ChipMOS(US:IMOS)2024-02-22 15:28Financial Data and Key Metrics Changes - Q4 2023 revenue increased by 22.2% compared to Q4 2022 and was up 2.6% from Q3 2023 [4] - Full year 2023 revenue declined by 9.2% compared to 2022 due to industry headwinds and inventory corrections [4] - Q4 gross margin increased by 560 basis points to 20.1% from 14.5% in Q4 2022, and increased by 420 basis points compared to Q3 2023 [5] - Overall gross margin for 2023 decreased by 430 basis points to 16.6% compared to 2022 [13] - Net earnings in Q4 2023 tripled to NT$0.66 from NT$0.22 in Q4 2022 but decreased from NT$0.80 in Q3 2023 [5] - Total assets at the end of Q4 2023 were NT$46,161 million, with total liabilities at NT$21,307 million [15] Business Line Data and Key Metrics Changes - Assembly represented 23.2% of Q4 revenue, mixed-signal and memory testing represented around 19.9%, and wafer bumping represented around 20.4% of Q4 revenue [5] - Memory products accounted for about 36.2% of total Q4 revenue, with memory product revenue up 9.5% compared to Q3 2023 [6] - DRAM revenue increased by 28.4% compared to Q3 2023, representing about 16.9% of total Q4 revenue [6] - Gold bump revenue decreased by 9% compared to Q3 2023, while DDIC revenue was up by 0.9% compared to Q3 2023 [7] Market Data and Key Metrics Changes - Total revenue from Automotive and Industrial was up 6.9% compared to Q3 and represented about 21.2% of Q4 revenue [8] - Smartphones represented about 35.2% of Q4 revenue, increasing by 7.3% compared to Q3 [8] - Revenue from Automotive panels increased by 11.8% from Q3, accounting for more than 25% of Q4 DDIC revenue [7] Company Strategy and Development Direction - The company plans to invest conservatively in 2024, similar to 2023, focusing on Green Energy, Automation, Robotics, and AI [19] - The company aims to maintain its competitive advantage by investing in R&D and developing core technologies [34] - The Board approved a dividend of TWD1.8 per common share, reflecting the company's strong market position and focus on shareholder value [20] Management's Comments on Operating Environment and Future Outlook - The company expects Q1 2024 to be the trough quarter, with operating momentum improving in the second half of 2024 [18] - Management noted that while there is softness in end product demand for certain products, Automotive panel and OLED demand are expected to remain stable [19] - The company anticipates positive annual revenue growth in 2024 despite cost increases from green energy requirements [31] Other Important Information - The effective tax rate for 2024 is expected to be around 17% to 19% [25] - The company invested NT$1,499 million in CapEx in Q4 2023 and NT$3,228 million in CapEx for the full year 2023 [17] Q&A Session Summary Question: Why did gross margin go up so much in Q4? - Management attributed the increase to lower electricity charges, reduced gold material charges, and decreased depreciation [22] Question: Could you provide a more detailed outlook about Q1 2024, for revenue and gross margin? - Management expects Q1 2024 to be the normal trough quarter, with operating momentum improving throughout the year [24] Question: What is your CapEx, depreciation, and effective income tax rate for 2024? - CapEx is expected to be around 15% of annual revenue, with depreciation rates increasing by 1% to 3% quarterly and an effective tax rate of 17% to 19% [25] Question: Please give us more color on the CapEx increase QoQ from DDIC? - CapEx was mainly used for high-end testers in Q4 2023 [26] Question: What is the DDIC high-end tester utilization rate after the Lunar New Year holiday? - The high-end tester utilization rate remains high, while mid to low-end tester utilization has declined [28] Question: Please give us more color about revenue for the first half and second half of 2024? - Estimated revenue for the first half is around 46% to 47%, and for the second half, around 53% to 54% [30] Question: Comparing revenue and gross margin for the growth momentum of 2024, which one could perform better? - Positive revenue growth is expected, but cost increases from green energy requirements may impact gross margin [31] Question: The Company benefited from automotive market demand in 2023, however, the end demand seems to be slowing down. What can you comment on this segment in 2024? - Management expects the automotive segment to be flattish year-over-year in 2024 [33] Question: Is there any plan for high-end tester capacity expansion in 2024? - Capacity expansion will depend on customer demand and utilization levels [36]