UPDATED. 2024-07-19 07:49 (금)
Memory packaging firms see earnings decline from SK Hynix’s reduced orders
Memory packaging firms see earnings decline from SK Hynix’s reduced orders
  • Nari Lee
  • 승인 2021.06.02 17:49
  • 댓글 0
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Logic testing companies see high growth
Image: TheElec
Image: TheElec

South Korean memory packaging and testing companies saw their earnings drop in the first quarter of 2021 as SK Hynix continues to internalize more of its own packaging and testing.

In contrast, packaging and testing companies that services logic chips saw their earnings improve in the same time period.

SK Hynix has been increasing the volume of memory chips it package and test on its own, instead of using outside vendors, for the past couple of years, a person with direct knowledge of the matter said.

The memory giant increased this volume even more in the first quarter this year, they said. Fixed cost is very high in packaging and testing, they said, which has caused companies in the sector see earnings decline from SK Hynix’ move.

SK Hynix’s packaging and testing companies ATSemicon, Winpac and APACT saw their first quarter earnings drop.

ATSemicon widened its loss from a year prior. Winpac turned to the red. APACT recorded only 400 million won in operating income, a drop of 78.9% from the same time period a year ago.

South Korea’s memory packaging market grew from SK Hynix since the early 2000. Unlike Samsung, which does all of its own packaging and testing, SK Hynix decided to use outside testing firms. In 2007, 35 partners of SK Hynix all invested into the formation of APACT. 

For logic chips however, companies usually rely on outside packaging and testing firms. Most logic chips are made in small volumes and come in more varieties, unlike memory chips that are made in large volumes but come in only small varieties.

Logic chip testing firms Hana Micron, SFA Semicon, LB Semicon, Signetics amd Tesna all saw high growth in the first quarter. Hana Micron recorded a 225% increase in operating income of 20.2 billion won. LB Semicon and Tesna saw growth, like from testing for Samsung’s CMOS image sensors. Signetics also returned to the black.

The COVID-19 pandemic has increased demand for display driver ICs, image sensors and system-on-a-chips. Packaging and testing companies for these categories are also seeing earnings increase.

However, Nepes saw its operating income drop 98.5% year-on-year to 100 million won. This is likely from Samsung’s halt of its Austin chip plant. Nepes’ other customer NXP also halted its Austin plant.

Image: TheElec
Image: TheElec


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