quarter. Operating margin was 14% in 2Q08 and remained unchanged
compared with the previous quarter. -- In terms of non-operating
items: -- Net interest expense was NT$268 million, down from NT$275
million a quarter ago. -- Net exchange gain of NT$294 million was
primarily attributable to exchange gains from the appreciation of
the Renminbi against the U.S. dollar. -- Gain on long-term
investment of NT$28 million was primarily attributable to
investment income of NT$32 million from USI and investment loss of
NT$3 million from Hung Ching Construction. -- Other non-operating
expenses of NT$76 million were primarily related to loss from
inventory provision adjustment and other miscellaneous expenses.
Together with other non-operating expenses, total non- operating
expenses for the quarter were NT$22 million, compared to NT$292
million for 2Q07 and NT$69 million for 1Q08. -- Income before tax
was NT$3,562 million for 2Q08, compared with NT$3,283 million in
the previous quarter. We recorded an income tax expense of NT$779
million during the quarter, compared with an income tax expense of
NT$411 million in 1Q08. The sequential increase of the income tax
expense was primarily due to the undistributed earnings tax of one
of our subsidiaries in 2Q08. Minority interest was NT$371 million
for 2Q08, down from NT$535 million in the previous quarter,
primarily due to the completion of the ASE Test privatization
transaction at the end of May. -- In 2Q08, net income was NT$2,412
million, compared to net income of NT$2,575 million for 2Q07 and
NT$2,337 million for 1Q08. -- Our total number of shares
outstanding at the end of the quarter was 5,476,949,209, excluding
treasury stock. Our diluted EPS for 2Q08 was NT$0.44, or US$0.072
per ADS, based on 5,494,051,808 weighted average number of shares
outstanding in 2Q08. LIQUIDITY AND CAPITAL RESOURCES -- As of June
30, 2008, our cash and other financial assets totaled NT$32,648
million, compared to NT$29,127 million on March 31, 2008. --
Capital expenditures in 2Q08 totaled US$130 million, of which US$71
million was used for IC packaging, US$56 million was used for
testing, and US$3 million was used for interconnect materials. --
As of June 30, 2008, we had total bank debts of NT$64,687 million,
compared to NT$38,794 million as of March 31, 2008. The increase in
our bank debt was mainly attributable to the financing of the ASE
Test privatization. Total bank debts consisted of NT$12,456 million
of revolving working capital loans, NT$6,162 million of the current
portion of long-term debts, NT$1,375 million of current portion of
bonds payable, NT$40,663 million of long-term debts and NT$4,031
million of long-term bonds payable. Total unused credit lines were
NT$69,692 million. -- Current ratio as of June 30, 2008 was 1.24,
compared to 1.57 as of March 31, 2008. Net debt to equity ratio was
0.57 as of June 30, 2008. -- Total number of employees was
approximately 30,363 as of June 30, 2008. Business Review IC
Packaging Services (Note 2) -- Net revenues generated from our IC
packaging operations were NT$20,033 million during the quarter, up
by NT$2,004 million or 11% year-over- year and up by NT$806 million
or 4% sequentially. On a sequential basis, the increase in
packaging net revenue was primarily due to an increase in sales
volume. -- Net revenues from advanced substrate and leadframe-based
packaging accounted for 84% of total IC packaging net revenues
during the quarter, which equaled the previous quarter. -- Gross
margin for our IC packaging operations was 21%, down by 3% year-
over-year and unchanged sequentially. -- Capital expenditures for
our IC packaging operations amounted to US$71 million during the
quarter, of which US$61 million was used for wirebonding packaging
capacity, and US$10 million was used for wafer bumping and flip
chip packaging equipment. -- As of June 30, 2008, there were 8,426
wirebonders in operation. 358 wirebonders were added, of which 119
wirebonders were obtained from the acquisition of ASE Weihai Inc.
and 58 wirebonders were disposed of during the quarter. -- Net
revenues from flip chip packages and wafer bumping services
accounted for 10% of total packaging net revenues, up by 1
percentage point from the previous quarter. Note 2: IC packaging
services include module assembly services. Testing Services -- Net
revenues generated from our testing operations were NT$5,102
million, up by NT$377 million or 8% year-over-year and up by NT$207
million or 4% sequentially. -- Final testing contributed 77% to
total testing net revenues, and stay unchanged versus previous
quarter. Wafer sort contributed 20% to total testing net revenues,
up by 1 percentage points from the previous quarter. Engineering
testing contributed 3% to total testing net revenues, down by 1
percentage point from the previous quarter. -- Depreciation,
amortization and rental expense associated with our testing
operations amounted to NT$1,475 million, down from NT$1,574 million
in 2Q07 and up from NT$1,455 million in 1Q08. -- In 2Q08, gross
margin for our testing operations was 38%, up by 3 percentage
points year-over-year and up by 1 percentage point sequentially. --
Capital spending on our testing operations amounted to US$56
million during the quarter. -- As of June 30, 2008, there were
1,622 testers in operations. 130 testers were added, of which 52
testers were obtained from the acquisition of ASE Weihai Inc. and
63 testers were disposed of during the quarter. Substrate
Operations -- PBGA substrate manufactured by ASE amounted to
NT$2,161 million for the quarter, up by NT$114 million or 6% from a
year-ago quarter, and up by NT$93 million or 5% from the previous
quarter. Of the total output of NT$2,161 million, NT$475 million
was from sales to external customers. -- Gross margin for substrate
operations was 15% during the quarter, down by 6 percentage points
from a year ago quarter and unchanged from the previous quarter. --
In 2Q08, the Company's internal substrate manufacturing operations
supplied 58% (by value) of our total substrate requirements. -- As
of June 30, 2008, the Company's PBGA capacity was at 52 million
units per month. Customers -- Our five largest customers together
accounted for approximately 28% of our total net revenues in 2Q08,
compared to 27% in 2Q07 and in 1Q08. No single customer accounted
for more than 10% of our total net revenues. -- Our top 10
customers contributed 46% of our total net revenues during the
quarter, compared to 44% in 2Q07 and 1Q08. -- Our customers that
are integrated device manufacturers, or IDMs, accounted for 40% of
our total net revenues during the quarter, compared to 39% in 2Q07
and 42% in 1Q08. About ASE, Inc. ASE, Inc. is the world's largest
independent provider of IC packaging services and, together with
its subsidiary ASE Test Limited, the world's largest independent
provider of IC testing services, including front-end engineering
testing, wafer probing and final testing services. ASE, Inc.'s
international customer base of more than 200 customers includes
such leading names as ATI Technologies Inc., CSR plc, Freescale
Semiconductor, Inc., MediaTek Inc., NEC Corporation, NVIDIA
Corporation, NXP Semiconductors, Qualcomm Incorporated, RF Micro
Devices Inc., STMicroelectronics N.V. and VIA Technologies, Inc.
With advanced technological capabilities and a global presence
spanning Taiwan, Korea, Japan, Singapore, Malaysia and the United
States, ASE, Inc. has established a reputation for reliable, high
quality products and services. For more information, visit our
website at http://www.aseglobal.com/ . Safe Harbor Notice This
press release contains "forward-looking statements" within the
meaning of Section 27A of the United States Securities Act of 1933,
as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended, including statements regarding
our future results of operations and business prospects. Although
these forward-looking statements, which may include statements
regarding our future results of operations, financial condition or
business prospects, are based on our own information and
information from other sources we believe to be reliable, you
should not place undue reliance on these forward-looking
statements, which apply only as of the date of this press release.
We were not involved in the preparation of these projections. The
words "anticipate", "believe", "estimate", "expect", "intend",
"plan" and similar expressions, as they relate to us, are intended
to identify these forward-looking statements in this press release.
Our actual results of operations, financial condition or business
prospects may differ materially from those expressed or implied in
these forward-looking statements for a variety of reasons,
including risks associated with cyclicality and market conditions
in the semiconductor industry; demand for the outsourced
semiconductor packaging and testing services we offer and for such
outsourced services generally; the highly competitive semiconductor
industry; our ability to introduce new packaging, interconnect
materials and testing technologies in order to remain competitive;
international business activities; our business strategy; our
future expansion plans and capital expenditures; the strained
relationship between the ROC and the PRC; general economic and
political conditions; possible disruptions in commercial activities
caused by natural or human-induced disasters; fluctuations in
foreign currency exchange rates; and other factors. For a
discussion of these risks and other factors, please see the
documents we file from time to time with the Securities and
Exchange Commission, including our 2007 Annual Report on Form 20-F
filed on June 30, 2008, as amended. -- Tables to Follow --
Supplemental Financial Information Consolidated Operations Amounts
in NT$ Millions 2Q/08 1Q/08 2Q/07 Net Revenues 25,610 24,695 23,362
Revenues by End Application Communication 45% 45% 46% Computer 24%
25% 22% Automotive and Consumers 31% 30% 32% Others 0% 0% 0%
Revenues by Region North America 50% 50% 48% Europe 9% 11% 12%
Taiwan 21% 23% 23% Japan 9% 8% 9% Other Asia 11% 8% 8% IC Packaging
Services Amounts in NT$ Millions 2Q/08 1Q/08 2Q/07 Net Revenues
20,033 19,227 18,029 Revenues by Packaging Type Advanced substrate
& leadframe based 84% 84% 85% Traditional leadframe based 4% 4%
5% Module assembly 4% 5% 6% Others 8% 7% 4% Capacity CapEx (US$
Millions)* 71 78 49 Number of Wirebonders 8,426 8,126 7,040 Testing
Services Amounts in NT$ Millions 2Q/08 1Q/08 2Q/07 Net Revenues
5,102 4,895 4,724 Revenues by Testing Type Final test 77% 77% 76%
Wafer sort 20% 19% 20% Engineering test 3% 4% 4% Capacity CapEx
(US$ Millions)* 56 44 20 Number of Testers 1,622 1,555 1,385 *
Capital expenditure amounts exclude building construction costs.
Advanced Semiconductor Engineering, Inc. Summary of Consolidated
Income Statements Data (In NT$ millions, except per share data)
(Unaudited) For the three months ended For the period ended Jun. 30
Mar. 31 Jun. 30 Jun. 30 Jun. 30 2008 2008 2007 2008 2007 Net
revenues: IC Packaging 20,033 19,227 18,029 39,260 34,312 Testing
5,102 4,895 4,724 9,997 9,049 Others 475 573 609 1,048 1,094 Total
net revenues 25,610 24,695 23,362 50,305 44,455 Cost of revenues
19,098 18,507 16,958 37,605 33,055 Gross profit 6,512 6,188 6,404
12,700 11,400 Operating expenses: Research and development 980
1,096 720 2,076 1,409 Selling, general and administrative 1,948
1,740 1,795 3,688 3,332 Total operating expenses 2,928 2,836 2,515
5,764 4,741 Operating income 3,584 3,352 3,889 6,936 6,659 Net
non-operating (income) expenses: Interest expenses -- net 268 275
306 543 659 Foreign exchange gain (294) (301) (147) (595) (165)
Gain on long-term investment (28) (104) (65) (133) (141) Others 76
199 198 276 439 Total non-operating expenses 22 69 292 91 792
Income before tax 3,562 3,283 3,597 6,845 5,867 Income tax expense
779 411 866 1,191 1,185 Income from continuing operations and
before minor interest 2,783 2,872 2,731 5,654 4,682 Minority
interest 371 535 156 906 446 Net income 2,412 2,337 2,575 4,748
4,236 Per share data: Earnings (loss) per share --Basic NT$0.46
NT$0.44 NT$0.50 NT$0.90 NT$0.82 --Diluted NT$0.44 NT$0.43 NT$0.48
NT$0.86 NT$0.79 Earnings (loss) per equivalent ADS --Basic US$0.075
US$0.070 US$0.075 US$0.146 US$0.125 --Diluted US$0.072 US$0.067
US$0.073 US$0.138 US$0.120 Number of weighted average shares used
in diluted EPS calculation (in thousands) 5,494,052 5,460,822
5,433,905 5,479,984 5,463,437 Exchange rate (NT$ per US$1) 30.36
31.74 33.11 31.05 32.94 Advanced Semiconductor Engineering, Inc.
Summary of Consolidated Balance Sheet Data (In NT$ millions)
(Unaudited) As of Jun. 30, As of Mar. 31, 2008 2008 Current assets:
Cash and cash equivalents 23,305 16,589 Financial assets -- current
9,343 12,538 Notes and accounts receivable 17,633 16,994
Inventories 5,598 5,439 Others 3,232 4,312 Total current assets
59,111 55,872 Financial assets -- non current 4,568 4,818
Properties -- net 83,209 81,297 Others 17,432 9,118 Total assets
164,320 151,105 Current liabilities: Short-term debts -- revolving
credit 12,456 10,573 Short-term debts -- current portion of
long-term debts 6,162 6,060 Short-term debts -- current portion of
bonds payable 1,375 1,375 Notes and accounts payable 8,339 7,762
Others 19,492 9,785 Total current liabilities 47,824 35,555
Long-term debts 40,663 16,602 Long-term bonds payable 4,031 4,184
Other liabilities 2,808 2,949 Total liabilities 95,326 59,290
Minority interest 2,980 14,958 Shareholders' equity 66,014 76,857
Total liabilities & shareholders' equity 164,320 151,105
Current Ratio 1.24 1.57 Net Debt to Equity 0.57 0.11 Contact: ASE,
Inc. Joseph Tung, CFO or Vice President Freddie Liu, Vice President
Allen Kan, Manager Tel: +886-2-8780-5489 Fax: +886-2-2757-6121
Email: Website: http://www.aseglobal.com/ US contact: Clare Lin,
Director Tel: +1-408-986-6524 Email: DATASOURCE: Advanced
Semiconductor Engineering, Inc. CONTACT: Joseph Tung, CFO and Vice
President, or Freddie Liu, Vice President, or Allen Kan, Manager,
+886-2-8780-5489, or fax, +886-2-2757-6121, , all of ASE, Inc.; or
US contact, Clare Lin, Director, +1-408-986-6524, Web site:
http://www.aseglobal.com/
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