ASE Technology Holding Co (日月光投控) yesterday posted 55 percent year-on-year growth in net profit last quarter and retained a revenue growth target this year double that of the global semiconductor industry, given a stable pricing environment and higher factory utilization.
During the quarter ending June 30, ASE posted a net profit of NT$15.99 billion (US$534.28 million), compared with NT$10.34 billion in the second quarter last year.
On a quarterly basis, net profit jumped 24 percent from NT$12.91 billion.
Photo: Grace Hung, Taipei Times
Earnings per share rose to NT$3.69, from NT$2.4 a year earlier and 3.01 percent in the prior quarter.
The company in April said that revenue growth this year would surpass 20 percent on an annual basis.
The world’s largest chip packager and tester’s optimism is built on strong customer engagement, protection of long-term supply agreements, its technology leadership and large manufacturing scale, it said.
About half of ASE’s capacity is covered by long-term agreements. Despite some sectors experiencing inventory corrections, no customers are trying to renegotiate such agreements, ASE chief operating officer Tien Wu (吳田玉) told investors during a teleconference yesterday.
“The overall market is undergoing an inventory correction with some sectors more aggressive than the others. However, some sectors remain constrained,” Wu said.
The data centers, networking, high-performing-computing and automotive devices are still under capacity constraint, Wu said.
“With our diversified customer portfolio and manufacturing flexibility, we are seeing a solid second half of 2022 with quarter-on-quarter growth of our holding company revenues,” he said.
ASE prices remain stable across all service categories in the second half, and the stability is expected to extend into next year, Wu said.
Equipment loading for chip packaging services this quarter is expected to stay at a similar level as last quarter’s range of between 80 percent and 85 percent, with advanced packaging equipment higher than others, the company said. While testing equipment factory usage should be about 80 percent this quarter, it said.
ASE this year expects further margin expansion for its core chip packing and testing services, as well as for its electronic manufacturing services business, notably its system-in-package service, compared with last year, Wu said.
The Kaohsiung-based company raised its gross margin target to between 25 percent and 30 percent in the next few years, compared with a range from 20 percent to 25 percent over the past decade.
The company expects revenue for its chip packaging and testing services to rise slightly this quarter, from NT$160.44 billion last quarter.
Gross margin for the services should also rise from 28 percent in the fourth quarter last year, Wu said.
Next year is likely to be full of challenges and headwinds, with changes being experienced in potential end market demand, Wu said, adding that the company expects seasonality to return in the first quarter, during which ASE usually sees a slowdown in revenue strength.
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