6-K 1 dp82021_6k.htm FORM 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

October 27, 2017

Commission File Number 001-16125


Advanced Semiconductor Engineering, Inc.
( Exact name of Registrant as specified in its charter)

26 Chin Third Road Nantze Export Processing Zone Kaoshiung, Taiwan Republic of China
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Not applicable

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ADVANCED SEMICONDUCTOR ENGINEERING, INC.


Date: October 27, 2017	By:	/s/ Joseph Tung
	Name:	Joseph Tung
	Title:	Chief Financial Officer

Advanced Semiconductor Engineering, Inc.

FOR IMMEDIATE RELEASE

IR Contact:

Iris Wu, Manager

irissh_wu@aseglobal.com

Tel: +886.2.6636.5678

http://www.aseglobal.com

Grace Teng, Manager

grace_teng@aseglobal.com

Tel: +886.2.6636.5678

ADVANCED SEMICONDUCTOR ENGINEERING, INC. REPORTS UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2017

Taipei, Taiwan, R.O.C., October 27, 2017 – Advanced Semiconductor Engineering, Inc. (TAIEX: 2311, NYSE: ASX) (“We”, “ASE”, or the “Company”), among the world’s leading companies in semiconductor packaging and testing, today reported unaudited net revenues¹ of NT$73,878 million for the third quarter of 2017 (3Q17), up by 2% year-over-year and up by 12% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$6,336 million, up from a net income attributable to shareholders of the parent of NT$5,502 million in 3Q16 and down from a net income attributable to shareholders of the parent of NT$7,847 million in 2Q17. Basic earnings per share for the quarter were NT$0.76 (or US$0.125 per ADS), compared to basic earnings per share of NT$0.72 for 3Q16 and NT$0.97 for 2Q17. Diluted earnings per share for the quarter were NT$0.69 (or US$0.115 per ADS), compared to diluted earnings per share of NT$0.64 for 3Q16 and NT$0.89 for 2Q17.

RESULTS OF OPERATIONS

3Q17 Results Highlights – Consolidated

Net revenue contribution from packaging operations, testing operations, EMS operations, substrates sold to third parties and others, each represented approximately 45%, 9%, 45%, 1% and 0%, respectively, of total net revenues for the quarter.

Cost of revenue was NT$60,030 million for the quarter, up from NT$53,910 million in 2Q17.

Raw material cost totaled NT$36,018 million for the quarter, representing 49% of total net revenues.

Labor cost totaled NT$9,110 million for the quarter, representing 12% of total net revenues.

Depreciation, amortization and rental expenses totaled NT$6,938 million for the quarter.

Gross margin increased 0.4 percentage points to 18.7% in 3Q17 from 18.3% in 2Q17.

Operating margin was 9.6% in 3Q17 compared to 7.9% in 2Q17.

In terms of non-operating items:

Net interest expense was NT$350 million.

Net foreign exchange gain of NT$33 million was primarily attributable to the depreciation of the U.S. dollar against the NT dollar.

¹ All financial information presented in this press release is unaudited, consolidated and prepared in accordance with Taiwan-IFRS (International Financial Reporting Standards as endorsed for use in the R.O.C.). Such financial information is generated internally by us and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by our independent auditors, to which we subject our audited consolidated financial statements, and may vary materially from the audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results of operations for any future period.

October 27, 2017

Advanced Semiconductor Engineering, Inc.

Gain on valuation of financial assets and liabilities was NT$598 million.

Net gain on equity-method investments was NT$323 million, including NT$389 million of the share of gain from our investment in Siliconware Precision Industries Co., Ltd. (“SPIL”).

Other net non-operating income of NT$143 million were primarily related to miscellaneous income. Total non-operating income for the quarter was NT$747 million.

Income before tax was NT$7,815 million for 3Q17, compared to NT$11,390 million in 2Q17. We recorded income tax expenses of NT$1,083 million for the quarter, compared to NT$3,207 million in 2Q17.

In 3Q17, net income attributable to shareholders of the parent was NT$6,336 million, compared to net income attributable to shareholders of the parent of NT$5,502 million in 3Q16 and net income attributable to shareholders of the parent of NT$7,847 million in 2Q17.

Our total number of shares outstanding at the end of the quarter was 8,724,619,364, including treasury stock owned by our subsidiaries. Our 3Q17 basic earnings per share of NT$0.76 (or US$0.125 per ADS) were based on 8,350,512,180 weighted average number of shares outstanding in 3Q17. Our 3Q17 diluted earnings per share of NT$0.69 (or US$0.115 per ADS) were based on 8,624,804,592 weighted average number of shares outstanding in 3Q17.

3Q17 Results Highlights – IC ATM²

Cost of revenues was NT$31,368 million for the quarter, up by 4% sequentially.

Raw material cost totaled NT$9,715 million for the quarter, representing 23% of total net revenues.

Labor cost totaled NT$7,870 million for the quarter, representing 19% of total net revenues.

Depreciation, amortization and rental expenses totaled NT$6,463 million for the quarter.

Gross margin increased 2 percentage points to 25.1% in 3Q17 from 23.1% in 2Q17.

Operating margin was 13.7% in 3Q17 compared to 10.5% in 2Q17.

3Q17 Results Highlights – EMS

Cost of revenues for the quarter was NT$29,691 million, up by 18% sequentially.

Raw material cost totaled NT$26,400 million for the quarter, representing 80% of total net revenues.

Labor cost totaled NT$1,226 million for the quarter, representing 4% of total net revenues.

Depreciation, amortization and rental expenses totaled NT$436 million for the quarter.

Gross margin decreased to 10.3% in 3Q17 from 11.1% in 2Q17.

Operating margin increased to 4.3% in 3Q17 from 4.0% in 2Q17.

LIQUIdiTY AND CAPITAL RESOURCES

Capital expenditures in 3Q17 totaled US$130 million, of which US$84million were used in packaging operations, US$29 million in testing operations, US$13 million in EMS operations and US$4 million in interconnect materials operations.

As of September 30, 2017, total unused credit lines amounted to NT$165,583 million.

Current ratio was 1.37 and net debt to equity ratio was 0.20 as of September 30, 2017.

Total number of employees was 68,227 as of September 30, 2017, compared to 66,996 as of

² ATM stands for Semiconductor Assembly, Testing and Material.

October 27, 2017

Advanced Semiconductor Engineering, Inc.

June 30, 2017.

Business Review

Packaging Operations³

Gross margin for our packaging operations during the quarter was 22.3%, up by 1.7 percentage points from 2Q17.

Capital expenditures for our packaging operations amounted to US$84 million for the quarter, of which US$30 million were used in purchases of wafer bumping and flip chip packaging equipment, and US$54 million were used in purchase of common equipment, SiP equipment and wirebond packaging equipment.

Testing Operations

Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,659 million during the quarter, down from NT$1,673 million in 2Q17.

Gross margin for our testing operations amounted to 37.8% during the quarter, up by 3.6 percentage points from 2Q17.

Capital expenditures for our testing operations amounted to US$29 million during the quarter.

EMS Operations

Gross margin for our EMS operations amounted to 10.3% during the quarter, down by 0.8 percentage points from 2Q17.

Capital expenditures for our EMS operations amounted to US$13 million during the quarter.

Substrate Operations

PBGA substrate manufactured by ASE amounted to NT$2,178 million for the quarter, up by NT$34 million, or by 2% from 2Q17. Of the total output of NT$2,178 million, NT$948 million was from sales to external customers.

Gross margin for substrate operations was 13.1% for the quarter, down by 1.3 percentage points from 2Q17.

In 3Q17, our internal substrate manufacturing operations supplied 25% (by value) of our total substrate requirements.

Customers

IC ATM consolidated Basis

Our five largest customers together accounted for approximately 36% of our total net revenues for the quarter and in 2Q17. One customer accounted for more than 10% of our total net revenues in 3Q17.

Our top 10 customers contributed 50% of our total net revenues for the quarter, compared to 51% in 2Q17.

Our customers that are integrated device manufacturers, or IDMs, accounted for 44% of our total net revenues for the quarter, compared to 43% in 2Q17.

EMS Basis

Our five largest customers together accounted for approximately 80% of our total net revenues in 3Q17, compared to 79% in 2Q17. One customer accounted for more than 10%

³ IC packaging services include module assembly services.

October 27, 2017

Advanced Semiconductor Engineering, Inc.

of our total net revenues in 3Q17.

Our top 10 customers contributed 89% of our total net revenues during the quarter, which remained the same as 2Q17.

outlook

Based on our current business outlook and exchange rate assumptions, management projects overall performance for the fourth quarter of 2017 to be as follows:

IC ATM 4Q17 business and gross margin should both be similar with 3Q17 level;

EMS 4Q17 business should be similar with IC ATM 4Q17 level;

EMS 4Q17 gross margin should be above 1Q16 level.

About ASE, Inc.

ASE is among the world’s leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services. For more information, please visit our website at http://www.aseglobal.com.

Safe Harbor Notice

This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People’s Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2016 Annual Report on Form 20-F filed on April 21, 2017.

October 27, 2017

Supplemental Financial Information

IC ATM Consolidated Operations

Amounts in NT$ Millions	3Q/17	2Q/17	3Q/16
Net Revenues	41,854	39,048	43,006
Revenues by Application
Communication	49%	48%	53%
Computer	10%	11%	12%
Automotive, Consumer & Others	41%	41%	35%

Packaging Operations

Amounts in NT$ Millions	3Q/17	2Q/17	3Q/16
Net Revenues	33,897	31,718	34,832
Revenues by Packaging Type
Bumping, Flip Chip, WLP & SiP	32%	31%	33%
IC Wirebonding	57%	58%	57%
Discrete and Others	11%	11%	10%
Capacity
CapEx (US$ Millions)*	84	161	112
Number of Wirebonders	16,083	16,118	15,905

Testing Operations

Amounts in NT$ Millions	3Q/17	2Q/17	3Q/16
Net Revenues	6,889	6,350	7,232
Revenues by Testing Type
Final test	79%	83%	75%
Wafer sort	18%	14%	21%
Engineering test	3%	3%	4%
Capacity
CapEx (US$ Millions)*	29	47	57
Number of Testers	3,739	3,796	3,725

EMS Operations

Amounts in NT$ Millions	3Q/17	2Q/17	3Q/16
Net Revenues	33,100	28,248	31,190
Revenues by End Application
Communication	45%	48%	51%
Computer	14%	17%	16%
Consumer	26%	20%	20%
Industrial	8%	8%	7%
Automotive	6%	6%	5%
Others	1%	1%	1%
Capacity
CapEx (US$ Millions)*	13	4	10

* Capital expenditure excludes building construction costs.

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data

(In NT$ millions, except per share data)

(Unaudited)

	For the three months ended									For the nine months ended
	Sep. 30 2017			Jun. 30 2017			Sep. 30 2016			Sep. 30 2017			Sep. 30 2016
Net revenues:
Packaging		32,880			30,494			33,449			93,180			91,663
Testing		6,889			6,350			7,231			19,604			19,729
Direct Material		948			928			805			2,768			2,456
EMS		33,098			28,210			31,174			90,663			80,768
Others		63			44			125			240			3,140
Total net revenues		73,878			66,026			72,784			206,455			197,756

Cost of revenues⁴		(60,030	)		(53,910	)		(58,673	)		(168,516	)		(159,943	)
Gross profit		13,848			12,116			14,111			37,939			37,813

Operating expenses:
Research and development		(2,986	)		(2,952	)		(2,947	)		(8,701	)		(8,300	)
Selling, general and administrative⁴		(3,794	)		(3,945	)		(3,728	)		(11,726	)		(10,983	)
Total operating expenses		(6,780	)		(6,897	)		(6,675	)		(20,427	)		(19,283	)
Operating income		7,068			5,219			7,436			17,512			18,530

Net non-operating (expenses) income:
Interest expense – net		(350	)		(365	)		(478	)		(1,150	)		(1,536	)
Foreign exchange gain (loss)		33			(201	)		1,593			2,723			2,236
Gain (loss) on valuation of financial assets and liabilities		598			800			(1,998	)		(2,566	)		(1,500	)
Gain (loss) on equity-method investments⁴		323			253			454			405			1,098
Others		143			5,684			(137	)		6,126			(504	)
Total non-operating income (expenses)		747			6,171			(566	)		5,538			(206	)
Income before tax		7,815			11,390			6,870			23,050			18,324

Income tax expense		(1,083	)		(3,207	)		(976	)		(5,176	)		(3,817	)
Income from continuing operations and before non-controlling interest		6,732			8,183			5,894			17,874			14,507
Non-controlling interest		(396	)		(336	)		(392	)		(1,132	)		(821	)

Net income attributable to shareholders of the parent		6,336			7,847			5,502			16,742			13,686

Per share data:
Earnings (losses) per share
– Basic		NT$0.76			NT$0.97			NT$0.72			NT$2.08			NT$1.79
– Diluted		NT$0.69			NT$0.89			NT$0.64			NT$1.89			NT$1.50

Earnings (losses) per equivalent ADS
– Basic		US$0.125			US$0.160			US$0.113			US$0.340			US$0.276
– Diluted		US$0.115			US$0.148			US$0.101			US$0.310			US$0.231

Number of weighted average shares used in diluted EPS calculation (in thousands)		8,624,804			8,604,623			8,252,369			8,266,095			8,272,939

Exchange rate (NT$ per US$1)		30.22			30.18			31.78			30.54			32.42

⁴ As of September 30, 2017, we have completed the identification of the difference between the cost of the investment and our share of the net fair value of subsidiary and associates’ identifiable assets and liabilities. Accordingly, we retrospectively adjusted the provisional amounts recognized at the acquisition dates in May , July and November 2016, respectively.

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data – IC ATM

(In NT$ millions, except per share data)

(Unaudited)

	For the three months ended									For the nine months ended
	Sep. 30 2017			Jun. 30 2017			Sep. 30 2016			Sep. 30 2017			Sep. 30 2016
Net revenues:
Packaging		33,897			31,718			34,832			96,676			94,609
Testing		6,889			6,350			7,232			19,604			19,729
Direct Material		1,048			960			920			2,943			2,652
Others		20			20			22			64			63
Total net revenues		41,854			39,048			43,006			119,287			117,053

Cost of revenues⁴		(31,368	)		(30,021	)		(32,040	)		(90,941	)		(88,696	)
Gross profit		10,486			9,027			10,966			28,346			28,357

Operating expenses:
Research and development		(2,123	)		(2,113	)		(2,130	)		(6,236	)		(6,073	)
Selling, general and administrative⁴		(2,639	)		(2,812	)		(2,646	)		(8,301	)		(7,957	)
Total operating expenses		(4,762	)		(4,925	)		(4,776	)		(14,537	)		(14,030	)
Operating income		5,724			4,102			6,190			13,809			14,327

Net non-operating (expenses) income:
Interest expense - net		(416	)		(443	)		(525	)		(1,357	)		(1,705	)
Foreign exchange gain (loss)		129			(162	)		1,504			2,835			2,032
Gain (loss) on valuation of financial assets and liabilities		365			522			(1,987	)		(3,185	)		(1,420	)
Gain (loss) on equity-method investments⁴		1,249			5,410			1,284			7,260			3,577
Others		154			33			(152	)		512			(425	)
Total non-operating income (expenses)		1,481			5,360			124			6,065			2,059
Income before tax		7,205			9,462			6,314			19,874			16,386

Income tax expense		(784	)		(1,541	)		(719	)		(2,895	)		(2,514	)
Income from continuing operations and before non-controlling interest		6,421			7,921			5,595			16,979			13,872
Non-controlling interest		(85	)		(74	)		(93	)		(237	)		(186	)

Net income attributable to shareholders of the parent		6,336			7,847			5,502			16,742			13,686

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data – EMS

(In NT$ millions, except per share data)

(Unaudited)

	For the three months ended									For the nine months ended
	Sep. 30 2017			Jun. 30 2017			Sep. 30 2016			Sep. 30 2017			Sep. 30 2016
Net revenues:
Total net revenues		33,100			28,248			31,190			90,711			80,864

Cost of revenues		(29,691	)		(25,127	)		(28,066	)		(81,067	)		(73,173	)
Gross profit		3,409			3,121			3,124			9,644			7,691

Operating expenses:
Research and development		(877	)		(859	)		(841	)		(2,516	)		(2,293	)
Selling, general and administrative		(1,101	)		(1,126	)		(1,053	)		(3,328	)		(2,969	)
Total operating expenses		(1,978	)		(1,985	)		(1,894	)		(5,844	)		(5,262	)
Operating income		1,431			1,136			1,230			3,800			2,429

Net non-operating (expenses) income:
Total non-operating income		235			366			224			818			492
Income before tax		1,666			1,502			1,454			4,618			2,921

Income tax expense		(293	)		(284	)		(249	)		(880	)		(535	)
Income from continuing operations and before non-controlling interest		1,373			1,218			1,205			3,738			2,386
Non-controlling interest		(338	)		(289	)		(289	)		(940	)		(601	)

Net income attributable to shareholders of the parent		1,035			929			916			2,798			1,785

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)

	As of Sep. 30, 2017		As of Jun. 30, 2017

Current assets:
Cash and cash equivalents		38,975		43,891
Financial assets – current		3,989		4,138
Notes and accounts receivable		51,830		46,156
Inventories		37,266		42,818
Others		7,852		10,001
Total current assets		139,912		147,004

Financial assets – non current & Investments – equity method		51,107		50,878
Property plant and equipment		136,982		140,378
Intangible assets		11,830		11,885
Prepaid lease payments		7,810		2,065
Others		12,358		4,413
Total assets		359,999		356,623

Current liabilities:
Short-term borrowings		19,638		14,209
Current portion of bonds payable		6,137		15,236
Current portion of long-term borrowings & capital lease obligations		6,882		7,454
Notes and accounts payable		41,077		32,471
Others		28,665		43,765
Total current liabilities		102,399		113,135

Bonds payable		16,981		25,845
Long-term borrowings & capital lease obligations		32,908		28,823
Other liabilities		9,755		9,757
Total liabilities		162,043		177,560
Shareholders of the parent		185,160		166,838

Non-controlling interest		12,796		12,225
Total liabilities & shareholders’ equity		359,999		356,623


Current Ratio		1.37		1.30
Net Debt to Equity		0.20		0.24