Sub-contractor Update: Mixed Bag in 2002 Revenue

04/01/2003

By JEFFREY C. DEMMIN

Click here to enlarge image

The assembly and test sub-contracting business made a decent rebound in 2002, but the nature of the bounce varied somewhat at the major sub-contractors. The quarterly financial results for 2002 tell an interesting story.

Figure 1. Quarterly revenue at assembly and test sub-contractors over the last four quarters. Annual revenue at assembly and test sub-contractors over the last three years.Click here to enlarge image

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Each company in this study had a significant upward trend during 2002 (Figure 1), although only ASE and STATS were able to sustain revenue growth in each quarter of the year. OSE and Amkor slid a bit in Q4 after good growth in the middle of the year. SPIL, the steadiest performer in the list, had just a minor dip in Q3. One tidbit shown in Figure 1 is that ASE came within about 1 percent of Amkor's industry-leading revenue in Q4, returning to the situation seen in the Q1 data. Table 1 lists the 2002 revenue for each company.

Table 1. Total assembly and test revenue in 2002 at seven of the largest sub-contractors. (Note: The results for ASAT are for its four fiscal quarters most closely matching the 2002 calendar year.)Click here to enlarge image

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Table 2. Revenue growth from 2001 to 2002 at seven of the largest packaging and test sub-contractors. Click here to enlarge image

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Table 2 ranks the seven sub-contractors by their revenue growth in 2002 compared to 2001. At the top is STATS, which grew more than 50 percent in 2002. STATS had one of the worst drops from 2000 to 2001 ($331 million to $146 million, or 56 percent), so it had more headroom for a rebound. Still, it is a significant feat to grow a business by more than half in a year in any situation. SPIL's numbers are perhaps more impressive, though. It grew more than 30 percent in 2002, coming in second on the list in Table 2, even though it had the smallest relative drop in 2001 ($606 million to $490 million, or 19 percent).

Table 3. The ratio of revenue in 2002 compared to 2000 at seven of the largest packaging and test sub-contractors.Click here to enlarge image

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A longer time scale shows similar trends among the sub-contractors evaluated here. The typical pattern is a big drop from 2000 to 2001 and then a partial rebound in 2002, reflecting the trend in the industry as a whole. The lone exception is SPIL, which performed the trick of exceeding its 2000 revenue in 2002. Few companies in the semiconductor industry can claim more revenue last year than at the height of the boom in 2000. Table 3 quantifies the business in 2002 compared to 2000.