Memory IC packaging and testing house Walton Advanced Engineering has reported net profits of NT$262 million (US$8 million) for the second quarter of 2010, up 45% on quarter and topping market watcher estimates. Consolidated revenues for the quarter grew 16% sequentially to NT$1.96 billion.
Walton attributed the strong profit growth to rising ASPs for DRAM packaging and testing, as well as growing shipments for specialty memory products. Gross margin for the second quarter was 16%, up 3pp on quarter.
Walton ran at 90-95% utilization rate in the second quarter, compared to about 80% in the first, according to company president Yu Hong-chi. Utilization rate for the third quarter may drop slightly on quarter as new capacity comes on line, said Yu.
Yu estimated Walton's utilization rate at 90% in the third quarter, with revenues to increase 7-10% sequentially. Third-quarter gross margin may remain similar to the level in the second quarter on flat ASPs, Yu added.
Walton posted net profits of NT$443 million on consolidated sales of NT$3.64 billion in the first half of 2010, showing significant growth compared to profits of NT$21 million on revenues of NT$2.53 billion a year ago.
Walton is cautiously optimistic about its second-half performance, according to Yu. A more modest growth estimate for the second half of 2010 reflects an exceptionally strong first half, Yu indicated.
In addition, Wu noted that capacity at the company's new plant - formerly an LCM facility owned by HannStar Display - is expected to come on line within the next three months.
Walton's capex target for 2010 remains unchanged at NT$5 billion, compared with NT$2 billion allocated for 2009, according to Wu.
Elpida Memory, Winbond Electronics, Powerchip Technology and Nanya Technology reportedly are Walton's top-4 clients.