ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembler and tester, yesterday issued an optimistic outlook in expectation that its core business revenue would grow more than 20 percent this year on stronger customer demand and limited capacity.
Earlier this year, ASE projected that revenue from its chip assembly and testing services would this year be double the estimated revenue growth of the semiconductor industry.
“We are seeing stronger assembly and testing manufacturing demand than our previous target,” ASE chief operating officer Tien Wu (吳田玉) told an online investors’ conference. “Our sentiment is better than our previous guidance. The momentum will last into next year.”
Photo: Grace Hung, Taipei Times
Customer demand indicates that there would be better than seasonal demand in the first quarter next year, Wu said.
That might create an unusual situation in which the first quarter could be better than the fourth, he added.
ASE expects that supply and demand balance would be reached in 2023, given long manufacturing equipment delivery time stretching to about one year, Wu said.
“Next year, we still need to be smart and efficient in managing the bottleneck,” he added.
In response to investors’ concern about double booking, Wu said inventory correction might occur, but it should be temporary and limited to certain regions.
It would have a limited impact on ASE’s overall business momentum, he added.
Many of its customers had signed long-term service agreements and intend to extend such contracts to 2023, the company said, adding that long-term supply agreements were announced in April as customers sought to secure capacity amid a supply crunch.
In this quarter, ASE expects assembly and testing manufacturing shipments to expand 12 percent from the second quarter, while average selling prices are to hold steady at last quarter’s level, it said.
Gross margin could improve about 1.2 percentage points this quarter from 25.6 percent last quarter, the company said, after already reaching its target of 25 percent for the year.
ASE also expects gross-margin improvement next year.
ASE yesterday posted 49 percent annual growth in net profit to NT$10.34 billion (US$370 million) during the second quarter, compared with NT$6.94 billion. That represented a quarterly increase of 22 percent from NT$8.48 billion.
Earnings per share rose to NT$2.4 last quarter from NT$1.63 a year earlier and NT$1.97 a quarter earlier.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to