IMOS

ChipMOS TECHNOLOGIES (Bermuda) LTD. (IMOS)

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ChipMOS TECHNOLOGIES (Bermuda) LTD. (IMOS)

Q3 2012 Results Earnings Call

November 20, 2012 8:00 AM ET

Executives

David Pasquale - Global IR Partners, IR

S.J. Cheng - Chairman and CEO

S.K. Chen - Chief Financial Officer

Analysts

Richard Shannon - Craig Hallum Capital

Brian Grad - DLS Capital Management

Aaron Martin - AIGH Investment Partners

Scott Bishins - Caffeine Holdings

Al Tobaya - Sirius Partners

Presentation

Operator

Greetings. And welcome to ChipMOS’ Third Quarter 2012 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions)

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Pasquale of Global IR Partners. Thank you, Mr. Pasquale. You may begin.

David Pasquale

Thank you, Operator. Welcome everyone to ChipMOS' third quarter 2012 results conference call. Joining us today from the company are Mr. S.J. Cheng, Chairman and Chief Executive Officer; and S.K. Chen, Chief Financial Officer.

S.J. will review highlights from the quarter and then provide ChipMOS' business outlook. S.K. will then review the company's key financial results. We will then have time for any questions.

If you have not yet received a copy of today's results release, please email Global IR Partners at imos@globalirpartners.com, or you can get a copy of the release off of ChipMOS’ website, www.chipmos.com.

Before we begin, we must make a disclaimer regarding forward-looking statements. During this call, management may make forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and the Section 21E of the U.S. Securities Exchange Act of 1934, as amended.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual performance, financial condition or results of operations of the company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements.

Further information regarding these risks, uncertainties and other factors is included in the company's most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission, and in the company's other filings with the SEC.

I would like to now turn the call over to Mr. S.J. Cheng. Please go ahead, sir.

S.J. Cheng

Yeah. Thank you, David. Welcome everyone to our third quarter 2012 conference call. Hopefully, you all had time to review our earnings release. We would like to welcome new shareholders joining on today’s call for the first time. I had a pleasure meeting with many of you recently to introduce the ChipMOS story. Thank you for the confidence and support you have expressed.

Result for the third quarter was as expected and in line with our prior year’s guidance. Our revenue grew 6.4% compared to Q2 2012 and the gross margin improved to 18.6%, compared to 12.8% Q2 this year.

Revenue growth in Q3 was mainly driven by our LCD driver IC business and bumping business, which increased 12.3% and 16.7% compared to Q2, respectively. The healthy growth was as expected given our market leading position and strength in the key LCD segments. We have invested in support our LCD business and established stronger customer relationship, which will continue to benefit our results moving forward.

We start on this strategy offsetting our business and customer mix several years back. We have defensible leadership position now with high barrier to enter for any new entrants. This differentiated ChipMOS from a business standpoint. This also led to increase value for our shareholders and the market better appreciate our success and leading position.

We are also pleased with revenue growth of 4.1% in our mixed-signal business and 2.1% revenue growth in DRAM business compared to Q2. While smaller contributed to our overall result, we are compared with our mixed-signal business and positive given recent signal of stability in the DRAM market. The mixed-signal market is attracted to us as it provides a growth opportunity and diversification for our business.

Our Q3 flash business decreased 3.2% as compared to Q2. This decline continues [make our win] in low price memory which are expected to continue into Q4. Our overall utilization rate existing the quarter improved to 80%, compared to 78% in Q2 2012.

This is one of the most important taking away from today’s call. Our ability to drive utilization rate higher with right product mix is critical to our growth margin improvement and success.

Let me now turn to our Q4 outlook. Based on exiting customer focus, we currently expect revenue for the fourth quarter of 2012 to be around flat to 5% lower as compared to the third quarter of 2012. This outlook reflects continues growth in our LCD driver IC business.

Such growth continues to be offset by the broader softness in the memory market I just mentioned, thus it’s impacting our commodity DRAM assembly business. Importantly, we expect to maintain a very healthy gross margin on consolidated basis in a range of about 14% to 19%.

Before I turn the call over to S.K., I want to spend a couple of minutes to discuss more recent business development.

Firstly, ChipMOS closed its previously announced underwritten secondary offering on November 1, 2012. 2,500,000 of company common shares was pricing at $10.10 per share. 1,700,000 common shares were offered by company shareholder ThaiLin Semiconductor Corporation, a subsidiary of ChipMOS, and 800,000 common shares were offered by the company shareholder Siliconware Precision Industries Corporation.

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