Stats Chippac

Stats ChippacL Stats Chippac races 11% today. We note that this comes few days after key client, TSMC, the world's largest semiconductor manufacturer, reported record revenue and income, buoyed by increased adoption of leading-edge manufacturing technologies by its clients. Led by strong contributions from its contract chip manufacturing segment, TSMC has continually posted strong earnings, although the group guides for a slow down in the fourth quarter, on back of softening demand for high-end smartphones, as handset vendors clears their current inventories. TSMC however remains positive on the outlook of its chip business, and expect 1Q14 to see better prospects, as the company begins volume manufacturing of chips using its new 20-nanometer process, which offers 30% higher chip speeds over its 28-nanometer technology. Meanwhile the group expects continued rising long-term demand for tablets and smartphones, which could be extended further to devices like smartwatches, which will boost the demand for mobile chips. Companies with notable exposure in the semiconductor’s sphere include STATS ChipPAC and UMS and the latest news could raise some concerns amongst investors. STATS is among the market leaders in the semiconductor back-end test and assembly space and counts TSMC as a key client.