Chang Wah Electromaterials, which distributes packaging materials and equipment for the semiconductor and LCD industries, expects flat revenue growth sequentially in the fourth quarter of 2010. The company turned in revenues of NT$3.17 billion (US$102.79 million) in third quarter, up 2.9% on quarter but down 4.12% on year.

September revenues totaled NT$917 million, down 14.4% sequentially and 12.6% on year. The September monthly figures were also the lowest level so far for the year.

Chang Wah is expected to post an EPS of NT$3.50 in the third quarter, which will bring EPS for the first three quarters of 2010 to NT$12.7,0 according to an estimate by industry sources.

Demand for packaging materials and equipment, particularly COF (chip-o-film) packaging materials and lead frames, will continue to decline in October amid inventory adjustments by clients, said the company, which is expecting demand to pick up again in November.

Demand for lead frames is expected to drop 11-13% sequentially in the fourth quarter due to decreased orders from clients in the memory sector, chairman Canon Huang estimated.

The supply-and-demand situation for COF materials shifted drastically in the first and second halves of the year, with supply falling short of demand by 30% in the first half, but then turned to an oversupply of 40% in the third quarter, which pushed down the company's capacity utilization rate for COF to only 50%, Huang said.