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ChipMOS holds back on DRAM expansion

Posted: 08 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM pricing? LCD drivers? flash memory?

ChipMOS Technologies CFO SK Chen disclosed that the company will lower its capex for 2007 due to unclear market conditions, particularly in DRAM pricing, according to a report from Digitimes.

Chen stated that they will be conservative in their investment in DRAM capacity and expects 2007 capex to be lower than their initial plan of $260 million. The company did not specify the sum of the revised capex plan. The company did not indicate the sum for the revised capex plan.

The Taiwan-based company reported Q1 unaudited consolidated revenues of $172.9 million, a 31 percent increase from $131.4 million in the same period in 2006, and a decrease of 3.3 percent $178.1 million in Q4 2006.

"The first quarter 2007 results came in as expected with revenue, gross margin and net income being in line with guidance. We achieved better than seasonally normal results due to strength in our DRAM and flash businesses, which was affected by declines in the LCD driver IC business and fewer working days in February," said ChipMOS chairman and CEO SJ Cheng in a press release.

Chen added, "While we continue to stress profitability and free cash flow generation efforts and would always like to achieve improvements, the sequentially lower gross margin reflects the lower utilization level in our LCD driver business and product mix. We expect the business environment and demand levels in LCD driver IC to improve starting in the second quarter due to recovery of end market demand. We also expect a continued ramping of our flash business."

The company expects Q2 revenues to be around $173- to $182 million, which would represent a zero to 5 percent sequential growth compared to Q1.

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