ChipMOS Technologies, a backend house targeting the LCD driver IC and memory chip sectors, expects rising sales generated from the LCD driver IC and mixed-signal chip sectors in the second quarter. The company also expressed optimism about demand for niche-market memory and NOR flash chips, which will remain brisk through the second half of 2017.

ChipMOS' overall revenues and production utilization rate for the second quarter will outperform the levels for the first quarter, according company chairman and president SJ Cheng.

ChipMOS reported revenues for the first quarter of 2017 of NT$4.56 billion (US$150.1 million), down 2.3% sequentially but up 2.5% on year. The results came above the company's guidance of a 4-8% sequential drop.

"Revenue for the first quarter of 2017 came in above our guidance in what is traditionally the seasonally lowest quarter for the OSAT sector. This reflects strength in our LCD driver business, led by demand from both small and large panels," Cheng indicated.

ChipMOS posted a 17.9% gross margin in the first quarter of 2017, down 2.7pp on quarter and 2.1pp on year. The company generated operating profits of NT$1.05 billion in the first quarter with a 23.1% operating margin compared with 10.9% in the prior quarter and 11.3% a year earlier.

ChipMOS disclosed net income attributable to equity holders of the company for the first quarter of 2017 was US$78.3 million or US$0.09 per diluted common share, as compared to US$20.2 million or US$0.02 per diluted common share in the prior quarter, and US$11.5 million or US$0.01 per diluted common share a year earlier.

The net income for first-quarter 2017 included US$62.8 million related to ChipMOS' completion of ChipMOS Shanghai equity interest transfer to Tsinghua Unigroup, the company indicated.

"There were a variety of factors that adversely impacted first quarter results, including but not limited to, the higher accrual for employees' bonuses, and foreign exchange loss, which were offset by the positive impact of the closure of the ChipMOS Shanghai equity interest transfer," Cheng said.

In addition, ChipMOS noted it will allocate 56% of its planned capex for 2017 for its production lines for LCD driver ICs, 14% for wafer bumping services, and the remaining 30% for memory and logic IC backend services. ChipMOS plans to budget around NT$5 billion (US$165.5 million) in capex for 2017, the company disclosed.