Siliconware Q3 net profit falls on slowing demand

TAIPEI

Siliconware, Taiwan's No. 2 chip packaging firm, posted a 37-per cent drop in quarterly profit on Wednesday and forecast weak sales into the current quarter, as reduced demand hurt chip prices.

Siliconware Precision Industry Co. Ltd made a net profit of T$3.186 billion ($96 million) for the quarter that ended in September.

The profit was lower than the T$5.06 billion recorded a year ago but was higher than a consensus forecast of T$2.84 billion in a poll of 10 analysts compiled by Reuters Estimates.

Siliconware also said that its operating profit margin would be about 14-16 per cent in the fourth quarter, down from 18 percent in the third, while sales would decline 8-13 per cent over the same period.

The company's results were announced as the Taipei Stock market closed on Wednesday, when Siliconware shares rose 6.5 per cent against a 0.15 per cent rise in the main TAIEX index. Its shares are down nearly 50 per cent this year, amid a broader slowdown in the highly cyclical chip sector.

Siliconware competes with sector leader Advanced Semiconductor Engineering Inc (ASE) in chip packaging.

BNP Paribas downgraded Siliconware to "reduce" from "hold" in September, and cut its price target for ASE early this month, citing slower demand for chips and a bleak global Outlook.