ChipMOS Technologies is looking to expand its flash memory testing capacity as it negotiates orders with a leading flash memory maker.

Sources had suggested that ChipMOS had already landed the flash chip probing orders and was expanding its flash probing capacity to 14 million units per month, but ChipMOS responded by saying that the orders are still being negotiated.

If the company does expand its capacity, it will utilize the Hsinchu base that it will acquire as part of its announced merger with subsidiary Chantek Electronic, according to a company executive. ChipMOS currently sub-contracts gold bumping to Chantek's Hsinchu plant and this will continue after the merger is finalized, the company said.

For LCD driver IC testing and packaging, for which ChipMOS holds a strong market share, the company is reducing its capacity expansion plan upon a cautious outlook. Despite the cutback, monthly LCD driver IC capacity using tape carrier package (TCP) and chip on film (COF) technology will increase to 38 million chips per month in the fourth quarter, up from the current 35 million chips; chip on glass (COG) packaged LCD driver IC capacity will expand from the current 17 million chips to 23 million in the same period.

ChipMOS explained the reduced capacity ramp is not related to the rate at which orders are coming in, but the company is now taking a more conservative approach to capacity expansion. ChipMOS will expand its LCD driver IC capacity subject to more concrete forecasts from customers in the future.

Forecasting the sector outlook for this quarter, ChipMOS chairman and CEO SL Cheng indicated that strong foundry orders signaled a positive trend for testing and packaging vendors. Together with the traditional hot season impact, ChipMOS is confident about this quarter’s financial performance.