Chang Wah Electromaterials, which distributes packaging materials and equipment for the semiconductor and LCD industries, expects sales to grow sequentially in the second quarter of 2011. But the rate of growth is difficult to estimate, said company chairman Chia-neng Huang, citing uncertainty due to the impact of the Japan earthquake.

Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) reportedly are among Chang Wah's major clients. Both have estimated single-digit growth sequentially in the second quarter.

Huang indicated that the overall chip sector has begun feeling supply chain disruptions triggered by Japan's devastating earthquake in March. Meanwhile, demand has slowed down since April due to seasonal factors, Huang said.

Huang expects the semiconductor industry to hit bottom between July and August, but recover robustly in the fourth quarter.

Huang also expressed concerns that failure of supplies from Japan will spur upward prices for some key manufacturing-use parts and materials such as epoxy molding compounds, colloidal silver and leadframe products.

Chang Wah reported NT$3.86 billion (US$135 million) in consolidated revenues for the first quarter, up 14.5% on quarter, with gross margin almost flat sequentially to 7.4%. Pre-tax profits and net profits came to NT$151 million and NT$124 million, respectively, with the latter showing NT$27 million less than the former mainly due to recognition of non-operational losses.

Based on Chang Wah's share capital of NT$611 million, the company's EPS for the first quarter of 2011 was NT$1.92.