ChipMOS REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

Rhea-AI Summary

ChipMOS Technologies Inc. reports a 22.2% increase in Q4 2023 revenue compared to Q4 2022, with a 2.6% increase from Q3 2023. Full year 2023 revenue declined by 9.2% compared to the prior year. The company also saw a significant increase in gross margin in Q4 2023 but a decline for the full year. Net earnings tripled in Q4 2023 but decreased compared to Q3 2023. ChipMOS maintains a strong financial position with a substantial balance of cash and cash equivalents.

Positive

• None.

Negative

• Full year 2023 revenue declined by 9.2% compared to the prior year.
• Full year 2023 gross margin declined by 430 basis points compared to 2022.
• Net earnings decreased in Q4 2023 compared to Q3 2023.
• Net profit for the fiscal year ended December 31, 2023, decreased compared to the previous year.

Insights

Financial Analyst

The reported 22.2% increase in Q4 revenue year-over-year indicates a strong quarterly performance for ChipMOS, potentially reflecting increased demand for their semiconductor services or successful market expansion strategies. However, the full-year revenue decline of 9.2% suggests that the company faced challenges throughout the year that may have impacted its overall performance. This could raise concerns among investors regarding the company's ability to maintain growth and could affect the stock's performance if the trend continues.

The improved gross margin in Q4, both sequentially and year-over-year, is a positive sign of operational efficiency and cost management. This improvement could contribute to higher profitability and may be seen as a positive indicator of management's effectiveness. The tripling of net earnings per share in Q4 compared to the same period last year also stands out as a significant achievement, suggesting that the company has effectively leveraged its revenues into profits, which can be attractive to investors.

However, the decrease in full-year net earnings compared to the previous year indicates that the company has faced profitability challenges over the longer term. This could be due to a variety of factors, such as increased competition, pricing pressure, or higher costs and would require further investigation to understand the underlying causes.

Market Research Analyst

The semiconductor industry is known for its cyclical nature and ChipMOS's performance must be contextualized within broader market trends. The increase in Q4 revenue could be indicative of a rebound in the semiconductor market or the result of new product introductions or client acquisitions. It's also important to consider the company's position within the Outsourced Semiconductor Assembly and Test (OSAT) sector and how shifts in technology demand, such as the rise of 5G and IoT, may be influencing its financial performance.

The foreign exchange losses highlighted in the report underscore the impact of currency volatility on multinational companies. ChipMOS's exposure to exchange rate fluctuations could be a point of concern for investors, particularly if the company does not have effective hedging strategies in place.

Lastly, the strong financial position with a substantial balance of cash and cash equivalents provides the company with strategic flexibility. This could enable further investments in technology, potential acquisitions, or shareholder returns, all of which could influence investor sentiment and the company's market value.

Economist

The company's financials reflect broader economic trends, such as exchange rate movements which have led to increased non-operating expenses in Q4. This financial detail points to the importance of macroeconomic factors on corporate profitability. Additionally, the decline in full-year revenue and net earnings may be symptomatic of economic headwinds, such as reduced consumer spending or supply chain disruptions, which could have implications for the sector's outlook.

The dividend authorization signals confidence by the board in the company's liquidity and financial health, which is reassuring for shareholders, especially in a context of declining annual revenue and net earnings. It is also indicative of the company's commitment to returning value to shareholders despite short-term earnings volatility.

Moreover, the company's liquidity position, with over US$400 million in cash and cash equivalents, suggests a robust balance sheet that may shield the company against market volatility and provide a buffer for strategic maneuvers, such as R&D investment or market expansion, which could drive long-term growth.

Financial Highlights:

• 22.2% Increase in Q4 2023 Revenue Compared to Q4 2022; 2.6% Increase Compared to Q3 2023; Full Year 2023 Revenue Declines 9.2% Compared to Prior Year
• 560 Basis Point Increase in Q4 2023 Gross Margin Compared to Q4 2022, and 420 Basis Point Increase Compared to Q3 2023; Full Year 2023 Gross margin Declines 430 Basis Points Compared to 2022
• Net Earnings Tripled to NT$0.66 Per Common Share in Q4 2023 From NT$0.22 in Q4 2022, and Decreased NT$0.14 Compared to NT$0.80 in Q3 2023; Full Year 2023 Net Earnings of NT$2.60 Per Common Share Compared to NT$4.64 for the Full Year 2022
• Strong Financial Position and Liquidity with NT$12,354.0 Million or US$403.5 Million Balance of Cash and Cash Equivalents
• Dividend of NT$1.8 Per Share Authorized by Board Pending Shareholder Approval at May 2024 AGM

HSINCHU, Feb. 22, 2024 /PRNewswire-FirstCall/ -- ChipMOS TECHNOLOGIES INC. ("ChipMOS" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"), today reported consolidated financial results for the fourth quarter and the full year ended December 31, 2023. All U.S. dollar figures cited in this press release are based on the exchange rate of NT$30.62 against US$1.00 as of December 29, 2023.

All the figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("Taiwan-IFRS").

Revenue for the fourth quarter of 2023 was NT$5,725.4 million or US$187.0 million, an increase of 2.6% from NT$5,581.5 million or US$182.3 million in the third quarter of 2023 and an increase of 22.2% from NT$4,686.2 million or US$153.0 million for the same period in 2022.  Revenue for the fiscal year ended December 31, 2023 was NT$21,356.2 million or US$697.5 million, a decrease of 9.2% from NT$23,517.1 million or US$768.0 million for the fiscal year ended December 31, 2022.

Net non-operating expenses in the fourth quarter of 2023 was NT$137.0 million or US$4.5 million, compared to net non-operating income of NT$230.9 million or US$7.5 million in the third quarter of 2023, and net non-operating expenses of NT$130.0 million or US$4.2 million in the fourth quarter of 2022. The variance is mainly due to an increased foreign exchange loss in the fourth quarter of 2023.

Net non-operating income of the Company for the fiscal year ended December 31, 2023 was NT$359.8 million or US$11.8 million, compared to NT$811.2 million or US$26.5 million for the fiscal year ended December 31, 2022. The decrease is mainly due to a reduced foreign exchange gain and share of profit of associates accounted for using equity method, which was partially offset by an increase in interest income.

Net profit attributable to equity holders of the Company for the fourth quarter of 2023 was NT$482.0 million or US$15.7 million, and NT$0.66 or US$0.02 per basic common share, as compared to NT$580.6 million or US$19.0 million, and NT$0.80 or US$0.03 per basic common share in the third quarter of 2023.  This compares to NT$154.9 million or US$5.1 million, and NT$0.22 or US$0.01 per basic common share in the fourth quarter of 2022.  Net earnings for the fourth quarter of 2023 were US$0.43 per basic ADS, compared to US$0.52 per basic ADS for the third quarter of 2023 and US$0.14 per basic ADS in the fourth quarter of 2022.

Net profit attributable to equity holders of the Company for the fiscal year ended December 31, 2023 was NT$1,893.4 million or US$61.8 million, and NT$2.60 or US$0.08 per basic common share, compared to net profit attributable to equity holders of the Company for the fiscal year ended December 31, 2022 was NT$3,372.0 million or US$110.1 million, and NT$4.64 or US$0.15 per basic common share. Net earnings for the fiscal year ended December 31, 2023 were US$1.70 per basic ADS, compared to US$3.03 per basic ADS for the fiscal year ended December 31, 2022.

Net free cash flow for the fiscal year ended December 31, 2023 was NT$1,339.0 million or US$43.7 million, with a balance of cash and cash equivalents was NT$12,354.0 million or US$403.5 million.

Fourth Quarter and Full Year 2023 Investor Conference Call / Webcast Details
Date: Thursday, February 22, 2024
Time: 3:00PM Taiwan (2:00AM New York)
Dial-In: +886-2-33961191
Password: 1415022 #
Webcast and Replay: https://www.chipmos.com/chinese/ir/info2.aspx
Replay: Starts approximately 2 hours after the live call ends
Language: Mandarin

Note: A transcript will be provided on the Company's website in English following the conference call to help ensure transparency, and to facilitate a better understanding of the Company's financial results and operating environment.

About ChipMOS TECHNOLOGIES INC.:
ChipMOS TECHNOLOGIES INC. ("ChipMOS" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS) (www.chipmos.com) is an industry leading provider of outsourced semiconductor assembly and test services. With advanced facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan, ChipMOS is known for its track record of excellence and history of innovation. The Company provides end-to-end assembly and test services to leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries serving virtually all end markets worldwide.

Forward-Looking Statements
This press release may contain certain forward-looking statements. These forward-looking statements may be identified by words such as 'believes,' 'expects,' 'anticipates,' 'projects,' 'intends,' 'should,' 'seeks,' 'estimates,' 'future' or similar expressions or by discussion of, among other things, strategies, goals, plans or intentions. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors. Further information regarding these risks, uncertainties and other factors are included in the Company's most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the "SEC") and in the Company's other filings with the SEC.

Contacts: In Taiwan Jesse Huang ChipMOS TECHNOLOGIES INC. +886-6-5052388 ext. 7715 IR@chipmos.com

In the U.S. David Pasquale Global IR Partners +1-914-337-8801 dpasquale@globalirpartners.com

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SOURCE ChipMOS TECHNOLOGIES INC.

FAQ

What was the percentage increase in Q4 2023 revenue compared to Q4 2022 for ChipMOS Technologies Inc.?

ChipMOS Technologies Inc. reported a 22.2% increase in Q4 2023 revenue compared to Q4 2022.

What was the net earnings per common share in Q4 2023 for ChipMOS Technologies Inc.?

Net earnings per common share in Q4 2023 for ChipMOS Technologies Inc. was NT$0.66.

What was the balance of cash and cash equivalents for ChipMOS Technologies Inc. at the end of the fiscal year 2023?

ChipMOS Technologies Inc. had a balance of NT$12,354.0 million or US$403.5 million in cash and cash equivalents at the end of the fiscal year 2023.

What was the net profit attributable to equity holders of the Company for the fiscal year ended December 31, 2023?

The net profit attributable to equity holders of the Company for the fiscal year ended December 31, 2023, was NT$1,893.4 million or US$61.8 million.