Thu, Jun 25, 2020 page12

• ASE upbeat on revenue growth

  LONG-TERM OUTLOOK: The chip packager is maintaining its capital spending budget for this year on expectations that 5G, AI and smart manufacturing would drive growth

  • By Lisa Wang / Staff reporter, in KAOHSIUNG
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  ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip tester and packager, yesterday stood firm on its forecast of annual revenue growth this year, as customers continue to show a strong appetite for its advanced technology.

  Growth momentum is expected to continue from the first half of this year, when ASE’s revenue, net profit and equipment utilization all beat its expectations, it said.

  In particular, the company received higher orders in the first quarter as its factories in Taiwan kept running following the nation’s quick response to the COVID-19 pandemic, it added.

  

  ASE Technology Holding Co chief executive officer Tien Wu, left, and chief financial officer Joseph Tung, right, attend the company’s annual shareholders’ meeting in Kaohsiung yesterday.

  Photo: Lisa Wang, Taipei Times

  “We are firm about our forecast of annual growth in revenue this year,” ASE chief executive officer Tien Wu (吳田玉) told reporters on the sidelines of the company’s annual shareholders’ meeting in Kaohsiung.

  Last year, ASE’s revenue rose 11.3 percent year-on-year to NT$413.2 billion (US$13.94 billion).

  ASE’s low-end capacities are fully utilized and demand for high-end capacities exceeds what it can supply before September, Wu said.

  The company used to provide a business guidance for upcoming quarters, but Wu yesterday declined to quantify the firm’s revenue growth guidance for this year, citing macroeconomic uncertainties, political tensions, the global COVID-19 situation and vaccine development.

  “We have seen some dark clouds and uncertainty in the near term,” he said.

  The company does not have a clear picture of its business outlook in the fourth quarter, Wu said.

  Some capacities might become more available and production might have to be readjusted after September, he said.

  However, ASE is positive about long-term prospects, as 5G technology, artificial intelligence (AI), smart manufacturing and electric vehicles are likely to drive semiconductor growth over the next few years, he said, adding that the company is prepared for the next boom in semiconductor demand.

  The company last year increased equipment capital spending by US$400 million to US$1.6 billion, from US$1.2 billion in 2018, while its global peers scaled back capital spending by a combined US$700 million, Wu said.

  ASE plans to spend the same amount on equipment this year, Wu said.

  “We want to make that sure we are the survivor, and we want to maximize our market share after the pandemic ends,” he said.

  To combat the pandemic, ASE said it aims to preserve as much cash as it can and has since March suspended the distribution of performance bonuses to about 200 top executives to cope with the fallout from the crisis, it added.

  The company applied a similar measure for eight months in 2009 in response to the global financial crisis, it said.

  Shareholders approved a plan to distribute a cash dividend of NT$2 per common share, which suggests a dividend yield of 2.94 percent based on ASE’s closing price yesterday of NT$68 in Taipei trading.
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