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TrendForce points out that tech giant ASE took home a revenue of US$1.12 billion in 1Q19, a YoY fall of 7.3%. Siliconware Precision Industries' (SPIL) revenue stood at US$600 million, a YoY decline of 7.7%. The decline of these two companies may be invariably attributed to the downslide in smartphone sales. Second place Amkor's revenue 1Q also suffered a YoY drop of 12.7%, coming to US$890 million, with revenues from mobile phones and computer packaging experiencing the most significant slides.
1Q19 revenue performances of the three greats of China, JCET, TFME and TSHT, aren't looking so great as well, dragged down to a double digit decline YoY by the ever-present US-China trade war and a decelerating Chinese economy. The escalating trade dispute and weakening demand are feared to maintain its grip on revenue performances in packaging and testing.
Fifth place PTI had to cut memory prices due to exceeding levels of inventory and other factors since 4Q18, which in turn impacted business performance in packaging and testing, causing revenue for the first quarter to decline by up to 14.2% YoY.
What's worth noticing is that King Yuan Electronics (KYEC) and Chipbond Technology were the only two companies to register positive growth in 1Q19. In developing 5G testing, KYEC has a unique solution of its own for testing systems-on-a-chip (SoC ) and basic equipment, maintaining close relations with its customers and providing real-time testing assistance to satisfy demands.
This is tantamount to KYEC expanding its collaboration model with Qualcomm: Besides renting cleanrooms, they go on to devote efforts to collaborative R&D projects for items in 5G chip development and testing, bringing revenue growth up to 8.6% in 1Q19, and may hopefully sustain this growth entering the next half-year.
Chipbond's revenue grew by 14.7% YoY in 1Q thanks to China client and panel giant BOE's increasing demands for Chip-On-Film (COF) technology and TDDI. As BOE's panel capacity remains in full swing looking forward, revenue performance for the remaining 2019 year will continue to look up.
On the whole, global revenue performance for 1Q19 was affected by the US-China trade dispute, sliding phone sales and oversupply in the memory market, causing revenues to register a drastic drop.
Furthermore, recent developments in the US-China trade dispute show Trump announcing a third wave of tariffs beginning from May 10, imposed on US$200 billion worth of Chinese imports at an increased rate of 25% up from 10%. If both sides of the trade war cannot reach an agreement within a month, then a fourth wave of tariffs will be imposed on US$325 billion worth of goods at a rate of 25%, possibly targeting smartphones, notebook PCs and other consumer products as well.
On May 13th, China's government has also responded in retaliation to America's policies,planning to impose additional tariffs of 10% to 25% on US$60 billion of American imports from June 1st onwards, including beef, coffee, chemicals among other things in the list.
In light of the impacts from the US-China trade dispute, sliding phone sales worldwide and other negative factors, we at TrendForce hold a cautious outlook on future revenue performances in packaging and testing.
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