ASE Technology Holding Co (日月光投控) yesterday said that capital expenditure this year might exceed the record US$2 billion spent last year, as demand for advanced packaging and testing services for chips used in high-performance computing, vehicles and 5G-related devices continues to be robust.
Long-term service agreements are in place through next year, ASE said, adding that discussions are being held with customers about further extensions, which could result in further capacity being added for loyal customers.
The world’s biggest chip assembler and tester said that the imbalance of semiconductor supply and demand is likely to extend beyond what it initially thought.
Photo: CNA
“Right now, we believe capacity and supply constraints will last beyond 2023,” ASE chief operating officer Tien Wu (吳田玉) told a virtual investors’ conference.
“We have seen broad-base growth in all sectors, with momentum carrying over into at least 2022,” Wu said, adding that production lines would be fully utilized.
He attributed slow equipment deliveries and uneven material supplies to the longer-than-expected supply crunch, although most companies in the semiconductor supply chain have announced capital expenditure to increase capacity.
Revenue from ASE’s core assembly and testing manufacturing (ATM) business this year is expected to increase two times faster than the global semiconductor industry’s annual rate of 5 to 10 percent, Wu said.
Gross margin of the ATM business would likely outpace record growth seen in 2014, he added.
Consolidated revenue this year would exceed last year’s NT$567 billion (US$20.38 billion), while last year was a 20 percent increase over 2020’s NT$477 billion, he said.
Gross margin would surpass last year’s 19.4 percent, Wu said.
Revenue would be fueled by robust end-market demand and a rising trend in outsourcing to integrated device manufacturers (IDMs), which design, make and sell chips, Wu said.
The chip crunch of the past two years has accelerated the pace of outsourcing to IDMs, he added.
It has also broken some rigid rules, he said, citing broad changes in supply-chain management within the auto industry.
To secure as many components as possible, automakers have become more willing to accept new suppliers, new materials and different qualification standards, Wu added.
The ATM business is likely to post US$1 billion this year from customers in the automotive segment, he said.
Revenue in ASE’s system-in-package service is expected to total US$500 million for this year, up from US$330 million last year, thanks to customers’ capacity expansions and growing product portfolios, he said.
ASE reported that net profit last year increased 132 percent to NT$63.91 billion, up from NT$27.59 billion in 2020, while earnings per share rose to NT$14.84 last year, up from NT$6.47 in 2020.
Disposal gains of US$1.46 billion from the sale of factories in China helped to boost last year’s earnings.
This quarter, ASE expects revenue in its ATM business to drop 4 percent from last quarter due to fewer working days — which is better than usual — while revenue from its electronics manufacturing services should total about NT$60 billion.
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS