ChipMOS(US:IMOS)2019-03-07 18:08Financial Data and Key Metrics Changes - In Q4 2018, total revenue was US$162.4 million, with net earnings of US$16.9 million, translating to $0.46 per basic ADS, an increase from $0.37 per basic ADS in Q3 2018 [15][16] - For the full year 2018, total revenue reached US$603.8 million, with net earnings of $0.90 per basic ADS, down from $2.34 per basic ADS in 2017 [15][16] - Gross margin improved to 22.8% in Q4 2018, up from 19.5% in Q3 2018, reflecting operational efficiency and a favorable product mix [6][7] Business Line Data and Key Metrics Changes - The revenue breakdown for Q4 2018 was 23.5% from testing, 24.6% from assembly, 33.7% from LCD driver business, and 18.2% from bumping [16] - The DDIC business grew approximately 18.2% in 2018 compared to 2017, representing about 31.6% of total revenue [8] - TDDI products accounted for 28.3% of DDIC revenue in Q4, up from 22.8% in Q3, indicating strong demand in this segment [9] Market Data and Key Metrics Changes - The memory product revenue declined about 5% in Q4 compared to Q3, aligning with broader market trends [10] - The company reported a 15.93% revenue increase in January 2019 and a 9.75% increase in February 2019 compared to the same periods in the previous year, indicating a strong start to 2019 [21] Company Strategy and Development Direction - The company aims for high single-digit organic growth in 2019, focusing on LCD driver products, particularly TDDI and fine pitch COF smartphone models [21] - Strategic investments will continue in DDIC testing and 12-inch COF assembly capacity to meet strong demand [13] - The company has secured long-term contracts with customers, ensuring utilization rates and reducing market risk [13] Management Comments on Operating Environment and Future Outlook - Management noted industry softness in Niche DRAM due to trade tensions but emphasized the company's diverse customer base and geography as a growth driver [7] - The company expects memory pricing to stabilize in the second half of 2019 after significant drops in Q1 [23] - The 5G buildout is anticipated to be a major catalyst for growth in the semiconductor industry over the next two years [12] Other Important Information - The company completed a capital reduction plan in Q4 2018, reducing the number of common shares by around 15%, which is expected to enhance shareholder returns [11] - A cash dividend distribution of around NT$1.2 per share was approved, alongside a cash dividend of NT$0.3 [14] Q&A Session Summary Question: What are the biggest growth drivers for 2019? - Management identified LCD driver products, especially TDDI and fine pitch COF smartphone models, as key growth drivers, with an internal goal for organic growth set at high single-digit percentages [21] Question: When might memory pricing stabilize? - Management indicated that DRAM pricing has seen significant drops, with expectations for recovery signs in the second half of 2019 once customer inventories are cleared [23]