FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

October 27, 2017

 

Commission File Number 001-16125
   
   
Advanced Semiconductor Engineering, Inc.
( Exact name of Registrant as specified in its charter)
   

26 Chin Third Road 

Nantze Export Processing Zone 

Kaoshiung, Taiwan

 Republic of China 

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F         Form 40-F     

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes          No

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

Not applicable

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    ADVANCED SEMICONDUCTOR
ENGINEERING, INC.
 
       
       
Date: October 27, 2017 By: /s/ Joseph Tung  
  Name:     Joseph Tung  
  Title: Chief Financial Officer  

 

 

Advanced Semiconductor Engineering, Inc.

 

 

 

 

FOR IMMEDIATE RELEASE

 

IR Contact:

Iris Wu, Manager

irissh_wu@aseglobal.com

Tel: +886.2.6636.5678

http://www.aseglobal.com

Grace Teng, Manager

grace_teng@aseglobal.com

Tel: +886.2.6636.5678

 

 

ADVANCED SEMICONDUCTOR ENGINEERING, INC. REPORTS UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2017

 

Taipei, Taiwan, R.O.C., October 27, 2017 – Advanced Semiconductor Engineering, Inc. (TAIEX: 2311, NYSE: ASX) (“We”, “ASE”, or the “Company”), among the world’s leading companies in semiconductor packaging and testing, today reported unaudited net revenues1 of NT$73,878 million for the third quarter of 2017 (3Q17), up by 2% year-over-year and up by 12% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$6,336 million, up from a net income attributable to shareholders of the parent of NT$5,502 million in 3Q16 and down from a net income attributable to shareholders of the parent of NT$7,847 million in 2Q17. Basic earnings per share for the quarter were NT$0.76 (or US$0.125 per ADS), compared to basic earnings per share of NT$0.72 for 3Q16 and NT$0.97 for 2Q17. Diluted earnings per share for the quarter were NT$0.69 (or US$0.115 per ADS), compared to diluted earnings per share of NT$0.64 for 3Q16 and NT$0.89 for 2Q17.

 

RESULTS OF OPERATIONS

 

3Q17 Results Highlights – Consolidated

lNet revenue contribution from packaging operations, testing operations, EMS operations, substrates sold to third parties and others, each represented approximately 45%, 9%, 45%, 1% and 0%, respectively, of total net revenues for the quarter.

 

lCost of revenue was NT$60,030 million for the quarter, up from NT$53,910 million in 2Q17.

 

-Raw material cost totaled NT$36,018 million for the quarter, representing 49% of total net revenues.

 

-Labor cost totaled NT$9,110 million for the quarter, representing 12% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$6,938 million for the quarter.

 

lGross margin increased 0.4 percentage points to 18.7% in 3Q17 from 18.3% in 2Q17.

 

lOperating margin was 9.6% in 3Q17 compared to 7.9% in 2Q17.

 

lIn terms of non-operating items:

 

-Net interest expense was NT$350 million.

 

-Net foreign exchange gain of NT$33 million was primarily attributable to the depreciation of the U.S. dollar against the NT dollar.

  

 

 

1 All financial information presented in this press release is unaudited, consolidated and prepared in accordance with Taiwan-IFRS (International Financial Reporting Standards as endorsed for use in the R.O.C.). Such financial information is generated internally by us and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by our independent auditors, to which we subject our audited consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results of operations for any future period.

 

1

October 27, 2017

Advanced Semiconductor Engineering, Inc.

 

 

 

 

-Gain on valuation of financial assets and liabilities was NT$598 million.

 

-Net gain on equity-method investments was NT$323 million, including NT$389 million of the share of gain from our investment in Siliconware Precision Industries Co., Ltd. (“SPIL”).

 

-Other net non-operating income of NT$143 million were primarily related to miscellaneous income. Total non-operating income for the quarter was NT$747 million.

 

lIncome before tax was NT$7,815 million for 3Q17, compared to NT$11,390 million in 2Q17. We recorded income tax expenses of NT$1,083 million for the quarter, compared to NT$3,207 million in 2Q17.

 

lIn 3Q17, net income attributable to shareholders of the parent was NT$6,336 million, compared to net income attributable to shareholders of the parent of NT$5,502 million in 3Q16 and net income attributable to shareholders of the parent of NT$7,847 million in 2Q17.

 

lOur total number of shares outstanding at the end of the quarter was 8,724,619,364, including treasury stock owned by our subsidiaries. Our 3Q17 basic earnings per share of NT$0.76 (or US$0.125 per ADS) were based on 8,350,512,180 weighted average number of shares outstanding in 3Q17. Our 3Q17 diluted earnings per share of NT$0.69 (or US$0.115 per ADS) were based on 8,624,804,592 weighted average number of shares outstanding in 3Q17.

 

3Q17 Results Highlights – IC ATM2

lCost of revenues was NT$31,368 million for the quarter, up by 4% sequentially.

 

-Raw material cost totaled NT$9,715 million for the quarter, representing 23% of total net revenues.

 

-Labor cost totaled NT$7,870 million for the quarter, representing 19% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$6,463 million for the quarter.

 

lGross margin increased 2 percentage points to 25.1% in 3Q17 from 23.1% in 2Q17.

 

lOperating margin was 13.7% in 3Q17 compared to 10.5% in 2Q17.

 

3Q17 Results Highlights – EMS

lCost of revenues for the quarter was NT$29,691 million, up by 18% sequentially.

 

-Raw material cost totaled NT$26,400 million for the quarter, representing 80% of total net revenues.

 

-Labor cost totaled NT$1,226 million for the quarter, representing 4% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$436 million for the quarter.

 

lGross margin decreased to 10.3% in 3Q17 from 11.1% in 2Q17.

 

lOperating margin increased to 4.3% in 3Q17 from 4.0% in 2Q17.

 

LIQUIdiTY AND CAPITAL RESOURCES

lCapital expenditures in 3Q17 totaled US$130 million, of which US$84million were used in packaging operations, US$29 million in testing operations, US$13 million in EMS operations and US$4 million in interconnect materials operations.

 

lAs of September 30, 2017, total unused credit lines amounted to NT$165,583 million.

 

lCurrent ratio was 1.37 and net debt to equity ratio was 0.20 as of September 30, 2017.

 

lTotal number of employees was 68,227 as of September 30, 2017, compared to 66,996 as of

 

 

2 ATM stands for Semiconductor Assembly, Testing and Material.

 

2

October 27, 2017

Advanced Semiconductor Engineering, Inc.

 

 

 

 

June 30, 2017.

 

Business Review

 

Packaging Operations3

lGross margin for our packaging operations during the quarter was 22.3%, up by 1.7 percentage points from 2Q17.

 

lCapital expenditures for our packaging operations amounted to US$84 million for the quarter, of which US$30 million were used in purchases of wafer bumping and flip chip packaging equipment, and US$54 million were used in purchase of common equipment, SiP equipment and wirebond packaging equipment.

 

Testing Operations

lDepreciation, amortization and rental expense associated with our testing operations amounted to NT$1,659 million during the quarter, down from NT$1,673 million in 2Q17.

 

lGross margin for our testing operations amounted to 37.8% during the quarter, up by 3.6 percentage points from 2Q17.

 

lCapital expenditures for our testing operations amounted to US$29 million during the quarter.

 

EMS Operations

lGross margin for our EMS operations amounted to 10.3% during the quarter, down by 0.8 percentage points from 2Q17.

 

lCapital expenditures for our EMS operations amounted to US$13 million during the quarter.

 

Substrate Operations

lPBGA substrate manufactured by ASE amounted to NT$2,178 million for the quarter, up by NT$34 million, or by 2% from 2Q17. Of the total output of NT$2,178 million, NT$948 million was from sales to external customers.

 

lGross margin for substrate operations was 13.1% for the quarter, down by 1.3 percentage points from 2Q17.

 

lIn 3Q17, our internal substrate manufacturing operations supplied 25% (by value) of our total substrate requirements.

 

Customers

IC ATM consolidated Basis

lOur five largest customers together accounted for approximately 36% of our total net revenues for the quarter and in 2Q17. One customer accounted for more than 10% of our total net revenues in 3Q17.

 

lOur top 10 customers contributed 50% of our total net revenues for the quarter, compared to 51% in 2Q17.

 

lOur customers that are integrated device manufacturers, or IDMs, accounted for 44% of our total net revenues for the quarter, compared to 43% in 2Q17.

 

EMS Basis

lOur five largest customers together accounted for approximately 80% of our total net revenues in 3Q17, compared to 79% in 2Q17. One customer accounted for more than 10%

 

 

3 IC packaging services include module assembly services.

 

3

October 27, 2017

Advanced Semiconductor Engineering, Inc.

 

 

 

 

of our total net revenues in 3Q17.

 

lOur top 10 customers contributed 89% of our total net revenues during the quarter, which remained the same as 2Q17.

 

outlook

Based on our current business outlook and exchange rate assumptions, management projects overall performance for the fourth quarter of 2017 to be as follows:

 

lIC ATM 4Q17 business and gross margin should both be similar with 3Q17 level;

 

lEMS 4Q17 business should be similar with IC ATM 4Q17 level;

 

lEMS 4Q17 gross margin should be above 1Q16 level.

 

About ASE, Inc.

ASE is among the world’s leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services. For more information, please visit our website at http://www.aseglobal.com.

 

Safe Harbor Notice

This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People’s Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2016 Annual Report on Form 20-F filed on April 21, 2017.

 

4

October 27, 2017

Supplemental Financial Information

 

IC ATM Consolidated Operations

Amounts in NT$ Millions 3Q/17 2Q/17 3Q/16
Net Revenues 41,854 39,048 43,006
Revenues by Application      
Communication 49% 48% 53%
Computer 10% 11% 12%
Automotive, Consumer & Others 41% 41% 35%

 

Packaging Operations

Amounts in NT$ Millions 3Q/17 2Q/17 3Q/16
Net Revenues 33,897 31,718 34,832
Revenues by Packaging Type      
Bumping, Flip Chip, WLP & SiP 32% 31% 33%
IC Wirebonding 57% 58% 57%
Discrete and Others 11% 11%

10%

Capacity      
CapEx (US$ Millions)* 84 161 112
Number of Wirebonders 16,083 16,118 15,905

 

Testing Operations

Amounts in NT$ Millions 3Q/17 2Q/17 3Q/16
Net Revenues 6,889 6,350 7,232
Revenues by Testing Type      
Final test 79% 83% 75%
Wafer sort 18% 14% 21%
Engineering test 3% 3% 4%
Capacity      
CapEx (US$ Millions)* 29 47 57
Number of Testers 3,739 3,796 3,725

 

EMS Operations

Amounts in NT$ Millions 3Q/17 2Q/17 3Q/16
Net Revenues 33,100 28,248 31,190
Revenues by End Application      
Communication 45% 48% 51%
Computer 14% 17% 16%
Consumer 26% 20% 20%
Industrial 8% 8% 7%
Automotive 6% 6% 5%
Others 1% 1% 1%
Capacity      
CapEx (US$ Millions)* 13 4 10

* Capital expenditure excludes building construction costs.

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data

(In NT$ millions, except per share data)

(Unaudited)

 

   For the three months ended  For the nine months ended
   Sep. 30
2017
  Jun. 30
2017
  Sep. 30
2016
  Sep. 30
2017
  Sep. 30 
2016
Net revenues:               
Packaging   32,880    30,494    33,449    93,180    91,663 
Testing   6,889    6,350    7,231    19,604    19,729 
Direct Material   948    928    805    2,768    2,456 
EMS   33,098    28,210    31,174    90,663    80,768 
Others   63    44    125    240    3,140 
Total net revenues   73,878    66,026    72,784    206,455    197,756 
                          
Cost of revenues4   (60,030)   (53,910)   (58,673)   (168,516)   (159,943)
Gross profit   13,848    12,116    14,111    37,939    37,813 
                          
Operating expenses:                         
Research and development   (2,986)   (2,952)   (2,947)   (8,701)   (8,300)
Selling, general and administrative4   (3,794)   (3,945)   (3,728)   (11,726)   (10,983)
Total operating expenses   (6,780)   (6,897)   (6,675)   (20,427)   (19,283)
Operating income   7,068    5,219    7,436    17,512    18,530 
                          
Net non-operating (expenses) income:                         
Interest expense – net   (350)   (365)   (478)   (1,150)   (1,536)
Foreign exchange gain (loss)   33    (201)   1,593    2,723    2,236 
Gain (loss) on valuation of financial assets and liabilities   598    800    (1,998)   (2,566)   (1,500)
Gain (loss) on equity-method investments4   323    253    454    405    1,098 
Others   143    5,684    (137)   6,126    (504)
Total non-operating income (expenses)   747    6,171    (566)   5,538    (206)
Income before tax   7,815    11,390    6,870    23,050    18,324 
                          
Income tax expense   (1,083)   (3,207)   (976)   (5,176)   (3,817)
Income from continuing operations and before non-controlling interest    6,732    8,183    5,894    17,874    14,507 
Non-controlling interest   (396)   (336)   (392)   (1,132)   (821)
                          
Net income attributable to shareholders of the parent    6,336    7,847    5,502    16,742    13,686 
                          
Per share data:                         
Earnings (losses) per share                         
– Basic   NT$0.76    NT$0.97    NT$0.72    NT$2.08    NT$1.79 
– Diluted   NT$0.69    NT$0.89    NT$0.64    NT$1.89    NT$1.50 
                          
Earnings (losses) per equivalent ADS                         
– Basic   US$0.125    US$0.160    US$0.113    US$0.340    US$0.276 
– Diluted   US$0.115    US$0.148    US$0.101    US$0.310    US$0.231 
                          
Number of weighted average shares used in diluted EPS calculation (in thousands)    8,624,804    8,604,623    8,252,369    8,266,095    8,272,939 
                          
Exchange rate (NT$ per US$1)   30.22    30.18    31.78    30.54    32.42 

 

 

 

 

4 As of September 30, 2017, we have completed the identification of the difference between the cost of the investment and our share of the net fair value of subsidiary and associates’ identifiable assets and liabilities. Accordingly, we retrospectively adjusted the provisional amounts recognized at the acquisition dates in May , July and November 2016, respectively.

 

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data – IC ATM

(In NT$ millions, except per share data)

(Unaudited)

 

   For the three months ended  For the nine months ended
   Sep. 30
2017
  Jun. 30
2017
  Sep. 30
2016
  Sep. 30
2017
  Sep. 30
2016
Net revenues:               
Packaging   33,897    31,718    34,832    96,676    94,609 
Testing   6,889    6,350    7,232    19,604    19,729 
Direct Material   1,048    960    920    2,943    2,652 
Others   20    20    22    64    63 
Total net revenues   41,854    39,048    43,006    119,287    117,053 
                          
Cost of revenues4   (31,368)   (30,021)   (32,040)   (90,941)   (88,696)
Gross profit   10,486    9,027    10,966    28,346    28,357 
                          
Operating expenses:                         
Research and development   (2,123)   (2,113)   (2,130)   (6,236)   (6,073)
Selling, general and administrative4   (2,639)   (2,812)   (2,646)   (8,301)   (7,957)
Total operating expenses   (4,762)   (4,925)   (4,776)   (14,537)   (14,030)
Operating income   5,724    4,102    6,190    13,809    14,327 
                          
Net non-operating (expenses) income:                         
Interest expense - net   (416)   (443)   (525)   (1,357)   (1,705)
Foreign exchange gain (loss)   129    (162)   1,504    2,835    2,032 
Gain (loss) on valuation of financial assets and liabilities   365    522    (1,987)   (3,185)   (1,420)
Gain (loss) on equity-method investments4   1,249    5,410    1,284    7,260    3,577 
Others   154    33    (152)   512    (425)
Total non-operating income (expenses)   1,481    5,360    124    6,065    2,059 
Income before tax   7,205    9,462    6,314    19,874    16,386 
                          
Income tax expense   (784)   (1,541)   (719)   (2,895)   (2,514)
Income from continuing operations and before non-controlling interest    6,421    7,921    5,595    16,979    13,872 
Non-controlling interest   (85)   (74)   (93)   (237)   (186)
                          
Net income attributable to shareholders of the parent    6,336    7,847    5,502    16,742    13,686 
                          

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data – EMS

(In NT$ millions, except per share data)

(Unaudited)

 

   For the three months ended  For the nine months ended
   Sep. 30
2017
  Jun. 30
2017
  Sep. 30
2016
  Sep. 30
2017
  Sep. 30
2016
Net revenues:               
Total net revenues   33,100    28,248    31,190    90,711    80,864 
                          
Cost of revenues   (29,691)   (25,127)   (28,066)   (81,067)   (73,173)
Gross profit   3,409    3,121    3,124    9,644    7,691 
                          
Operating expenses:                         
Research and development   (877)   (859)   (841)   (2,516)   (2,293)
Selling, general and administrative   (1,101)   (1,126)   (1,053)   (3,328)   (2,969)
Total operating expenses   (1,978)   (1,985)   (1,894)   (5,844)   (5,262)
Operating income   1,431    1,136    1,230    3,800    2,429 
                          
Net non-operating (expenses) income:                         
Total non-operating income   235    366    224    818    492 
Income before tax   1,666    1,502    1,454    4,618    2,921 
                          
Income tax expense   (293)   (284)   (249)   (880)   (535)
Income from continuing operations and before non-controlling interest    1,373    1,218    1,205    3,738    2,386 
Non-controlling interest   (338)   (289)   (289)   (940)   (601)
                          
Net income attributable to shareholders of the parent    1,035    929    916    2,798    1,785 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)

 

   As of Sep. 30, 2017  As of Jun. 30, 2017
       
Current assets:      
Cash and cash equivalents   38,975    43,891 
Financial assets – current   3,989    4,138 
Notes and accounts receivable   51,830    46,156 
Inventories   37,266    42,818 
Others   7,852    10,001 
Total current assets   139,912    147,004 
           
Financial assets – non current & Investments – equity method   51,107    50,878 
Property plant and equipment   136,982    140,378 
Intangible assets   11,830    11,885 
Prepaid lease payments   7,810    2,065 
Others   12,358    4,413 
Total assets   359,999    356,623 
           
Current liabilities:          
Short-term borrowings   19,638    14,209 
Current portion of bonds payable   6,137    15,236 
  Current portion of long-term borrowings & capital lease obligations   6,882    7,454 
Notes and accounts payable   41,077    32,471 
Others   28,665    43,765 
Total current liabilities   102,399    113,135 
           
Bonds payable   16,981    25,845 
Long-term borrowings & capital lease obligations   32,908    28,823 
Other liabilities   9,755    9,757 
Total liabilities   162,043    177,560 
Shareholders of the parent   185,160    166,838 
           
Non-controlling interest   12,796    12,225 
Total liabilities & shareholders’ equity   359,999    356,623 
           
           
Current Ratio   1.37    1.30 
Net Debt to Equity   0.20    0.24