Advanced Semiconductor Engineering Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said consolidated revenue this year would grow more than 20 percent annually, attributing strong customer demand from artificial intelligence(AI)-related applications and a broad recovery in non-AI sectors.
The Kaohsiung-based company made the comments after reporting the strongest quarterly net profits in 11 quarters. Net profits last quarter surged 45 percent sequentially to NT$10.87 billion (US$354 million) from NT$7.52 billion. That represented annual growth of 12 percent from NT$9.73 billion. Earnings per share rose to NT$2.5 last quarter from NT$1.74 a quarter earlier and NT$2.25 a year earlier.
The overall environment appears to be strengthening for the company and the upward seasonality during the third quarter has been the strongest since the COVID-19 pandemic, ASE said.
Photo: CNA
“For the full year, for the chip assembly and test manufacturing business, we’re seeing better than expected momentum of mainstream business given the continuing recovery of the general market. While on leading edge revenue, we are on track to reach the US$1.6 billion mark as planned,” chief financial officer Joseph Tung told investors during a virtual investor conference.
“We continue to see very strong momentum, and we are very, very confident that we will gain another over-a-billion-dollar kind of revenue increase for 2026 in this space,” Tung said.
ASE plans to further increase its machinery capital expenditures by several hundred million dollars in expanding advanced wafer probing and final test capacity to meet customers requests and to support continuing business momentum into next year, Tung said.
That could raise the company’s manufacturing equipment expenditures this year to top US$6 billion, an all-time high.
“I think AI or high performance computing is really the momentum and is here to stay,” Tung said. “We’re not going to be shy about making the necessary investment to not just secure our dominant position in this space, but also to expand that dominance against our competitors and to fully support our customers’ needs in terms of margin and return.”
The company expects the additional capital investment to generate meaningful revenue in the later part of next year when those capacities are utilized for next-generation AI chips, Tung said.
When asked about ASE’s US investment strategy as customer Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) commits to building multiple chip manufacturing facilities there, Tung said it has not decided to make further investment yet.
Any decision would only be made when the investment makes economic sense, he said.
“It is about the overall infrastructure which can support that kind of a business at a reasonable cost structure, and even with some premium pricing,” Tung said.
TSMC has selected Amkor Technology Inc as its chip packaging and testing service provider in the US.
Looking ahead, ASE expects consolidated revenue this quarter to rise 1 to 2 percent sequentially from NT$168.57 billion. The assembly and test manufacturing business would grow faster, 3 to 5 percent quarterly, the company said. Electronics manufacturing business would see a flat revenue on a quarterly basis, or a mild decline, ASE said.
Gross margin would climb by 0.7 percentage points to 1 percentage point this quarter, from 17.1 percent last quarter. Gross margin improvement would be even larger at between 1 percentage point and 1.5 percentage points, compared with 22.6 percent last quarter, ASE said.
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