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

 

July 28, 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: July 28, 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 SECOND QUARTER OF 2017

 

Taipei, Taiwan, R.O.C., July 28, 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$66,026 million for the second quarter of 2017 (2Q17), up by 5% year-over-year and down by 1% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$7,847 million, up from a net income attributable to shareholders of the parent of NT$4,302 million in 2Q16 and up from a net income attributable to shareholders of the parent of NT$2,559 million in 1Q17. Basic earnings per share for the quarter were NT$0.97 (or US$0.160 per ADS), compared to basic earnings per share of NT$0.56 for 2Q16 and NT$0.33 for 1Q17. Diluted earnings per share for the quarter were NT$0.89 (or US$0.148 per ADS), compared to diluted earnings per share of NT$0.47 for 2Q16 and NT$0.29 for 1Q17.

 

RESULTS OF OPERATIONS

 

2Q17 Results Highlights – Consolidated

 

lNet revenue contribution from packaging operations, testing operations, EMS operations, substrates sold to third parties and others, each represented approximately 46%, 10%, 43%, 1% and 0%, respectively, of total net revenues for the quarter.

 

lCost of revenue was NT$53,910 million for the quarter, down from NT$54,576 million in 1Q17.

 

-Raw material cost totaled NT$30,855 million for the quarter, representing 47% of total net revenues.

 

-Labor cost totaled NT$8,871 million for the quarter, representing 13% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$6,805 million for the quarter.

 

lGross margin increased 0.3 percentage points to 18.3% in 2Q17 from 18.0% in 1Q17.

 

lOperating margin were both 7.9% in 2Q17 and 1Q17.

 

lIn terms of non-operating items:

 

-Net interest expense was NT$365 million.

 

-Net foreign exchange loss of NT$201 million was primarily attributable to the appreciation 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 

 

 

-Gain on valuation of financial assets and liabilities was NT$800 million.

 

-Net gain on equity-method investments was NT$253 million, including NT$356 million of the share of gain from our investment in Siliconware Precision Industries Co., Ltd.(“SPIL”).

 

-Other net non-operating income of NT$5,684 million were primarily attributable to gain on disposal of subsidiary. Total non-operating income for the quarter was NT$6,171 million.

 

lIncome before tax was NT$11,390 million for 2Q17, compared to NT$3,845 million in 1Q17. We recorded income tax expenses of NT$3,207 million for the quarter, compared to NT$886 million in 1Q17.

 

lIn 2Q17, net income attributable to shareholders of the parent was NT$7,847 million, compared to net income attributable to shareholders of the parent of NT$4,302 million in 2Q16 and net income attributable to shareholders of the parent of NT$2,559 million in 1Q17.

 

lOur total number of shares outstanding at the end of the quarter was 8,380,478,101, including treasury stock owned by our subsidiaries. Our 2Q17 basic earnings per share of NT$0.97 (or US$0.160 per ADS) were based on 8,114,881,837 weighted average number of shares outstanding in 2Q17. Our 2Q17 diluted earnings per share of NT$0.89 (or US$0.148 per ADS) were based on 8,604,623,206 weighted average number of shares outstanding in 2Q17.

 

2Q17 Results Highlights – IC ATM2

 

lCost of revenues was NT$30,021 million for the quarter, up by 2% sequentially.

 

-Raw material cost totaled NT$9,148 million for the quarter, representing 23% of total net revenues.

 

-Labor cost totaled NT$7,764 million for the quarter, representing 20% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$6,382 million for the quarter.

 

lGross margin increased 0.1 percentage points to 23.1% in 2Q17 from 23.0% in 1Q17.

 

lOperating margin was 10.5% in 2Q17 compared to 10.4% in 1Q17.

 

2Q17 Results Highlights – EMS

 

lCost of revenues for the quarter was NT$25,127 million, down by 4% sequentially.

 

-Raw material cost totaled NT$21,739 million for the quarter, representing 77% of total net revenues.

 

-Labor cost totaled NT$1,097 million for the quarter, representing 4% of total net revenues.

 

-Depreciation, amortization and rental expenses totaled NT$437 million for the quarter.

 

lGross margin increased to 11.1% in 2Q17 from 10.6% in 1Q17.

 

lOperating margin decreased to 4.0% in 2Q17 from 4.2% in 1Q17.

 

LIQUIdiTY AND CAPITAL RESOURCES

 

lCapital expenditures in 2Q17 totaled US$213 million, of which US$161 million were used in packaging operations, US$47 million in testing operations, US$4 million in EMS operations and US$1 million in interconnect materials operations.

 

lAs of June 30, 2017, total unused credit lines amounted to NT$175,681 million.

 

 

2 ATM stands for Semiconductor Assembly, Testing and Material.

 

2 

 

 

lCurrent ratio was 1.30 and net debt to equity ratio was 0.24 as of June 30, 2017.

 

lTotal number of employees was 66,996 as of June 30, 2017, compared to 66,164 as of March 31, 2017.

 

Business Review

 

Packaging Operations3

 

lGross margin for our packaging operations during the quarter was 20.6%, down by 0.1 percentage points from 1Q17.

 

lCapital expenditures for our packaging operations amounted to US$161 million for the quarter, of which US$78 million were used in purchases of wafer bumping and flip chip packaging equipment, and US$83 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$1,673 million during the quarter, down from NT$1,759 million in 1Q17.

 

lGross margin for our testing operations amounted to 34.2% during the quarter, up by 0.8 percentage points from 1Q17.

 

lCapital expenditures for our testing operations amounted to US$47 million during the quarter.

 

EMS Operations

 

lGross margin for our EMS operations amounted to 11.1% during the quarter, up by 0.5 percentage points from 1Q17.

 

lCapital expenditures for our EMS operations amounted to US$4 million during the quarter.

 

Substrate Operations

 

lPBGA substrate manufactured by ASE amounted to NT$2,144 million for the quarter, up by NT$54 million, or by 3% from 1Q17. Of the total output of NT$2,144 million, NT$928 million was from sales to external customers.

 

lGross margin for substrate operations was 14.4% for the quarter, up by 2.4 percentage points from 1Q17.

 

lIn 2Q17, our internal substrate manufacturing operations supplied 27% (by value) of our total substrate requirements.

 

Customers

 

IC ATM consolidated Basis

 

lOur five largest customers together accounted for approximately 32% of our total net revenues in 2Q17, compared to 31% in 1Q17. No customer accounted for more than 10% of our total net revenues in 2Q17.

 

lOur top 10 customers contributed 47% of our total net revenues for the quarter and in 1Q17.

 

lOur customers that are integrated device manufacturers, or IDMs, accounted for 36% of our total net revenues for the quarter and in 1Q17.

 

EMS Basis

 

lOur five largest customers together accounted for approximately 79% of our total net revenues in 2Q17, compared to 81% in 1Q17. One customer accounted for more than 10% of our total net revenues in 2Q17.

 

 

3 IC packaging services include module assembly services.

 

3 

 

 

lOur top 10 customers contributed 89% of our total net revenues during the quarter, compared to 90% in 1Q17.

 

outlook

 

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

 

lIC ATM 3Q17 business should be a notch or two lower than 3Q16 levels;

 

lIC ATM 3Q17 margin should be similar to 2Q16 levels;

 

lEMS 3Q17 business should be similar to the average of 3Q16 and 4Q16 levels;

 

lEMS 3Q17 gross margin should be similar to the average of 1Q16 and 2Q16 levels.

 

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 

 

Supplemental Financial Information

 

IC ATM Consolidated Operations

Amounts in NT$ Millions 2Q/17 1Q/17 2Q/16
Net Revenues 39,048 38,385 38,504
Revenues by Application      
Communication 48% 50% 52%
Computer 11% 11% 12%
Automotive, Consumer & Others 41% 39% 36%

 

Packaging Operations

Amounts in NT$ Millions 2Q/17 1Q/17 2Q/16
Net Revenues 31,718 31,061 31,180
Revenues by Packaging Type      
Bumping, Flip Chip, WLP & SiP 31% 31% 31%
IC Wirebonding 58% 58% 61%
Discrete and Others 11% 11% 8%
Capacity      
CapEx (US$ Millions)* 161 120 136
Number of Wirebonders 16,118 15,963 15,920

 

Testing Operations

Amounts in NT$ Millions 2Q/17 1Q/17 2Q/16
Net Revenues 6,350 6,365 6,502
Revenues by Testing Type      
Final test 83% 81% 77%
Wafer sort 14% 15% 20%
Engineering test 3% 4% 3%
Capacity      
CapEx (US$ Millions)* 47 31 107
Number of Testers 3,796 3,782 3,629

 

EMS Operations 

Amounts in NT$ Millions 2Q/17 1Q/17 2Q/16
Net Revenues 28,248 29,363 24,886
Revenues by End Application      
Communication 48% 49% 46%
Computer 17% 15% 20%
Consumer 20% 22% 18%
Industrial 8% 7% 8%
Automotive 6% 6% 7%
Others 1% 1% 1%
Capacity      
CapEx (US$ Millions)* 4 3 4

* 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 six months ended
 

Jun. 30 

2017 

 

Mar. 31 

2017 

 

Jun. 30

2016 

 

Jun. 30 

2017

 

Jun. 30 

2016 

 
Net revenues:                    
Packaging 30,494   29,806   30,178   60,300   58,214  
Testing 6,350   6,365   6,503   12,715   12,498  
Direct Material 928   892   759   1,820   1,651  
EMS 28,210   29,355   24,845   57,565   49,594  
Others 44   133   316   177   3,015  
Total net revenues 66,026   66,551   62,601   132,577   124,972  
                     
Cost of revenues4 (53,910)   (54,576)   (50,347)   (108,486)   (101,270)  
Gross profit 12,116   11,975   12,254   24,091   23,702  
                     
Operating expenses:                    
Research and development (2,952)   (2,763)   (2,745)   (5,715)   (5,353)  
Selling, general and administrative4 (3,945)   (3,987)   (3,620)   (7,932)   (7,255)  
Total operating expenses (6,897)   (6,750)   (6,365)   (13,647)   (12,608)  
Operating income 5,219   5,225   5,889   10,444   11,094  
                     
Net non-operating (expenses) income:                    
Interest expense - net (365)   (435)   (532)   (800)   (1,059)  
Foreign exchange gain (loss) (201)   2,891   (238)   2,690   643  
Gain (loss) on valuation of financial assets and liabilities

800

 

(3,964)

 

858

 

(3,164)

 

498

 
Gain (loss) on equity-method investments4,5 253   (171)   541   82   645  
Others 5,684   299   (438)   5,983   (367)  
Total non-operating income (expenses) 6,171   (1,380)   191   4,791   360  
Income before tax 11,390   3,845   6,080   15,235   11,454  
                     
Income tax expense (3,207)   (886)   (1,523)   (4,093)   (2,841)  

Income from continuing operations and 

before non-controlling interest 

8,183   2,959   4,557   11,142   8,613  
Non-controlling interest (336)   (400)   (255)   (736)   (429)  
                     

Net income attributable to shareholders of the parent 

7,847

 

2,559

 

4,302

 

10,406

 

8,184

 
                     
Per share data:                    
Earnings (losses) per share                    
– Basic NT$0.97   NT$0.33   NT$0.56   NT$1.32   NT$1.07  
– Diluted NT$0.89   NT$0.29   NT$0.47     NT$1.22   NT$0.87  
                     
Earnings (losses) per equivalent ADS                    
– Basic US$0.160   US$0.053   US$0.087     US$0.214   US$0.163  
– Diluted US$0.148   US$0.047   US$0.072     US$0.199   US$0.132  
                     

Number of weighted average shares used in 

diluted EPS calculation (in thousands)

8,604,623   7,931,315   8,238,396   8,121,989   8,272,966  
                     
Exchange rate (NT$ per US$1) 30.18   31.20   32.40   30.69   32.74  

 

 

4 As of June 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.

 

5 As of September 30, 2016, we have completed the identification of the difference between the cost of the investment and our share of the net fair value of SPIL’s identifiable assets and liabilities. Accordingly, we retrospectively adjusted the provisional amounts recognized at the acquisition dates in September 2015, March and April 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 six months ended
 

Jun. 30

2017

 

Mar. 31

2017

 

Jun. 30 

2016

 

Jun. 30

2017

 

Jun. 30 

2016 

 
Net revenues:                    
Packaging 31,718   31,061   31,180   62,779   59,777  
Testing 6,350   6,365   6,502   12,715   12,497  
Direct Material 960   935   801   1,895   1,732  
Others 20   24   21   44   41  
Total net revenues 39,048   38,385   38,504   77,433   74,047  
                     
Cost of revenues (30,021)   (29,552)   (28,945)   (59,573)   (56,656)  
Gross profit 9,027   8,833   9,559   17,860   17,391  
                     
Operating expenses:                    
Research and development (2,113)   (2,000)   (2,021)   (4,113)   (3,943)  
Selling, general and administrative (2,812)   (2,850)   (2,623)   (5,662)   (5,311)  
Total operating expenses (4,925)   (4,850)   (4,644)   (9,775)   (9,254)  
Operating income 4,102   3,983   4,915   8,085   8,137  
                     
Net non-operating (expenses) income:                    
Interest expense - net (443)   (498)   (576)   (941)   (1,180)  
Foreign exchange gain (loss) (162)   2,868   (306)   2,706   528  
Gain (loss) on valuation of financial assets and liabilities

522

 

 

(4,072)

 

 

828

 

 

(3,550)

 

 

567

 

 
Gain (loss) on equity-method investments4,5 5,410   601   1,144   6,011   2,293  
Others 33   325   (397)   358   (273)  
Total non-operating income (expenses) 5,360   (776)   693   4,584   1,935  
Income before tax 9,462   3,207   5,608   12,669   10,072  
                     
Income tax expense (1,541)   (570)   (1,266)   (2,111)   (1,795)  

Income from continuing operations and 

before non-controlling interest

7,921   2,637   4,342   10,558   8,277  
Non-controlling interest (74)   (78)   (40)   (152)   (93)  
                     

Net income attributable to 

shareholders of the parent

7,847

 

 

2,559

 

 

4,302

 

 

10,406

 

 

8,184

 

 
                     

 

 

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 six months ended
 

Jun. 30 

2017

 

Mar. 31 

2017

 

Jun. 30 

2016

 

Jun. 30

2017 

 

Jun. 30 

2016

 
Net revenues:                    
Total net revenues 28,248   29,363   24,886   57,611   49,674  
                     
Cost of revenues (25,127)   (26,249)   (22,326)   (51,376)   (45,107)  
Gross profit 3,121   3,114   2,560   6,235   4,567  
                     
Operating expenses:                    
Research and development (859)   (780)   (742)   (1,639)   (1,452)  
Selling, general and administrative (1,126)   (1,101)   (996)   (2,227)   (1,916)  
Total operating expenses (1,985)   (1,881)   (1,738)   (3,866)   (3,368)  
Operating income 1,136   1,233   822   2,369   1,199  
                     
Net non-operating (expenses) income:                    
Total non-operating income 366   217   190   583   268  
Income before tax 1,502   1,450   1,012   2,952   1,467  
                     
Income tax expense (284)   (303)   (205)   (587)   (286)  

Income from continuing operations and 

before non-controlling interest 

1,218   1,147   807   2,365   1,181  
Non-controlling interest (289)   (313)   (204)   (602)   (312)  
                     

Net income attributable to 

shareholders of the parent 

929

 

834

 

603

 

1,763

 

869

 

 

 

Advanced Semiconductor Engineering, Inc. 

Summary of Consolidated Balance Sheet Data 

(In NT$ millions)

(Unaudited)

 

  As of Jun. 30, 2017   As of Mar. 31, 2017
                 
Current assets:                
Cash and cash equivalents     43,891       42,474  
Financial assets – current     4,138       3,720  
Notes and accounts receivable     46,156       43,728  
Inventories     42,818       42,616  
Others     10,001       3,835  
Total current assets    

147,004

 

     

136,373

 

 
                 
Financial assets – non current & Investments – equity method    

50,878

     

52,183

 
Property plant and equipment     140,378       140,072  
Intangible assets     11,885       11,907  
Prepaid lease payments     2,065       2,081  
Others     4,413       4,901  
Total assets     356,623       347,517  
                 
Current liabilities:                
Short-term borrowings     14,209       13,400  
Current portion of bonds payable     15,236       15,179  
Current portion of long-term borrowings & capital lease obligations    

7,454

     

7,218

 
Notes and accounts payable     32,471       30,621  
Others     43,765       32,173  
Total current liabilities    

113,135

 

     

98,591

 

 
                 
Bonds payable     25,845       28,476  
Long-term borrowings & capital lease obligations     28,823       33,639  
Other liabilities     9,757       10,053  
Total liabilities    

177,560

 

     

170,759

 

 
Shareholders of the parent     166,838       164,840  
                 
Non-controlling interest    

12,225

 

     

11,918

 

 
Total liabilities & shareholders’ equity     356,623       347,517  
                 
                 
Current Ratio    

1.30

 

     

1.38

 

 
Net Debt to Equity    

0.24

 

     

0.29