SEC Filing Summary: Advanced Semiconductor Engineering, Inc. (ASE)
Business Context and Reporting Period
This Form 6-K, filed on May 20, 2008, contains the Notice and Agenda for the 2008 Annual Shareholders' Meeting scheduled for June 19, 2008. The filing includes the 2007 Business Report and audited financial statements for the fiscal year ended December 31, 2007. ASE is a leading provider of semiconductor assembly and test services, with significant operations in Taiwan and expanding capacity in China.
Key Financial Metrics (Fiscal Year 2007)
| Metric | 2007 (NT$ Thousands) | 2006 (NT$ Thousands) |
|---|---|---|
| Net Revenues | 55,543,272 | 63,065,652 |
| Operating Income | 10,680,296 | 12,577,064 |
| Net Income | 12,165,249 | 17,416,151 |
| Basic EPS (After Tax) | NT$ 2.34 | NT$ 3.41 |
| Total Assets | 102,045,382 | 100,852,040 |
| Shareholders' Equity | 75,173,361 | 66,019,899 |
| Long-term Debt | 12,827,848 | 16,630,916 |
| Cash & Equivalents | 4,229,840 | 4,517,626 |
Note: Consolidated net revenues for 2007 were NT$101.2 billion, representing a slight increase of less than 1% over 2006.
Material Changes vs. Prior Period
- Revenue Decline: Net revenues decreased approximately 12% year-over-year (from NT$63.1 billion to NT$55.5 billion) due to a weakening global semiconductor market in the second half of 2007, driven by recession concerns and falling DRAM/Flash test prices.
- Profitability: Net income declined by approximately 30% (from NT$17.4 billion to NT$12.2 billion). Operating income dropped from NT$12.6 billion to NT$10.7 billion.
- Debt Reduction: Long-term debt decreased significantly by roughly NT$3.8 billion, improving the long-term capital to fixed assets ratio to 286%.
- Equity Growth: Shareholders' equity increased by NT$9.2 billion, primarily due to net income and capital surplus adjustments, despite the profit decline.
Guidance, Outlook, and Management Commentary
- 2008 Outlook: Management projects sales volume of approximately 4.1 billion chips for packaging and 800 million chips for testing. No specific financial forecast was disclosed for 2008.
- Strategic Focus: The company is expanding capacity in China to offer high-volume, lower-cost manufacturing. A joint venture (ASEN) with NXP Semiconductors was approved to combine ASE's assembly/test expertise with NXP's technology.
- Capital Allocation: The Board proposes a 2007 earnings distribution of NT$1.8 per share (NT$1.71 cash, NT$0.09 stock). Additionally, a capital increase from capital reserves is proposed (NT$0.29 per share in stock), totaling NT$2.00 per share in dividends.
- Funding Authorization: Shareholders are asked to authorize the Board to raise funds via cash capital increase, Global Depository Receipts (GDR), or convertible bonds to repay loans and fund expansion.
- Risks: Management cites macroeconomic uncertainty, soaring oil prices, and the US sub-prime mortgage crisis as key risks. Environmental regulations (RoHS) are also noted as a driver for capital investment in green products.
Investor Verification Checklist
- Dividend Ratification: Confirm the approval of the NT$1.71 cash dividend and the stock dividend/capital increase plan at the June 19, 2008 meeting.
- China Expansion: Verify the progress of the Suzhou ASEN joint venture and the impact of the new indirect investment approval (US$21.6 million).
- Debt Structure: Review the specific terms of the proposed new debt or equity issuance authorized for the Board to execute.
- Market Exposure: Assess the company's exposure to the low-level packaging market in China versus high-end markets in Taiwan as the product mix shifts.
- Guarantees: Note the total guarantees provided to subsidiaries (ASE Shanghai, ASE Test Finance) totaling approximately NT$7.3 billion as of Dec 31, 2007.