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ChipMOS, Chipbond may further raise backend quotes in 2H21

Backend houses ChipMOS Technologies and Chipbond Technology are expected to raise again their backend service quotes later in the second half of 2021, as robust demand for car-use display driver ICs (DDI) and NOR flash chips continues to fill their factory capacities, according to industry sources.

Taiwan's DDI vendors including Novatek Microelectroncis and Himax Technologies are set to ramp up shipments of both LCD and OLED automotive DDI chips in the third quarter as they have just passed strict client validations after two years of deployments in such chips, the sources said, and they mainly rely on ChipMOS and Chipbond for testing and packaging services, the sources said.

Both backend houses are expected to sustain full capacity utilization throughout 2021 and will surely raise their service quotes later in the year amid their increasingly tight capacity supply, the sources noted. Their additional high-end testing capacities for DDI chips and memory chips have been fully booked soon after they began purchasing new testing machines, the sources continued.

Besides serving DDI chips vendors, ChipMOS also provides NAND testing and packaging services for memory module makers including Adata Technology, Phison Electronics and Team Group. It has also landed big orders from Winbond and Macronix International for processing DRAM and NOR flash chips.

The company saw its June, second-quarter and first-half 2021 revenues hit new highs. June revenues rose 0.93% sequentially and 32.36% on year to NT$2.36 billion (US$84.28 million), and second-quarter sales gained 8.01% sequentially and 28.65% on year reaching NT$6.986 billion, while January-June incomes advancing 22.08% on year to NT$13.448 billion.

Chipbond also posted record business results for the same periods. Its June sales increased 0.2% sequentially and 40.4% on year to NT$2.351 billion, second-quarter revenues expanded 8.6% sequentially and 39% on year to NT$6.971 billion, and first-half 2021 incomes leaped 29.47% on year reaching NT$13.39 billion.

The company is expected to see its revenue contribution ratio for non-DDI backend services rise to 30% in 2021, given its increasing presence in the supply chains of international vendors of 5G PAs for iPhones and Android handsets, the sources said.