ASE Technology Holding Co Q2 Revenue Insights
ASE Technology Holding Co, a major chip supplier for Apple Inc, reported a modest fiscal second-quarter of 2024 revenue growth of 2.9% year-on-year to 140.24 billion New Taiwan dollars ($4.35 billion). Despite missing the analyst consensus estimate, the company’s revenue showed a healthy quarter-on-quarter increase of 5.6%.
Revenue Breakdown by Business Segment
The net revenues for the ATM (assembly, testing, and material) business stood at 77.81 billion New Taiwan dollars, reflecting a 2.2% year-on-year and 5.3% quarter-on-quarter growth. On the other hand, EMS (electronic manufacturing services) net revenues reached 62.91 billion New Taiwan dollars, up by 4.1% year-on-year and 6.0% quarter-on-quarter.
Financial Performance
ASE Technology saw an increase in gross margin by 70 basis points quarter-on-quarter, reaching 16.4%. The operating margin also grew by 70 basis points to 6.4%. Despite a diluted EPS of 1.75 New Taiwan dollars (or $0.109 per ADS), slightly below the analyst consensus, the company continues to demonstrate financial resilience.
Strategic Investments and Expansion
Earlier in July, ASE Technology inaugurated its second testing facility in San Jose, California, aiming to bolster its advanced chip testing capabilities to cater to the rising demand for artificial intelligence (AI) and high-performance computing (HPC) technologies.
The company’s subsidiary, ISE Labs Inc, has pumped significant investments of up to $500 million into its U.S. labs, with a further $200 million earmarked for the San Jose facility. Additionally, ASE Technology revised its capital spending upwards by 10% in April to $2.31 billion to meet the surge in market demand.
Moreover, plans are in place to allocate a larger portion of the budget to the chip testing business, enhancing it to 24% from the original 18%. The company is actively scouting potential locations for advanced chip packaging facilities in the U.S., Japan, and Mexico, showing a commitment to strategic growth.
Market Performance and Outlook
ASE Technology Holding Co has demonstrated robust stock performance, with shares gaining over 37% in the last 12 months. Despite a slight dip of 0.38% in premarket trading, the company’s resilience and growth trajectory portray a promising outlook in the semiconductor industry.
Concluding Thoughts
ASE Technology Holding Co’s incremental revenue growth, strategic investments in cutting-edge technologies, and expansion plans underscore its position as a key player in the semiconductor ecosystem. With a steadfast commitment to innovation and market responsiveness, the company continues to chart a path of sustainable growth and value creation for its stakeholders.