Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the First Quarter of 2017

EMS Operations

  • Gross margin for our EMS operations amounted to 10.6% during the quarter, up by 0.2 percentage points from 4Q16.
  • Capital expenditures for our EMS operations amounted to US$3 million during the quarter.

Substrate Operations

  • PBGA substrate manufactured by ASE amounted to NT$2,090 million for the quarter, down by NT$81 million, or by 4% from 4Q16. Of the total output of NT$2,090 million, NT$892 million was from sales to external customers.
  • Gross margin for substrate operations was 12.0% for the quarter, down by 1.8 percentage points from 4Q16.
  • In 1Q17, our internal substrate manufacturing operations supplied 27% (by value) of our total substrate requirements.

Customers
IC ATM consolidated Basis

  • Our five largest customers together accounted for approximately 31% of our total net revenues in 1Q17, compared to 33% in 4Q16. No customer accounted for more than 10% of our total net revenues in 1Q17.
  • Our top 10 customers contributed 47% of our total net revenues for the quarter, compare to 50% in 4Q16.
  • Our customers that are integrated device manufacturers or IDMs accounted for 36% of our total net revenues for the quarter, compared to 35% in 4Q16.

EMS Basis

  • Our five largest customers together accounted for approximately 81% of our total net revenues in 1Q17, compared to 83% in 4Q16.  One customer accounted for more than 10% of our total net revenues in 1Q17.
  • Our top 10 customers contributed 90% of our total net revenues during the quarter, compared to 91% in 4Q16.

ASE-SPIL TRANSACTION UPDATE

  • ASE and SPIL submitted the required materials to the Taiwan Fair Trade Commission (the "TFTC") on July 29, 2016 and the TFTC issued a no objection letter in respect of the transaction.
  • ASE and SPIL submitted the required materials to the Ministry of Commerce of the People's Republic of China ("MOFCOM") on August 25, 2016.  MOFCOM formally accepted the parties' notification materials on December 14, 2016. On April 12, 2017, ASE received MOFCOM's notice extending its review to Phase III review.
  • The parties are continuing to cooperate with the U.S. Federal Trade Commission's ("FTC") investigation, and are working toward a goal of successfully completing the investigation as soon as possible.

OUTLOOK
Based on our current business outlook and exchange rate assumptions, management projects overall performance for the second quarter of 2017 to be as follows:

  • IC ATM 2Q17 business and gross margin should both be similar to previous quarter;
  • EMS 2Q17 business should be similar to the average of 2Q16 and 3Q16 levels;
  • EMS 2Q17 gross margin should be similar to previous quarter.

About ASE, Inc.
ASE is among the world's leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services.  With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services.  For more information, please visit our website at http://www.aseglobal.com.

Safe Harbor Notice

This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended.  Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release.  The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors.  For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2016 Annual Report on Form 20-F filed on April 21, 2017.

Supplemental Financial Information

IC ATM Consolidated Operations

Amounts in NT$ Millions

1Q/17

4Q/16

1Q/16

Net Revenues

38,385

43,463

35,543

Revenues by Application




Communication

50%

53%

51%

Computer

11%

10%

12%

Automotive, Consumer & Others

39%

37%

37%

Packaging Operations

Amounts in NT$ Millions

1Q/17

4Q/16

1Q/16

Net Revenues

31,061

35,242

28,597

Revenues by Packaging Type




Bumping, Flip Chip, WLP & SiP

31%

32%

29%

IC Wirebonding

58%

57%

62%

Discrete and Others

11%

11%

9%

Capacity




CapEx (US$ Millions)*

120

87

62

Number of Wirebonders

15,963

15,897

15,629





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