ASE Technology Holding Co. reported stronger-than-expected first quarter results as advanced packaging services and test operations drove growth despite seasonal weakness. The company projects continued momentum in the second quarter while monitoring potential trade tariff impacts.
The Taiwanese chip packaging and testing provider posted net income of NT$7.55 billion ($235 million) for the first quarter, significantly exceeding analyst expectations. While revenue declined 9% sequentially to NT$148.15 billion, it represented a 12% increase year-over-year, fueled largely by AI-related products.
“Our first quarter revenues came in ahead of our original outlooks for both our ATM and EMS businesses,” said Kenneth Hsiang, Head of Investor Relations at ASE Technology. “We believe there are some customers looking to minimize supply chain volatility by building secure inventory ahead of potential trade tariffs.”
The company’s leading-edge advanced packaging services, critical for AI chips, continued robust growth and accounted for 10% of overall ATM revenues in Q1, up from 6% for the full year 2024. Test operations, where ASE is investing heavily with NT$472 million ($14.7 million) in quarterly capital expenditures, grew 2% despite seasonal headwinds.
ASE’s management signaled confidence in Q2, projecting ATM revenue growth of 9-11% quarter-over-quarter with improved gross margins. However, executives remained cautious about providing outlook beyond that, citing macroeconomic uncertainties.
The company confirmed it’s evaluating potential U.S. operations after receiving an invitation from a customer, likely responding to growing demand for localized semiconductor supply chains. “Any decision that we will eventually make will be made with economic viability,” CFO Joseph Tung said during the earnings call.
ASE shares have risen 8.3% year-to-date, outperforming Taiwan’s broader stock index, as investors bet on the company’s expanding role in advanced packaging for AI processors.
