Sales at IC packaging and testing houses Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) will likely register sequential decreases of 10% or more in the first quarter of 2013 due to a slowdown in customer orders, according to market watchers.

Major clients of ASE and SPIL, such as AMD and MediaTek, continue to be cautious about placing orders as the supply chain is still digesting excess inventory, the watchers indicated. With orders from those customers unlikely to pick up until March, sales at ASE and SPIL are set to fall and follow seasonal trends in the first quarter, the watchers said.

In contrast to a slowdown in demand for PC- and handset-related ICs, demand for semiconductors used in servers and base stations has remained brisk, the watchers observed. Backend orders placed by Altera and Xilinx have been relatively stable, the watchers noted.

Both ASE and SPIL are scheduled to hold their quarterly investors meetings on January 30 to discuss their performance in the fourth quarter of 2012, and also provide company guidance for the first quarter.

In the fourth quarter, ASE and SPIL both saw their revenues miss the previous guidance of 2-5%. Sales of ASE's core ATM (assembly test and material) business grew by a mere 1.5% on quarter while SPIL's consolidated sales slipped 4.2% sequentially.

ASE estimated previously a larger 2-5% increase in its core business sales in the fourth quarter, while SPIL projected an up to 3% decrease.