ChipMOS(US:IMOS)2023-05-05 02:49Financial Data and Key Metrics Changes - Q1 2023 revenue was NT$4,605 million, a decrease of 1.7% from Q4 2022. Gross margin was 12.4%, down 210 basis points from Q4 2022. Net earnings increased 27% to NT$0.28 per share compared to NT$0.22 in Q4 2022 [5][9][10] - Overall utilization rate increased to 52% in Q1 2023, with assembly utilization at 42% and testing average at 55% [5] - Net profit attributable to the company was NT$202 million in Q1, reflecting a 30.7% increase compared to Q4 2022 [11] Business Line Data and Key Metrics Changes - Assembly represented 23.4% of Q1 revenue, mixed-signal and memory testing around 22.3%, and wafer bumping approximately 19.6% [5] - DDIC products accounted for 35% of revenue, with gold bumping at 18%. Memory products represented 36.3% of total revenue, down 11.1% from Q4 2022 [6] - Revenue from DRAM and SRAM was about 15%, while mixed-signal products contributed around 10.8% [6] Market Data and Key Metrics Changes - Total revenue from automotive and industrial markets represented 23.3% of Q1 revenue, increasing by 10.8%. Smartphones and TVs accounted for 29% and 17% of revenue, respectively [7] - TDDI revenue increased about 15%, representing around 17% of Q1 DDIC revenue, while OLED accounted for about 9% [7] Company Strategy and Development Direction - The company expects Q1 to be the bottom, with gradual recovery anticipated throughout 2023, despite ongoing macroeconomic pressures [15] - A cautious approach to capital expenditures is planned, focusing on investments in green energy, AI, and automation [16] - The board approved a dividend of NT$2.3 per common share, pending shareholder approval, reflecting the company's strong market position and commitment to shareholder value [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are headwinds from inflation and inventory adjustments, there are signs of demand recovery in specific areas, particularly in automotive panels and TDDI [15] - Memory product recovery is expected to lag behind DDIC and mixed-signal products, with a more noticeable rebound anticipated starting in Q3 [15][27] Other Important Information - Total assets at the end of Q1 2023 were NT$45,710 million, with total liabilities at NT$20,663 million and total equity at NT$25,047 million [12] - Cash and cash equivalents increased to NT$11,736 million, with a net free cash inflow of NT$1,033 million for Q1 2023 [13] Q&A Session Summary Question: Impact of lower gross margin in Q1 - Management indicated that March revenue grew about 28% month-over-month, but negative factors still affected gross margin, including a weaker U.S. dollar [18][19] Question: Tax rate and investment tax credit - The average tax rate is expected to be between 19% to 21%, influenced by unrealized items and investment tax credits [20] Question: Performance of smart mobile segment - Encouraging signs were noted in TDDI and OLED demand, particularly from the repair market [21][22] Question: Causes for lower gross margin - Increased gold consumption in gold bumping led to higher raw material costs, affecting gross margin [23] Question: Growth expectations for Q2 - Significant growth in DDIC revenue is expected due to reduced wafer bank and new orders from customers [25][26] Question: Visibility for memory segment recovery - Recovery in the memory segment is anticipated to be more evident starting in Q3, with NOR, NAND, and niche DRAM expected to perform better than commodity DRAM [27]