IMOS

[la-onda]

IMOS: DDR2/Flash Bit Growth Insulating IMOS, Expect Upside to 2Q Estimates--
Reiterate Outperform Price Target $9.00
Summary and Recommendation

Based on our checks/reported monthly sales/expecting June revenues up 1-3% MOM, we believe IMOS is on track to exceed our revenue/EPS estimate of $140M/$0.24. We believe the transition to DDR2 remains strong, comprising 35-40% of 2Q DRAM mix, and on track to be >50% by YE. We believe the ratio of IMOS' DDR2/DDRI output is going up quickly, as two primary customers, Promos/Powerchip, have switched over manuf. lines to DDR2 (we believe DDR2 now comprises 70% of output at both). We expect LCD driver IC demand to remain flattish into 3Q, although demand is expected to pick up by early August, driven by excess panel inventories consumed/seasonal build. Utilization rates/ ASPs are expected to remain flattish QOQ, and IMOS working to fill available capacity with NOR flash, which continues to gain momentum at multiple customers. Increased competition from some of the larger players (ASE/SPIL) for memory testing and packaging raises concern, although it will take ASE/SPIL some time to purchase equipment/qualify customers. Also, a large number of memory fabs are coming online in the coming months, and along with IMOS' low cost manufacturing structure, we believe IMOS' growth prospects and strong market position will remain intact as long as capex spending remains controlled across the major OSAT players. IMOS is undervalued compared to its peers and the recent decline in the stock price offers a good entry point to play a 2H build-out driven by the transition to DDR2, Flash existing/new customers, and driver IC rebound.

Key Points
• ChipMOS' 2Q results to exceed our revenue/EPS estimate of $140M/$0.24. Strong memory output driven by DDRII transition.
• NOR business. The company has one NOR Flash customer with a long-term contract into 2009 and is working on several others (for NAND and NOR). Flash should comprise $100M-$120M of revenues, or 18%-20% of total, by YE06.
• Stock undervalued. Mosel share sale still in progress (90 day holding period) /board investigation into CEO indictment still act as an overhang.

link:
http://www.fbrcorp.com/opendoc.asp?docurl=/06262006/htm/61739_29140.htm

[la-onda]

ChipMos chief executive will stay on
Friday , June 30, 2006 11:33 ET

By Staff Reporter

NEW YORK, Jun 30, 2006 (XFN-ASIA via COMTEX) -- ChipMos Technologies Ltd., a Taiwanese provider of testing and packaging services for chip makers, on Friday said its chairman and chief executive, Shih-Jye Cheng, will remain in those positions following an investigation into his use of corporate funds in 2004.

In 2004, Cheng was indicted by the Taipei District Prosecutors' office for the alleged misuse of corporate funds in the form of investments in repurchase notes from subsidiaries ChipMos Technologies and ThaiLin Semiconductor Corp.

A committee made up of three board members, plus two law firms and financial adviser Diwan, Ernst & Young found that evidence produced by the prosecutor "seems to be inadequate," the company has suffered no loss and all of the money was remitted back to the subsidiaries.

It also found the company has not suffered "identifiable harm" to its reputation and business and Cheng has not been impaired in his duties as chairman and CEO because of the indictment, according to the company. It therefore is allowing Cheng to continue as chairman and CEO. The committee did not specifically attempt to determine whether Cheng had been involved in any wrongdoing.

The committee will continue during the ongoing criminal investigation and will monitor developments, the company said.

During the committee's investigation, Diwan, Ernst & Young did identify internal control weaknesses that existed during the period being investigated, however. The company said the weaknesses have either already been addressed or are being corrected. ChipMos' audit committee will lead a task force to determine if the controls are effective.

ChipMos shares rose 1 cent to $5.89 in morning trading on the Nasdaq.

[leighjam8]

la onda

with the 90 days on the share placement by MV does this mean the overhang will go from May 27 to August late in yr opinion ?
that is, the pps will be held down around 6.00 per share until Sept 06  ...or can the 2Q results if good really brake the trance this stock appears to be in....

[la-onda]

hi leighjam8,
I don´t know how long the overhang will be in place,but all other facts are positive.
IMO Q2 results will be good.
why?

Packaging and testing houses PTI and Thailin optimistic about 2H
EDN, July 6; Rodney Chan, DigiTimes.com [Thursday 6 July 2006]

Packaging and testing houses Powertech Technology Inc (PTI) and Thailin Semiconductor expect strong demand from the memory sector to continue buoying their revenues in the second half of the year, according to the Chinese-language Economic Daily News (EDN).

PTI, which has major clients in Elpida Memory, Powerchip Semiconductor Corporation (PSC), Toshiba, and ProMOS Technologies, saw its June revenues increase 6.14% sequentially to NT$1.4 billion, driven by orders from PSC and ProMOS, the paper said, adding Elpida's expansion plan is expected to result in more orders for PTI in the future.

The chief revenue drivers for Thailin have been orders from PSC and ProMOS, and the packaging and testing house expects Hynix Semiconductor to increase its orders in the third quarter, EDN reported. Thailin's revenues for June reached NT$250 million, up from NT$244 million for May

[la-onda]

nice trading day

[la-onda]

yahoo quotation:
by: buy_low_sell_high_er    07/11/06 03:13 pm
Msg: 27332 of 27357

June Revenues will be about 51 million based on Chipmos and Thailin June combined revenues of 1,598,841. This figure is 5 percent higher than May and 3 percent higher than April. Quarterly revenues will be almost 150 million, well above analyst revised upward guidance. Company has stated that 2H of 2006 will be stronger than first. Company is definately on track to make over $1 a share in earnings this year. I don't know what else you could ask for. Anyone selling here is just giving away big gains in the future.

[la-onda]

ChipMos June revenue up 5 percent
Friday , July 14, 2006 10:34 ET

By Staff Reporter

NEW YORK, Jul 14, 2006 (XFN-ASIA via COMTEX) -- ChipMos Technologies Ltd., a Taiwanese provider of testing and packaging services for chip makers, said Friday that June revenue rose 5 percent, and confirmed meeting Nasdaq rules in its appointment of two new board members.

Revenue rose to 1.64 billion New Taiwan dollars last month, or $50.6 million, from 1.28 billion New Taiwan dollars, or $39.5 million, a year ago.

Separately, the company said it received a letter from the Nasdaq National Market confirming it met marketplace rules by having a majority of independent directors on its board and three independent board members on its audit committee with recent appointments.

In late June, ChipMos appointed Rong Hsu, one of the company's independent directors, to fill a vacancy on the audit committee. On Monday, the company named Takaki Yamada, president of OKI Semiconductor Manufacturing Co., to fill a vacancy on the board.

[la-onda]

Fundamentals Taking a Turn for the Worse as Handset Market Weakness Worsens

Summary and Recommendation

This morning, we are downgrading TSM, ASTSF, and LTXX from Outperform to Market Perform. Although we have been hoping for a rebound in the PC food-chain, an increased risk of a global slowdown in GDP, as well as a more widespread weakness in the handset market (as we reported last week following our meeting with LTX management), have prompted us to take a more cautious view. We reported on July 6th, a marginal improvement in TSMC's wafer starts (that will go into the fab late in 3Q06), and that utilization rates are not expected to decline by much. Nonetheless, we have become marginally more concerned about a lower than expected end market demand in 2H06, due to a widening weakness in the handset market, that could potentially impact earnings estimates. We are therefore reducing 4Q06/CY07 estimates, price targets (using trough valuation multiples), and downgrading TSM, ASTSF, and LTXX to Market Perform. We are not downgrading the following names in our coverage universe: AMAT/KLAC, both stocks already at book-based trough valuation; ASML, share gain, technology upgrade immersion lithography; RTEC/ATMI, secular trend towards copper interconnect (and the accretive nature of the AUGT acquisition in the case of RTEC, and improving GM in case of ATMI); FORM, DDR2/mobile RAM/NAND exposure; TSRA, DDR2 exposure; IMOS, DDR2 exposure, already at its book-based trough valuation.

Key Points

    * Downgrading TSM, ASTSF, LTXX to Market Perform. Although all three stocks are down significantly since early this year, we expect the flow of news to worsen, and with lack of a significant catalyst in the face of worsening overall demand environment, we now suggest investors stand on the sideline.
    * Broadening handset weakness. Although we had hoped for the weakness in the handset market to remain limited to MOT (see our industry note from June 8th), our recent checks indicate the weakness has spread to OEMs due to excess inventory accumulation. Some distributors are expecting flat to down QOQ handset growth in 3Q, with business remaining slow until late Sept.
    * Back end fundamentals weakening as we believe package assembly/test lead times have declined by 20% since 4Q05, putting more pressure on back end equipment vendors. Our recent checks suggest some subcontractors have actually begun to push out equipment shipment to avoid a significant drop off in utilization rates.
    * We expect a continued decline in %YOY monthly sales for Taiwan based companies, as well as lackluster bookings prospects beyond the July-quarter at LTXX.


http://www.fbrcorp.com/opendoc.asp?docurl=/07182006/htm/62540_29780.htm

[la-onda]

fyi:
Thailin secures DRAM testing orders directly from ProMOS
Commercial Times, July 24; Esther Lam, DigiTimes.com [Monday 24 July 2006]

Thailin Semiconductor has landed DRAM testing orders from ProMOS Technologies directly with production slated to start in limited volume from this month, according to a Chinese-language Commercial Times report. Thailin used to land orders from ProMOS through its parent company ChipMOS Technologies.

http://www.digitimes.com/NewsShow/NewsSearch.asp?DocID=PB000000000000000000000000001374&query=CHIPMOS

Thailin revenue update:
http://www.thailin.com.tw/ir.php?id=105

[la-onda]

switched from IMOS to KOMG 
IST says LCD driver IC demand warming up, Chipbond and ChipMOS have doubts
Ingrid Lee, Taipei; Esther Lam, DigiTimes.com [Wednesday 26 July 2006]

Although International Semiconductor Technology (IST) stated it is observing demand warming up for LCD driver ICs and the company projects that its shipments will grow 10-20% sequentially this quarter, rival Chipbond Technology and ChipMOS Technologies are posting a more conservative outlook.

IST is seeing orders pick up for specific LCD applications as well as some urgent orders for LCD monitors, said company president Gray Huang. He noted that present orders for LCD monitors are picking up more quickly than other applications but overall demand should warm up from August amid the previous inventory correction withing the LCD supply chain.

IST projects its shipments will grow 10-20% on quarter in the third quarter and the company will resume its capacity expansion with the major focus being placed on chip on glass (COG) and wafer sorting, Huang detailed.

Rival Chipbond and ChipMOS, on the other hand, are maintaining conservative outlooks. Chipbond estimates that demand will only pick up slightly in August and stay flat in September with overall third quarter demand only growing slightly on quarter, said company sources. ChipMOS echoed the sentiment, noting demand should bottom out in August and present demand from its two key customers has not shown signs of rebounding yet. Himax Technologies and Novatek Microelectronics are the two key customers of ChipMOS.

http://www.digitimes.com/NewsShow/Article_print.asp?datePublish=2006/07/26&pages=A8&seq=44

[la-onda]

nice July revenue:
ChipMOS REPORTS JULY 2006 REVENUE
Thursday August 17, 8:00 am ET

HSINCHU, Taiwan, Aug. 17 /Xinhua-PRNewswire-FirstCall/ -- ChipMOS TECHNOLOGIES (Bermuda) LTD. ("ChipMOS" or the "Company") (Nasdaq: IMOS - News) today reported its unaudited consolidated revenue for the month of July 2006.

Revenue for the month of July 2006 was NT$1,681.7 million or US$51.3 million, an increase of 3% from NT$1,636.5 million or US$50.0 million for the month of June 2006 and an increase of 38% from NT$1,215.1 million or US$37.1 million for the same period in 2005. (All translations from NT dollars to U.S. dollars were made at the exchange rate of NT$32.755 against US$1.00 as of July 31, 2006.)

ChipMOS' July 2006 consolidated revenue included revenues of ChipMOS TECHNOLOGIES INC., ChipMOS Japan Inc., ChipMOS U.S.A., Inc., ChipMOS TECHNOLOGIES (H.K.) Limited, MODERN MIND TECHNOLOGY LIMITED and its wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD., and ThaiLin Semiconductor Corp.

[la-onda]

nice day for IMOS,TA looks better now (see chart)

updated presentation:
http://www.shareholder.com/chipmos/downloads/presentation.pdf

IMO it is time for accumulation!

any other opinions?

cheers
Oliver

[la-onda]

cheap stocks under 10 $:
http://www.forbes.com/2006/08/18/cheap-stocks-grey-wolf-cx_jd_0821sf.html?partner=yahootix

ChipMos Technologies "sector perform," estimates raised

Monday, August 07, 2006 9:23:47 AM ET
RBC Capital Markets

NEW YORK, August 7 (newratings.com) - In a research note published on August 4, analysts at RBC Capital Markets maintain their "sector perform" rating on ChipMos Technologies (CHY.FSE), while raising their estimates for the company. The target price is set to $8.

[Melf Elf]

IMO it is time for accumulation!

any other opinions?

Oliver,

IMOS continues to be in a bear trend.

nice day for IMOS,TA looks better now (see chart)

That candle got completely reversed to the downside, so still acting bearish. 

Back in May when we bought IMOS, both the technicals and the fundamentals appeared to be outstanding.  However, the immediate reversal to the downside, after the nice earnings breakout, was extremely disappointing. 

I didn't want to sell in May, but as I've said many times, "When what appear to be good fundamentals don't get played out in the chart, I defer to the chart, and SELL."

Here's part of my decision-making process back in May:

nullzero,

If the two bullish breakouts in IMOS get taken down, I'd say that we could be in for a meaningful correction in the market.

I'll sit for the 7.18. and the 7.16...but, after those two beautiful breakouts, if last known support at 7.13 isn't support any longer, I'll sell.   

I'm going to use 7.12 as my stop.

I got stopped out at 7.12.   

Let's look at what's happened since then:

1. May 15 - Closed back below the Ascending Triangle and the 18-month breakout.  BEARISH

2. May 19 - June 6: Symmetrical Triangle.  Broke to the downside.  BEARISH

3. June 12 - July 7: Ascending Triangle.  There were about 8 tags of the ascending line, then the pattern finally broke to the downside.  BEARISH

4. July 13 - August 21 - Symmetrical Triangle.  No resolution yet.

If IMOS can take out the top of the current Symmetrical Triangle pattern (5.96-6.00), that would be a step in the right direction for the bulls, but given the bearish trend, I'd be concerned that the pattern might "morph" into a Bear Flag (a higher high, that fails).  To date, there have been three good opportunities to short IMOS since mid-May breakout failure.

Long positions are a play against the trend.  I'd suggest a stop below the bottom of the current Symmetrical Triangle, which comes in today at 5.442.

I'll post a weekly chart next. 

[Melf Elf]

The November, 2005 low was 5.35.  The July, 2006 low, after the break of the Ascending Triangle, was 5.36, so 5.35 support has held thus far.

The 18-month channel (blue lines) did not hold, however, and the current Symmetrical Triangle pattern has been forming just below it, which at this point gives the suggestion that the Symmetrical Triangle is a bearish continuation pattern which might fail at broken support (bottom blue line).

If IMOS can take out the top of the current Symmetrical Triangle pattern (5.96-6.00), that would be a step in the right direction for the bulls, but given the bearish trend, I'd be concerned that the pattern might "morph" into a Bear Flag (a higher high, that fails).

If, over the next couple/few weeks, IMOS breaks out of the Symmetrical Triangle and makes a "higher high," it still has to contend with getting back above the bottom of the channel (blue).  That's what I meant about the pattern "morphing" into a Bear Flag, if it should fail at the bottom of the channel.