ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembler and tester, yesterday issued an optimistic outlook in expectation that its core business revenue would grow more than 20 percent this year on stronger customer demand and limited capacity.
Earlier this year, ASE projected that revenue from its chip assembly and testing services would this year be double the estimated revenue growth of the semiconductor industry.
“We are seeing stronger assembly and testing manufacturing demand than our previous target,” ASE chief operating officer Tien Wu (吳田玉) told an online investors’ conference. “Our sentiment is better than our previous guidance. The momentum will last into next year.”
Photo: Grace Hung, Taipei Times
Customer demand indicates that there would be better than seasonal demand in the first quarter next year, Wu said.
That might create an unusual situation in which the first quarter could be better than the fourth, he added.
ASE expects that supply and demand balance would be reached in 2023, given long manufacturing equipment delivery time stretching to about one year, Wu said.
“Next year, we still need to be smart and efficient in managing the bottleneck,” he added.
In response to investors’ concern about double booking, Wu said inventory correction might occur, but it should be temporary and limited to certain regions.
It would have a limited impact on ASE’s overall business momentum, he added.
Many of its customers had signed long-term service agreements and intend to extend such contracts to 2023, the company said, adding that long-term supply agreements were announced in April as customers sought to secure capacity amid a supply crunch.
In this quarter, ASE expects assembly and testing manufacturing shipments to expand 12 percent from the second quarter, while average selling prices are to hold steady at last quarter’s level, it said.
Gross margin could improve about 1.2 percentage points this quarter from 25.6 percent last quarter, the company said, after already reaching its target of 25 percent for the year.
ASE also expects gross-margin improvement next year.
ASE yesterday posted 49 percent annual growth in net profit to NT$10.34 billion (US$370 million) during the second quarter, compared with NT$6.94 billion. That represented a quarterly increase of 22 percent from NT$8.48 billion.
Earnings per share rose to NT$2.4 last quarter from NT$1.63 a year earlier and NT$1.97 a quarter earlier.
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