ChipMOS REPORTS SECOND QUARTER 2017 RESULTS

(PRNewswire) —

HSINCHU, Taiwan, Aug. 10, 2017 /PRNewswire-FirstCall/ --

2Q17 Highlights (as compared to 1Q17):

  • Net Revenue at US$149.5 Million Compared to US$150.1 Million
  • Gross Profit of US$30.0 Million Compared to US$26.9 Million
  • Gross Margin at 20.1% Compared to 17.9%
  • Net Earnings of US$0.25 Per Diluted ADS Compared to US$1.82 Per Diluted ADS; Net Earnings of US$0.01 Per Diluted Common Share Compared to US$0.09 Per Diluted Common Share; 1Q17 Includes a Net Income Benefit of US$62.8 Million from the ChipMOS Shanghai Equity Interest Transfer to Tsinghua Unigroup Led Strategic Investors, which Did Not Repeat in 2Q17
  • Distributed Cash Dividend of NT$1.0 Per Common Share on July 12, 2017 and US$0.655 Per ADS on July 19, 2017
  • Retained Balance of Cash and Cash Equivalents at US$364.7 Million, with Net Debt Balance of US$48.8 Million
  • ChipMOS Shanghai Joint-Venture Funded, Ramping Production, and Qualifying Additional Customer Programs

ChipMOS TECHNOLOGIES INC. ("ChipMOS" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"), today reported unaudited consolidated financial results for the second quarter ended June 30, 2017. All U.S. dollar figures in this release are based on the exchange rate of NT$30.38 against US$1.00 as of June 30, 2017.

All the figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("Taiwan-IFRS"). In March 2017, the Company completed the sale and transfer of 54.98% equity interests of its former wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD. ("ChipMOS Shanghai") to Tsinghua Unigroup led investors ("Strategic Investors").  Under Taiwan-IFRS, starting in Q1 2017 the revenue generated by ChipMOS Shanghai is no longer included in the Company's consolidated revenue.  The Company, however, recognizes 45.02% of the net income generated from ChipMOS Shanghai on an ongoing basis.  Revenue from ChipMOS Shanghai has been excluded from all periods indicated. 

Net revenue for the second quarter of 2017 was NT$4,541.2 million or US$149.5 million, a decrease of 0.4% from NT$4,560.3 million or US$150.1 million in the first quarter of 2017 and an increase of 0.8% from NT$4,504.0 million or US$148.3 million for the same period in 2016. 

Net earnings for the second quarter of 2017 was US$0.25 per diluted ADS, compared to US$1.82 per diluted ADS for the first quarter of 2017.  Net income for the first quarter of 2017 included US$62.8 million related to the completion of ChipMOS Shanghai equity interest transfer to Strategic Investors.  Net income attributable to equity holders of the Company for the second quarter of 2017 was NT$321.4 million or US$10.6 million, and NT$0.38 or US$0.01 per basic common share and NT$0.38 or US$0.01 per diluted common share, as compared to net income attributable to equity holders of the Company for the first quarter of 2017 of NT$2,380.1 million or US$78.3 million, and NT$2.82 or US$0.09 per basic common share and NT$2.77 or US$0.09 per diluted common share, and compared to net income attributable to equity holders of the Company in the second quarter of 2016 of NT$314.9 million or US$10.3 million, and NT$0.37 or US$0.01 per basic common share and NT$0.36 or US$0.01 per diluted common share.

S.J. Cheng, Chairman and President of ChipMOS, said, "We are pleased that we were able to expand our gross margin to 20.1% in 2Q17 from 17.9% in 1Q17 on relatively flat revenue.  This underscores the leverage in our business model, as we further improved our overall utilization level to 77%, led by strength in our higher margin testing business.  Revenue growth was offset primarily by a lower allocation from our largest DRAM customer, and continued China handset market softness, which is impacting small panel LCD driver demand.  We are confident we will be able to offset the softness with more financially attractive business diversification led by new programs we are now ramping with some of world's largest consumer and technology product companies, combined with the progress we are making at our Shanghai facility. We also expect DDIC demand will continue to improve as we benefit from the ongoing 4K2K/UHD TV market development, combined with new model/feature introductions and requirements from smartphones, including OLED, TDDI, narrow bezel and larger screens.  In addition to increased driver volumes, these trends mean longer test times.  With respect to the China market, we were pleased to report that our China JV is now funded, ramping production and qualifying a variety of new customer programs.  Our strategic partners' buildout of their semiconductor ecosystem is now expected to be even more aggressive and on a larger scale than originally contemplated.  The fact that ChipMOS is positioned as the OSAT services company within the Unigroup ecosystem gives us excellent growth prospects as DDIC ramps in the near-term followed by growth in domestic China memory production over the longer-term."

S.K. Chen, Chief Financial Officer of ChipMOS, said, "This was an unfavorable quarter on quarter comparison as net income in the first quarter of 2017 included US$62.8 million related to the completion of ChipMOS Shanghai equity interest transfer to Strategic Investors, which did not repeat in the second quarter of 2017.  Our gross margin moved to 20.1%, with some additional room for improvement likely as the DRAM revenue declining is being replaced with higher margin revenue opportunities.  We also expect to see some improvement for stabile to higher utilization levels.  We remain in a financially strong position, ending the second quarter with a balance of cash and cash equivalents of US$364.7 million , and a net debt balance of US$48.8 million with net debt to equity ratio of 8.3%.  This is after CapEx of US $45.9 million in the quarter, the majority of which was invested in expanding our DDIC test capacity to meet customer demand levels.  We continue to execute on our core business, target sustainable higher margin growth opportunities, and prioritize capital expenditures in support of our long-term growth strategy in both Taiwan and China ."

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