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ASE shares get a boost from Apple Watch launch

ASE shares get a boost from Apple Watch launch

Taipei, March 10 (CNA) Shares of Advanced Semiconductor Engineering Inc. (ASE, ???), the world's largest integrated circuit packaging and testing services provider, moved higher after Apple Inc. unveiled its Apple Watch overnight, dealers said. Because ASE is thought to be the sole IC packaging and testing services supplier for the Apple Watch, many investors expect the new device to bolster ASE's shipments, especially after the global semiconductor sector climbs out of its first quarter doldrums, they said. As of 11:14 a.m., shares of ASE had added 3.13 percent to NT$46.15 (US$1.46), with 35.13 million shares changing hands. The weighted index on the Taiwan Stock Exchange was down 0.33 percent at 9,530.96. Buying in ASE also spread to other Apple Watch concept stocks, such as TPK Holding Co. (??), which is believed to be supplying touch panels for the new gadget, and printed circuit board maker Kinsus Interconnect Technology Corp. (??). Shares of TPK had risen 1.54 percent to NT$230.50, and shares of Kinsus had gained 1.45 percent to NT$105.00 as of 11:14 a.m. "The launch of the Apple Watch triggered buying in ASE shares and other local suppliers soon after the local bourse opened today," Ta Ching Securities analyst Andy Hsu said. "The buying showed that investors are betting that Apple fans will rush to pick up the new product." In a news conference held in San Francisco overnight, Apple CEO Tim Cook unveiled the Apple Watch, saying that the Apple Watch is "the most personal device we have ever created." The gadget is a miniature computer consumers can wear on their wrists, but the product requires an iPhone to be fully functional. The Apple Watch is scheduled to go on sale on April 24 in select countries, such as the United States, Japan, Hong Kong and China, and Apple will start taking pre-orders online on April 10. "Many market analysts expect Apple to ship about 20 million Apple Watches in the first year. Shipments could double in the second year. ASE is the sole IC packaging and testing service provider and will no doubt become one of the major beneficiaries," Hsu said. Hsu said ASE shares have shown resilience in recent sessions even as the broader market has suffered a pullback because foreign institutional investors have increased their holdings of the stock on optimism that the Apple Watch will strengthen ASE's earnings. According to the TWSE, foreign institutional investors bought a net 2.18 million ASE shares Monday while selling a net NT$10.72 billion in local shares overall. ASE posted consolidated sales of NT$18.98 billion in February, down 18.7 percent from a month earlier due in part to the reduced number of working days in the month because of the Lunar New Year holiday. But February sales were still 16.9 percent higher than a year earlier. In the first two months of the year, ASE's consolidated sales rose 21.54 percent from the same period of 2014. The market has projected that ASE's first quarter revenue will fall about 13 percent from the previous quarter because the first quarter is traditionally slow for the semiconductor industry. "But after the slow season effects fade, the company will return to sales growth the rest of this year," Hsu said. He cautioned, however that "despite the optimism toward its shipments for 2015, investors should beware of strong technical resistance at around N$50 that could affect ASE shares in the short term." (By Jalen Chung, Han Ting-ting and Frances Huang)


Updated : 2021-09-18 06:47 GMT+08:00