Siliconware Precision Industries (SPIL) saw its gross margin increase to reach 14.3% in the fourth quarter of 2010, up 0.1pp sequentially and beating market estimates. The chip packager credited the result to growing sales of its copper wire bonding services.
SPIL said sales generated from copper wire bonding accounted for 17.9% of the company's total revenues in the fourth quarter of 2010, up 7.2pp from 10.7% in the third. The proportion is expected to reach 30% in the first half of 2011, and exceed 50% by the end of the year, the company indicated.
SPIL's transition to a copper wire process has now become smooth, said company chairman Bough Lin. Cost improvement helped offset partially the impact of a strong NT dollar.
Due to continued strength in gold prices, SPIL and other fellow chip assembly and testing firms including Advanced Semiconductor Engineering (ASE) consider copper wire bonding as a low-cost alternative to shore up their gross margins.
However, still affected by the NT dollar's appreciation, SPIL's consolidated revenues declined 5.1% on quarter to NT$15.48 billion (US$533 million) in the fourth quarter. Falling ASP was another cause, Lin said, adding that prices were dragged down by rising copper wire bonding sales.
In additional news, SPIL has budgeted NT$10 billion in capex for 2011. Three-quarters of the amount will be used in the first half of 2011, according to Lin. The company plans to install 615 sets of copper wirebonders and 16 sets of testing equipment during the six-month period.