S&P revises UTAC view to negative

S&P said it revised the outlook on UTAC Holdings Ltd. to negative from stable to reflect the current protracted weakness in the company’s performance.

“The outlook revision also reflects the risk of the company failing to clinch new semiconductor assembly and test projects to improve topline or to realize margin improvement, which could result in the credit metrics remaining sub-par. Such a situation, leading to prolonged operating cash burn, could indicate a fundamental weakening of UTAC’s business,” said S&P in a press release.

S&P affirmed the rating on UTAC because the agency said it expects UTAC’s higher capital expenditure and research and development spending could translate into gradual improvements in its operating performance over the next two years.

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