ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing manufacturing (ATM) service provider, expects to double its leading-edge advanced technology services revenue next year to more than US$1 billion, benefiting from strong demand for artificial intelligence (AI) chips, a company executive said on Thursday.
That would be the second year that ASE has doubled its advanced chip packaging and testing technology revenue, following an estimate of more than US$500 million for this year.
ASE is one of the major beneficiaries from the AI boom as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is outsourcing production of advanced chip packaging technology, or chip-on-wafer-on-substrate (CoWoS), to local outsourced semiconductor assembly and test service providers such as ASE in efforts to solve prolonged capacity constraints.
Photo: CNA
“TSMC’s aggressive expansion of their back-end leading technology capacity is really a statement of a very, very strong demand coming in the next few years. Being a chosen customer of our customers as well as a foundry partner, we’ll definitely share that nudge potential in front of us,” ASE chief financial officer Joseph Tung (董宏思) told a virtual investors’ conference on Thursday.
The strong growth momentum would elevate the revenue contribution from ASE’s advanced packaging and testing technology segment to 12 percent or 13 percent of the company’s total ATM revenue next year, Tung said.
AI chip supplier Nvidia Corp has been the main adopter of TSMC’s CoWoS technology. That demand is to increase further next year with the introduction of Nvidia’s new Blackwell AI chips, market researcher TrendForce Corp (集邦科技) said last month, Tung said.
In addition to TSMC, ASE is engaging with multiple customers to provide its advanced chip packaging and testing services, Tung said.
ASE is making necessary investments in a variety of advanced technologies for wafer sort, final test, and burn-in tests, he said, adding that the company is also aggressively expanding its turnkey business for existing and future customers.
“We are engaging with all the direct customers, with system houses, fabless houses and foundry houses. The demand is coming from different directions. The real issue is how efficiently we will catch up our capacity with the demand,” Tung said.
As a result, the capital expenditures this year are to surpass its annual depreciation and amortization levels of US$1.9 billion. ASE said 2021 was the last year it spent more on machinery and equipment than its depreciation and amortization.
ASE considers these leading-edge technology businesses to be “margin accretive.” The growth of these businesses would help bring the company’s gross margin of its ATM business back to its structural margin range from 24 percent to 30 percent next year, Tung said.
During the current quarter, ASE expects gross margin of its ATM business to be little changed compared with 23.1 percent in the third quarter, the best since the final quarter last year.
ATM revenue is expected to have grown slightly from NT$85.79 billion (US$2.68 billion) last quarter, ASE said, adding that revenue from the electronics manufacturing service (EMS) business is predicted to decline about 5 percent sequentially from NT$74.87 billion last quarter.
ASE reported its strongest quarterly net profit in about seven quarters for last quarter, totaling NT$9.67 billion. That represented a 10 percent annual expansion or 24 percent quarterly growth from NT$8.78 billion and NT$7.78 billion. Earnings per share rose to NT$2.24 from NT$2.04 a year ago and NT$1.8 a quarter earlier.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
Prices of gasoline and diesel products at domestic fuel stations are this week to rise NT$0.2 and NT$0.3 per liter respectively, after international crude oil prices increased last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week snapped a two-week losing streak as the geopolitical situation between Russia and Ukraine turned increasingly tense, CPC said in a statement. News that some oil production facilities in Alberta, Canada, were shut down due to wildfires and that US-Iran nuclear talks made no progress also helped push oil prices to a significant weekly gain, Formosa said
RSS