ASE Technology Holding Inc (日月光投控) yesterday said revenue from its core chip assembly and testing manufacturing (ATM) business would grow up to 11 percent sequentially this quarter as customers step up inventory buildup to address potential tariff risks.
However, the company expects a 10 percent annual reduction in revenue for its electronic manufacturing service business this quarter on seasonal factors, ASE said.
Overall revenue this quarter is expected to increase at least 2 percent from NT$148.15 billion (US$4.63 billion) last quarter, it said.
Photo: CNA
“Heading into the second quarter, product flow appears to be strong ... and we are seeing some potential for accelerated seasonality and inventory build during the quarter,” ASE said.
Gross margin for the ATM business is expected to expand to between 24 percent and 24.1 percent, compared with 22.6 percent last quarter, the company said.
Regarding the company’s US expansion plans, ASE chief financial officer Joseph Tung (董宏思) said the company “was invited by customers to evaluate the possibility of supporting their business in the United States.”
“We are engaging in discussions and are evaluating the opportunities with interest. We have no further details so far in terms of the actual investment size or the timeline, but any decision that we will eventually make will be made based on economic viability,” he said.
Asked about the reportedly softening demand for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced chip-on-wafer-on-substrate packaging technology, Tung said the company did not see anything “out of the ordinary.”
TSMC is one of ASE’s customers.
“Right now, we are not seeing any major behavioral changes among our customers, and therefore, for this year, we’re not making any changes. I don’t think any structural changes are warranted at this point,” Tung said.
“We are still in a catch-up mode in terms of building our capacity to meet the demand and as our foundry partner has a long-term, five-year CAGR [compound annual growth rate] forecast of 45 percent,” Tung said.
ASE maintained its projected capital spending for this year at about US$2.5 billion.
The company would continue aggressively expanding its capital budget in the chip testing business, primarily for advanced technology and those for AI-related chips, Tung said.
This business is “a margin-accreted business for us,” he added.
Chip testing revenue is expected to contribute about 20 percent to the company’s total revenue by the end of this year, compared with about 16 percent last year, ASE said.
The company’s net profit last quarter grew 33 percent to NT$7.55 billion, from NT$5.66 billion a year earlier. That represented a quarter-on-quarter decline of 19 percent from NT$9.31 billion.
Earnings per share were NT$1.75 last quarter, up from NT$1.31 a year earlier, but down from NT$2.15 a quarter earlier.
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