ChipMOS TECHNOLOGIES INC. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022; filed April 13, 2023. This is an annual report, not a standalone Q4 filing, and the supplied text does not provide a clear Q4-only financial breakdown. Financial statements are prepared under IFRS as issued by the IASB, with NT$ as the presentation currency. U.S. dollar figures are convenience translations.
Business context and financial performance
ChipMOS provides semiconductor testing, assembly and bumping services, with manufacturing facilities primarily in Taiwan. Its end markets include memory, logic/mixed-signal and display-driver semiconductors. Taiwan-headquartered customers generated 79% of FY2022 revenue.
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | NT$23.517bn (US$765.3m) | NT$27.400bn |
| Gross profit / margin | NT$4.912bn / 20.9% | NT$7.254bn / 26.5% |
| Operating profit / margin | NT$3.217bn / 13.7% | NT$5.562bn / 20.3% |
| Profit before tax | NT$4.028bn | NT$6.036bn |
| Profit for the year | NT$3.440bn; basic EPS NT$4.73 | NT$4.937bn; basic EPS NT$6.79 |
| Operating cash flow | NT$8.616bn | NT$7.320bn |
| Capital expenditures | NT$4.918bn | NT$6.553bn |
| Cash and cash equivalents at year-end | NT$9.897bn | NT$5.906bn |
| Long-term bank loans, including current portion | NT$13.968bn | NT$9.413bn |
FY2022 operating cash flow less capital expenditures was approximately NT$3.698bn. Investing activities used NT$5.062bn, while financing activities generated NT$417m. Current assets were NT$18.352bn and current liabilities NT$6.489bn at year-end. The company reported no short-term bank loans outstanding; NT$10.762bn of long-term borrowing was secured by assets. Total liabilities were NT$20.304bn and equity NT$24.639bn.
Revenue by service segment was NT$5.244bn testing, NT$6.706bn assembly, NT$7.289bn display-driver assembly and testing, and NT$4.279bn bumping. Segment gross margins were 31.2%, 7.0%, 29.3% and 15.7%, respectively. R&D expense was NT$1.159bn, approximately 4.9% of revenue. Cash dividends paid in 2022 totaled NT$3.127bn; the reported distribution was NT$4.30 per share.
Material changes versus FY2021
- Revenue fell 14% to NT$23.517bn as demand declined across all four service segments. Bumping revenue had the largest percentage decline, down 20%.
- Gross profit fell 32% and gross margin contracted 5.6 percentage points to 20.9%. Operating profit declined 42%; net profit declined 30%.
- Capacity utilization dropped across all reported lines: memory and logic/mixed-signal testing to 66% from 83%; assembly to 62% from 85%; display-driver assembly and testing to 67% from 80%; and bumping to 63% from 85%.
- Operating cash flow increased to NT$8.616bn, supported in part by lower receivables; cash at year-end rose by NT$3.990bn. Capital expenditures decreased from FY2021 but remained substantial.
- Long-term bank loans increased by approximately NT$4.554bn. The company paid NT$3.127bn in cash dividends, up from NT$1.600bn in FY2021.
Outlook, risks and unusual items
- Outlook: Management attributed second-half 2022 weakness to softer end demand, customer inventory adjustments, inflation and geopolitical pressures, and COVID-related disruption in China. It reported signs of a rebound in OLED, TDDI and large-panel driver IC demand after the Lunar New Year holiday in 2023. This is commentary, not quantified financial guidance; the filing gives no clear revenue or earnings forecast.
- Customer concentration: The top five customers represented 54% of FY2022 revenue; the largest customer accounted for 20%. Customer orders are generally purchase-order based, and many forecasts are non-binding.
- Debt and interest exposure: All outstanding debt was floating-rate, at 1.075%–1.625% at year-end. A 1 percentage-point rate increase was estimated to increase annual interest expense by NT$141m. Loan covenants include minimum current and interest-coverage ratios and a maximum debt-to-equity ratio; the company reported compliance for 2018–2022.
- Foreign exchange: FY2022 included NT$448m in net foreign-exchange gains, versus losses in the prior two years. Management attributed improved non-operating income partly to U.S. dollar appreciation. The company estimated that a 5% NT-dollar appreciation against relevant currencies would reduce exchange gains by NT$288m.
- Other earnings drivers: Share of profit from associates and joint ventures was NT$454m, down from NT$626m. Net non-operating income was NT$811m, including foreign-exchange gains; the listed-stock fair-value loss was NT$69m.
- Operating and external risks: High fixed costs and lower utilization pressure margins; additional risks include semiconductor cyclicality, pricing, memory and display demand, supply availability, customer concentration, Taiwan power or water disruptions, natural disasters, Taiwan–China tensions, trade restrictions, and foreign exchange movements.
- Accounting and contingencies: The auditor identified revenue recognition for assembly, display-driver and bumping services as a critical audit matter because progress estimates rely on expected input costs and management judgment. The company reported no material litigation, no significant disaster losses, no significant subsequent events and no off-balance-sheet arrangements. Capital expenditure commitments were NT$1.704bn; customs guarantees were NT$136m.
- Liquidity assessment: Management said cash, operating cash flow and available credit facilities should cover capital spending, commitments and other needs for the year following issuance of the financial statements, while cautioning that economic uncertainty makes forecasting difficult.
Most important facts for investors to verify
- Whether demand and utilization recovered after the second-half 2022 downturn, particularly in assembly, bumping and display-driver services.
- Whether margins stabilize as pricing, customer orders and fixed-cost absorption change; assembly gross margin was only 7.0% in FY2022.
- Customer concentration, order trends and the terms and enforceability of long-term capacity agreements.
- Debt repayments, floating-rate exposure, collateral and covenant headroom, alongside the availability and terms of undrawn facilities.
- How much FY2022 cash generation reflects sustainable operating performance versus working-capital movements, foreign-exchange gains and associate income.
- Progress and returns on capacity investment, including the effect of capital commitments and continued depreciation.
- Revenue-recognition estimates and controls highlighted by the auditor; the audit opinion on the financial statements and internal control was unmodified, and controls were assessed as effective.