PowerTech Technology, Taiwan’s major semiconductor assembly and test provider, reported an 18% decline in quarterly profit as the Taiwan dollar’s sharp appreciation wiped out gains from stronger revenue.
The company posted second-quarter net income of NT$960 million ($31.3 million), down from NT$1.17 billion in the previous quarter. Foreign exchange losses reached NT$6.7 billion ($220 million) during the period, significantly pressuring the bottom line. Earnings per share fell to NT$1.3 from NT$1.58 in the first quarter.
PowerTech joins other Taiwan semiconductor companies grappling with currency headwinds as the NT dollar appreciated more than 10% in the second quarter against the US dollar. Industry analysis shows that every 1% gain in the Taiwan dollar typically reduces foundry gross margins by 0.3% to 0.5%.
Revenue climbed 16.6% quarter-over-quarter to NT$18.06 billion ($589 million), driven by strong demand for memory packaging services. The mobile memory segment benefited from spillover orders, posting double-digit growth both sequentially and year-over-year. Enterprise solid-state drive demand also contributed to growth.
Chairman Tsai Tu-kung said the company expects positive revenue growth in the third quarter, with margins potentially recovering to previous levels if the exchange rate stabilizes around NT$29.5 per dollar. The company is also benefiting from the broader shift of chip orders from China to Taiwan, particularly in logic chip assembly and testing services.
PowerTech is ramping up capital expenditure from an initially planned NT$15 billion ($489 million) to over NT$19 billion ($620 million) this year. The investment focuses on advanced packaging technologies, including large-size fan-out panel-level packaging that has gained customer approval.
The company’s capacity utilization rates stood at approximately 80% for assembly and 70% for testing in the second quarter. Assembly utilization is expected to rise to 85% in the third quarter while testing remains around 70%.
CEO Hsieh Yung-ta noted that global trade uncertainties and potential tariff adjustments continue to influence customer ordering patterns, with clients placing orders earlier as a precautionary measure.
