Taiwan’s bullish ChipMOS to expand capacity amid chip demand boom

22, Mar. 2021

ChipMOS Technologies chairman S.J.Cheng expects positive results in 2021 because of the continuing demand for chips across various sectors.(Photo courtesy of ChipMOS Technologies Inc.)
ChipMOS Technologies chairman S.J.Cheng expects positive results in 2021 because of the continuing demand for chips across various sectors.(Photo courtesy of ChipMOS Technologies Inc.)

By Gloria Cho

TAIPEI, NNA— Steaming ahead from its healthy performance last year, Taiwan's ChipMOS Technologies Inc. expects to see a double-digit growth of at least a 10 percent in revenue in 2021, helped by strong demand and price hikes due to the global chip shortage.

Top executives of the leading outsourced driver IC and memory-chip tester and packager gave a rosy outlook at an earnings teleconference on Tuesday.

Chairman S.J.Cheng told investors the semiconductor company will continue to see good growth momentum because of increasing semiconductor demand for its memory-chip packaging and testing services, and display driver ICs (DDIC).

The company expects better profits and gross margin to rise beyond the 21.9 percent achieved last year.

Considering its positive outlook for the first half of this year and bumper contracts secured so far, ChipMOS is optimistic of a double-digit growth, said Silvia Su, its vice-president of finance and accounting management center.

ChipMOS expects the current quarter to perform equally as well as the previous quarter which hit a record NT$6.31 billion ($223.26 million). Display driver ICs was the biggest revenue generator in the last quarter of 2020, accounting for 30 percent, Cheng said.

ChipMOS has raised prices twice this quarter by 5 to 10 percent on average mainly due to the higher costs of raw materials and surging demand, he said.

Demand has soared for driver ICs for notebooks and TV displays, as well as for touch and display driver integration chips for smartphones.

ChipMOS plans to devote 20 to 25 percent of its revenue this year to expanding capacity to cope with the rising demand.

The global dearth of semiconductors has pushed demand for chips by car makers and electronics producers plagued by production delays.

In 2020, ChipMOS generated revenues amounting to NT$23 billion, reflecting an increase of 13.1 percent from NT$20.3 billion in 2019.

It logged record sales of NT$6.31 billion in the last quarter of 2020, an increase of 11 percent from NT$5.7 billion in the third quarter. The fourth-quarter revenue also marked a 13.3 percent jump from the same period in 2019.

The company attributes its improved performance to growth in servers, cloud computing, IoT, mobile and memory products.

The memory segment accounted for around 42 percent of Q4 revenue, rising more than 10 percent from the previous quarter and 11.6 percent from a year ago. The 18.6 percent growth in this segment in 2020 reflects the remarkable jump in demand.

The driver-IC category also saw healthy growth of 11 percent in 2020, bolstered by higher prices as TDDI (Touch with Display Driver) volumes spiked due to new smartphone launches.

The first two months have continued to perform well, with February achieving NT$1,957.4 million in revenue, an increase of 3.7 percent from a year ago.

"High-end DDIC test and memory lines remain at capacity and fully utilized, which continues the positive trends from 2020," said the company in a press statement.

With facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan, ChipMOS serves a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries.