ASE Technology Holding announced its second-quarter financial results on July 25, showcasing a notable performance driven by increased capacity utilization in both packaging and testing, and electronic manufacturing services (EMS). The company achieved a gross profit margin of 16.4%, the highest in the past six quarters, and reported a net profit after tax of NT$7.783 billion, reflecting a 37% quarterly increase and a 1% annual increase, with earnings per share at NT$1.8. For the first half of the year, the net profit per share stood at NT$3.12.
Chief Financial Officer Joseph Tung highlighted that the packaging and testing capacity utilization rate reached approximately 60% in Q2 and is expected to rise to 65% in Q3, continuing to increase into Q4. ASE remains optimistic about the growing demand for AI and high-performance computing (HPC), which is anticipated to outpace other applications, positively impacting the packaging and testing business. The company aims to drive the gross profit margin for this segment back to the 24% to 30% range.
The Q2 financial report revealed a quarterly gross profit margin increase of 0.7 percentage points and an annual rise of 0.4 percentage points. The operating profit rate was 6.4%, up 0.7 percentage points quarterly but down 0.5 percentage points annually. The net profit margin after tax was NT$7.783 billion. The first half of the year saw a cumulative gross profit margin of 16.1%, an annual increase of 0.7 percentage points, and an operating profit margin of 6.1%, a slight year-on-year decrease.
In Q2, packaging and testing revenues accounted for 54.7% of the total, with EMS contributing approximately 44.8%, and other segments around 0.5%. Communications applications generated 49% of revenue, computers 19%, and automotive, consumer electronics, and other segments 32%. The top ten customers contributed about 60% of the revenue.
Regarding fan-out panel-level packaging (FOPLP), Chief Operating Officer Wu Tien Yu noted that ASE has been investing in panel-level packaging solutions for over five years, collaborating with multiple customers on the 300×300 mm size.
ASE’s strategic focus on advanced packaging and testing positions it well to meet the rising demand from AI and HPC sectors, underpinning its growth trajectory for the coming quarters.
Wu Tien Yu announced that the company is set to exceed its original target of increasing advanced packaging revenue by $250 million (NT$8.2 billion) this year. To meet the surging demand, ASE has raised its capital expenditure for the second time this year.
While specific figures for this year’s capital expenditure remain undisclosed, Wu highlighted that the investments are primarily allocated towards advanced packaging and testing, with 53% dedicated to packaging and 38% to testing. Some sources estimate ASE’s capital expenditure for the year to reach $3 billion (NT$98.4 billion), doubling from the previous year’s $1.5 billion.
Despite the impact of Typhoon Kemi, ASE held an online Dharma talk where Wu shared the optimistic outlook for the company. Wu projected single-digit quarterly revenue growth for the packaging and testing business, with a gross profit margin between 23% and 23.5%. The electronics foundry services are expected to see a 15% to 20% quarterly revenue increase.
Market expectations place ASE’s consolidated revenue for this quarter between NT$158 billion and NT$160 billion, marking a 12% to 14% increase. The advanced packaging sector is poised for substantial growth, driven by AI and high-performance computing (HPC) demands. Wu emphasized the company’s proactive efforts to expand production capacity to meet these needs.
Wu also revealed that ASE continues to enhance its advanced testing capabilities, including burn-in testing, which will support the company’s comprehensive turn-key service solutions, with benefits anticipated to materialize next year. The advanced packaging revenue is expected to account for over 5% of the total packaging and testing revenue this year, with further growth projected for next year.
