ASE Technology Holding Co (日月光投控) yesterday said that its growth momentum would continue this quarter after reporting a 13 percent rise in net profit last quarter from a quarter earlier, its best result this year.
Consolidated revenue this quarter is likely to grow about 3 percent sequentially, benefiting from seasonal upticks and rush orders, with its electronic manufacturing service (EMS) business estimated to grow 12 percent from NT$70.97 billion (US$2.19 billion) last quarter, ASE said.
The company’s core chip assembly and test manufacturing (ATM) business remains under pressure as customers digest inventory and demand remains soft for end devices, with revenue likely to fall 3 to 5 percent from NT$83.68 billion last year, it said.
Photo courtesy of ASE Technology Holding Co
Equipment utilization for ATM services is to drop below the 65 percent of last quarter, it added.
It expects rush orders to keep trickling in this quarter from all segments, as customers are cautious about restocking, ASE said, adding that it would keep its capital expenditure unchanged at US$1 billion.
“We did see a mild seasonal ramp, but not necessarily a rapid recovery for the industry this quarter,” ASE said.
Gross margin for its ATM business would be unchanged at 22 percent this quarter from last quarter, but operating margin for its EMS business might be higher than 3.3 percent this quarter, it said.
“Overall, the situation is stabilizing now,” ASE chief financial officer Joseph Tung (董宏思) told an online investors’ conference.
“We are seeing signs that the [industry] inventory has been consumed and the digestion should be approaching its tail end now,” he added.
That would bode well for ASE to return to annual growth in revenue next year, Tung said.
One of the growth areas is advanced packaging services, specifically from chip-on-wafer-on-substrate (CoWoS)-related advanced packaging services, he said.
Revenue from CoWoS-related packaging services is forecast to double next year from this year, he said.
ASE is collaborating with foundry United Microelectronics Corp (聯電) to produce silicon interposer wafers, a key part of the CoWoS technology, which is used to produce artificial intelligence chips.
ASE’s net profit last quarter expanded to NT$8.78 billion from NT$7.74 billion in the second quarter. On an annual basis, net profit plummeted 50 percent from NT$17.47 billion.
Earnings per share rose to NT$2.04 last quarter from NT$1.8 a quarter earlier, down from NT$4.03 a year earlier.
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