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Siliconware shares up on Q4 sales report

Siliconware shares up on Q4 sales report

Taipei, Jan. 7 (CNA) Shares of Siliconware Precision Industries Co., one of Taiwan's leading integrated circuit packaging and testing service providers, moved higher Tuesday morning on better-than-expected fourth quarter sales, dealers said. The buying also reflected hopes that chip makers will shift their orders to Siliconware from rival Advanced Semiconductor Engineering Inc. (ASE) due to a partial shutdown of one of ASE's plants located in Kaohsiung due to pollution problems, they said. As of 11:28 a.m., shares of Siliconware had added 1.41 percent to NT$36.00 (US$1.20), with 2.81 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.42 percent at 8,535.48. "It was no surprise that Siliconware shares attracted buying this morning as investors hailed its sales report for the October-December period," KGI Securities analyst Eason Lee said. In a statement released Monday, Siliconware said it had consolidated sales of NT$18.84 billion in the fourth quarter of 2013, down 1.3 percent from the third quarter, which is the industry's peak season. The decline was smaller than the 5 percent drop anticipated by the market. In December alone, Siliconware's sales totaled NT$6.09 billion, down 1.77 percent from a month earlier but up 26.54 percent from a year earlier. It was the seventh consecutive month that the company's sales topped NT$6 billion. The strong fourth quarter helped boost Siliconware's 2013 consolidated sales to a record NT$69.36 billion, up 7.27 percent from a year earlier. "Siliconware benefited from solid demand for communications devices in the fourth quarter, which helped the company offset the slow season impact in the quarter to some extent," Lee said. Siliconware saw solid demand from communications device suppliers, in particular low cost smartphone and tablet computer makers in China, and gaming console manufacturers in the quarter, market analysts said. "I estimate that Siliconware's capacity utilization in the fourth quarter hit about 90 percent. Although the number was lower than the 94-95 percent recorded in the third quarter, it was high for the traditionally slow fourth quarter," Lee said. Lee said his brokerage expects Siliconware will post NT$0.62 in earnings per share for the fourth quarter, compared with NT$0.70 in EPS recorded in the third quarter. "Investors are betting that IC suppliers have shifted their orders to Siliconware from ASE in the first quarter, which could continue to boost Siliconware's shipments in the current quarter and further offset the usual first quarter sales lag," Lee said. "In addition, the IC industry will emerge from inventory adjustments in the second quarter. Siliconware is expected to secure more orders from fabless IC designers, such as U.S.-based Qualcomm Inc. and Taiwan's MediaTek Inc., next quarter," Lee said. Lee cautioned, however, that it may not be easy for Siliconware's share price to make a breakthrough for the time being amid concerns that Wall Street will soon undergo a major correction after repeatedly hitting fresh highs. "Once Wall Street pulls back, foreign investors could dump local large-cap stocks like Siliconware," he said. (By Frances Huang)