Financial Data and Key Metrics Changes - Unconsolidated revenue grew by 9% year on year in 2025, with ATM revenues up 18% year on year [6] - Consolidated net revenues for Q2 2025 were NT$150.8 billion, representing a 2% sequential increase and a 7% year-over-year increase [30] - Gross profit for Q2 2025 was NT$25.7 billion, with a gross margin of 17%, improving by 0.2 percentage points sequentially and 0.6 percentage points year over year [31] - Operating profit was NT$10.2 billion, up NT$500 million sequentially and NT$1.2 billion year over year, with an operating margin of 6.8% [32] Business Line Data and Key Metrics Changes - ATM business revenues for Q2 2025 were NT$92.6 billion, up NT$5.9 billion sequentially and NT$14.8 billion year over year, representing a 7% sequential increase and a 19% annual increase [35] - EMS revenues for Q2 2025 were NT$58.8 billion, declining 6% sequentially and 7% year over year [42] - The testing business grew by 31% year on year in the first half of 2025, with expectations for continued momentum into the second half [7] Market Data and Key Metrics Changes - The company noted a strong demand for high-performance computing (HPC) and AI, with a healthy recovery observed across all sectors in Q2 2025 [62] - The disparity between AI and other general sectors is expected to improve in 2026 and beyond [20] Company Strategy and Development Direction - The company aims to expand its leading-edge advanced packaging and testing revenue, targeting a significant increase in 2025 [8] - Investment in R&D, human capital, advanced capacity, and smart factory infrastructures is seen as crucial for multiyear growth [9] - The company is focusing on resource optimization between Taiwan and overseas expansions due to current market dynamics [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects driven by AI proliferation and a general recovery expected in 2026 [9] - The impact of foreign exchange fluctuations was highlighted as a temporary challenge, with expectations for margins to return to structural levels in the future [28][29] - Management emphasized the importance of execution and operational efficiency in navigating current challenges [22] Other Important Information - The company is experiencing a full capacity in leading-edge operations in Taiwan, prompting considerations for overseas expansions [20] - The company anticipates increasing its debt throughout the year, with a net debt to equity ratio expected to peak in Q3 2025 [45] Q&A Session Summary Question: How to reconcile strong ATM guidance with slow end markets? - Management indicated that guidance is based on firm customer orders covering AI and other sectors, suggesting a strong outlook despite general market weakness [60][62] Question: Why maintain revenue guidance despite TSMC's revision? - Management explained that their capacities are full and incremental capacities are being added, indicating a cautious approach to revenue guidance [65] Question: Will pricing strategy change due to current currency environment? - Management noted that strategic initiatives are being recalibrated, including pricing strategies, but emphasized the importance of customer relationships and long-term growth [72][76] Question: Expectations for AI-related business growth in 2026? - Management expressed optimism about growth in both packaging and testing, with a focus on expanding capabilities to meet increasing demand [79][88]

Financial Performance - First Half 2025 - Consolidated revenues grew by 9% year-over-year (YoY) in the first half of 2025 [3] - ATM (Assembly, Testing, and Material) revenues increased by 18% YoY in the first half of 2025 [3] - The testing business experienced substantial growth, increasing by 31% YoY in the first half of 2025 [3] Strategic Focus - Advanced Packaging and Testing - Leading-edge advanced packaging and testing revenues accounted for over 10% of ATM revenues in the first half of 2025, compared to 6% for the full year 2024 [3] - The company targets a US$1 billion increase in leading-edge advanced packaging and testing revenues versus 2024, contributing 10% of growth [4] - The company expects revenue uptrend continuing into 2026 and beyond driven by leading-edge solutions and broad-based semiconductor demand related to AI proliferation and general recovery [4] Capital Expenditure - Machinery capital expenditure (capex) amounted to US$19 billion in the first half of 2025 [3] - Building, facility, and automation capex reached US$09 billion in the first half of 2025, primarily driven by advanced packaging and testing [3] Second Quarter 2025 Results (NT$ million) - ATM net revenues for Q2 2025 were 91,648, representing a 20% YoY increase [10] - EMS net revenues for Q2 2025 were 58,374, showing a 7% YoY decrease [10] - Total net revenues for Q2 2025 reached 150,750, representing a 7% YoY increase [10]

Core Insights - ASE Technology Holding Co., Ltd. reported unaudited net revenues of NT$150,750 million for 2Q25, representing a year-over-year increase of 7.5% and a sequential increase of 1.8% [1] - Net income attributable to shareholders for the quarter was NT$7,521 million, down from NT$7,778 million in 2Q24 and NT$7,554 million in 1Q25 [1] - Basic earnings per share for 2Q25 were NT$1.74 (US$0.111 per ADS), compared to NT$1.80 for 2Q24 and NT$1.75 for 1Q25 [1] Financial Performance - Net revenues from packaging operations, testing operations, EMS operations, and others accounted for approximately 49%, 11%, 39%, and 1% of total net revenues, respectively [6] - Cost of revenues for the quarter was NT$125,063 million, an increase from NT$123,260 million in 1Q25 [6] - Gross margin increased by 0.2 percentage points to 17.0% in 2Q25 from 16.8% in 1Q25 [6] - Operating margin was 6.8% in 2Q25, compared to 6.5% in 1Q25 [6] Non-Operating Items - Net foreign exchange gain was NT$11,885 million, primarily due to the depreciation of the U.S. dollar against the New Taiwan dollar [3] - Total non-operating expenses for the quarter were NT$938 million [6] - Income before tax was NT$9,255 million in 2Q25, compared to NT$9,810 million in 1Q25 [6] Customer Concentration - The five largest customers accounted for approximately 43% of total net revenues in 2Q25, down from 44% in 1Q25 [11] - One customer represented more than 10% of total net revenues in 2Q25 [11] - Top 10 customers contributed 60% of total net revenues in 2Q25, compared to 61% in 1Q25 [11] Capital Expenditures - Equipment capital expenditures in 2Q25 totaled US$992 million, with US$690 million allocated to packaging operations [11] - Total unused credit lines amounted to NT$355,299 million as of June 30, 2025 [11] - Current ratio was 1.02 and net debt to equity ratio was 0.52 as of June 30, 2025 [11]

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Financial Performance - Consolidated - Total net revenues for Q1 2025 were NT$148,153 million, a 9% decrease QoQ and a 12% increase YoY[3] - ATM (Assembly, Testing, and Material) revenue was NT$85,606 million, representing 57.8% of total net revenues[3] - EMS (Electronic Manufacturing Services) revenue was NT$61,860 million, accounting for 41.7% of total net revenues[3] - Net income attributable to shareholders of the parent was NT$7,554 million[3] Financial Performance - ATM - ATM revenue in Q1 2025 reached NT$85,606 million, a 2% decrease QoQ but a 17% increase YoY[3] - Packaging accounted for 80.0% of ATM net revenues, totaling NT$69,360 million[7] - Testing contributed 18.5% to ATM net revenues, amounting to NT$16,004 million[7] - ATM gross profit was NT$19,611 million, with a gross margin of 22.6%[7] Financial Performance - EMS - EMS net revenues for Q1 2025 were NT$62,295 million, a 17% decrease QoQ and a 5% increase YoY[17] - EMS gross profit was NT$5,528 million, resulting in a gross margin of 8.9%[17] Balance Sheet Items - Cash and cash equivalents stood at NT$77,100 million as of March 31, 2025[19] - Total assets amounted to NT$774,177 million[19] - Total liabilities were NT$439,154 million[19] - Total equity (including non-controlling interest) was NT$335,023 million[19] Q2 2025 Outlook - The company projects ATM revenue growth of 9% to 11% QoQ in NT dollar terms[24] - The company anticipates ATM gross margin to increase by 140-180 basis points QoQ[24] - The company expects EMS revenue to decline by 10% YoY in NT dollar terms[24] - The company forecasts EMS operating margin to decline by 100 basis points YoY[24]

Financial Data and Key Metrics Changes - The company recorded fully diluted EPS of $1.64 and basic EPS of $1.75 for the first quarter, with consolidated net revenues declining by 9% sequentially but increasing by 12% year over year [9][12] - Gross profit was NT$24.9 billion with a gross margin of 16.8%, improving by 0.4 percentage points sequentially and 1.1 percentage points year over year [10][12] - Operating profit was NT$9.7 billion, down NT$1.5 billion sequentially but up NT$2.2 billion year over year, with an operating margin decline of 0.4 percentage points sequentially and an improvement of 0.9 percentage points year over year [11][12] Business Line Data and Key Metrics Changes - In the ATM business, revenues were NT$86.7 billion, down NT$1.7 billion sequentially but up NT$12.8 billion year over year, representing a 2% decline sequentially and a 17% increase annually [15] - The EMS business reported revenues of NT$62.3 billion, declining NT$12.6 billion or 17% sequentially, while increasing NT$2.9 billion or 5% year over year [23] Market Data and Key Metrics Changes - The company noted a potential shallower seasonal dip in EMS business due to customers adjusting order flow patterns, indicating a more stable demand environment [6][23] - The computing segment within the ATM business saw significant growth, particularly driven by stable high demand for AI products, while other segments like handsets were seasonally impacted [19] Company Strategy and Development Direction - The company aims to minimize short-term noise to focus on long-term signals, emphasizing the importance of technological trends and process improvements to maintain competitive advantages [7][8] - The company is committed to increasing its market share in the testing segment, targeting a contribution of 19% to 20% of overall ATM revenue by year-end [21][22] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the second quarter outlook, expecting ATM revenues to grow by 9% to 11% quarter over quarter, while EMS revenues are projected to decline by 10% year over year [30][31] - The management acknowledged the challenges posed by macroeconomic volatility but remains focused on long-term strategic investments [6][8] Other Important Information - The company anticipates a peak in net debt to equity ratio at around 60% in the third quarter of the year, with total unused credit lines amounting to NT$358.4 billion [26] - Capital expenditures for the first quarter totaled NT$892 million, with significant investments planned for machinery and equipment to support future product demands [27][28] Q&A Session Summary Question: AI test market share and CapEx on testing - Management confirmed aggressive investments in the test segment, aiming to increase market share, particularly in AI chip testing, with a target of reaching 20% of ATM revenue by year-end [34][36] Question: U.S. investments and capacity planning - The company is evaluating opportunities for operations in the U.S. to support customer demand, with no specific investment size or timing details available yet [42][44] Question: Market share in AI testing across different products - Management indicated that while they do not have a detailed breakdown of market share by product, they are focused on expanding their test business across all areas, including AI chips [47][49] Question: Impact of tariffs on business - Management stated that the direct exposure to U.S. tariffs is minimal, with less than 10% of EMS shipments going directly to the U.S., and they do not anticipate significant impacts from potential tariffs [93][94] Question: General demand outlook for consumer electronics and automotive - Management noted a gradual recovery in most sectors, with high-end automotive showing better momentum, while lower-end segments are still undergoing inventory corrections [97]

Financial Data and Key Metrics Changes - The company reported fully diluted EPS of $1.64 and basic EPS of $1.75 for Q1 2025, with consolidated net revenues declining by 9% sequentially but increasing by 12% year over year [8][12] - Gross profit was NT$24.9 billion with a gross margin of 16.8%, improving by 0.4 percentage points sequentially and 1.1 percentage points year over year [9][10] - Operating profit was NT$9.7 billion, down NT$1.5 billion sequentially but up NT$2.2 billion year over year, with an operating margin of 7.1% [11][13] Business Line Data and Key Metrics Changes - ATM business revenues were NT$86.7 billion, down NT$1.7 billion sequentially but up NT$12.8 billion year over year, representing a 2% decline sequentially and a 17% increase annually [15] - EMS business revenues were NT$62.3 billion, declining NT$12.6 billion or 17% sequentially, while increasing NT$2.9 billion or 5% year over year [22] Market Data and Key Metrics Changes - The company noted a potential shallower seasonal dip in EMS business due to customers adjusting order flow patterns [6] - The computing segment within the ATM business saw significant growth, driven by stable high demand for AI products, while handsets and communications devices were seasonally impacted [18] Company Strategy and Development Direction - The company aims to minimize short-term noise to focus on long-term signals, emphasizing the importance of technological trends and process improvements [7][8] - The company is committed to expanding its test business, targeting a market share increase to 19%-20% of overall ATM revenue by year-end [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about volatility impacting long-term planning but remains focused on core industry trends [6][7] - For Q2 2025, ATM revenues are expected to grow by 9% to 11% quarter over quarter, while EMS revenues are projected to decline by 10% year over year [30][31] Other Important Information - The company anticipates a peak in net debt to equity ratio at around 60% in Q3 2025, with total unused credit lines amounting to NT$358.4 billion [25] - Capital expenditures for Q1 2025 totaled NT$892 million, with significant investments in testing operations [26][27] Q&A Session Summary Question: AI test market share increase - Management confirmed that the focus is on expanding market share in AI chip testing, particularly for GPUs, and emphasized the economic returns from test investments [34][37] Question: U.S. investments and capacity - Management is evaluating opportunities for U.S. operations to support customer needs but has not finalized investment details [40][42] Question: Market share in AI testing - Management stated they are a dominant player in wafer sort testing and are aggressively moving into final testing, expecting significant growth in the second half of the year [48][50] Question: Tariff impact - Management indicated that the direct exposure to U.S. tariffs is minimal, with less than 10% of EMS shipments going directly to the U.S. [94][96] Question: General demand outlook - Management noted a gradual recovery in consumer electronics, with automotive demand showing better momentum, particularly in high-end segments [97][98]

Core Viewpoint - ASE Technology Holding Co., Ltd. reported a net revenue of NT$148,153 million for Q1 2025, reflecting an 11.6% increase year-over-year but an 8.7% decrease sequentially. The net income attributable to shareholders was NT$7,554 million, up from NT$5,660 million in Q1 2024 but down from NT$9,312 million in Q4 2024 [1][3][16]. Financial Performance - **Net Revenues**: NT$148,153 million in Q1 2025, up 11.6% YoY, down 8.7% QoQ [1][16]. - **Net Income**: NT$7,554 million in Q1 2025, up from NT$5,660 million in Q1 2024, down from NT$9,312 million in Q4 2024 [1][16]. - **Earnings Per Share**: Basic EPS of NT$1.75 (US$0.106) and diluted EPS of NT$1.64 (US$0.100) for Q1 2025 [1][16]. Revenue Breakdown - **ATM Operations**: Net revenues of NT$86,668 million, up 17.3% YoY, down 1.9% QoQ [5][15]. - **EMS Operations**: Net revenues of NT$62,295 million, up 4.9% YoY, down 16.8% QoQ [5][18]. Cost Structure - **Cost of Revenues**: NT$123,260 million for Q1 2025, down from NT$135,633 million in Q4 2024 [6][16]. - **Raw Material Costs**: NT$72,343 million, representing 49% of total net revenues [6]. - **Labor Costs**: NT$16,997 million, representing 11% of total net revenues [6]. Margins - **Gross Margin**: Increased to 16.8% in Q1 2025 from 16.4% in Q4 2024 [6]. - **Operating Margin**: Decreased to 6.5% in Q1 2025 from 6.9% in Q4 2024 [6]. Non-Operating Items - **Net Interest Expense**: NT$1,256 million [6]. - **Net Foreign Exchange Loss**: NT$1,675 million, primarily due to the appreciation of the U.S. dollar against the New Taiwan dollar [6]. - **Net Gain on Valuation of Financial Assets**: NT$2,873 million [6]. Customer Concentration - The top five customers accounted for approximately 44% of total net revenues in Q1 2025, with two customers each contributing over 10% [12]. - The top ten customers contributed 61% of total net revenues in Q1 2025, compared to 60% in Q4 2024 [12]. Capital Expenditures - Equipment capital expenditures in Q1 2025 totaled US$892 million, with significant allocations to packaging and testing operations [12]. Liquidity and Capital Resources - Current ratio was 1.04 and net debt to equity ratio was 0.41 as of March 31, 2025 [12]. - Total unused credit lines amounted to NT$358,413 million [12]. Company Overview - ASE Technology Holding Co., Ltd. is a leading provider of semiconductor manufacturing services, offering comprehensive solutions in assembly and testing, with a global presence across multiple countries [9].

Core Viewpoint - ASE Technology Holding Co., Ltd. has filed its annual report on Form 20-F for the year ended December 31, 2024, with the U.S. Securities and Exchange Commission, making it available on its website and the SEC's website [1] Group 1 - The 2024 Form 20-F includes audited financial statements that are available to shareholders upon request and free of charge [1] - Shareholders can request hard copies of the audited financial statements by contacting Citibank Shareholder Services [1]

Financial Performance and Risks - The company recorded net foreign exchange losses of NT$2,459.5 million in 2022, net foreign exchange gains of NT$998.1 million in 2023, and net foreign exchange losses of NT$5,538.4 million (US$168.9 million) in 2024[96]. - The company recognized impairment charges of NT$388.8 million, NT$146.6 million, and NT$176.0 million (US$5.4 million) in 2022, 2023, and 2024, respectively, primarily related to property, plant and equipment, and other intangible assets[101]. - The company faces potential tax uncertainties that may arise from operations or changes in tax laws, which could adversely affect financial condition and results of operations[107]. - Future dividends may be affected by the company's financial condition, cash balances, and other factors, with no assurance of continued declaration of dividends[147]. - The company is subject to various laws and regulations regarding environmental compliance, which may require additional funds and could adversely affect financial condition[115]. - The company may incur significant expenses to comply with environmental regulations aimed at reducing carbon emissions, which could negatively impact financial performance[119]. Environmental and Operational Strategies - The company has established a wastewater reclamation recycling system and implemented water use strategies to address risks related to water shortages[120]. - The company plans to purchase solar photovoltaic and onshore wind power and negotiate for offshore wind power to transition towards net-zero emissions[121]. - The company conducts evaluations for potential overseas plant expansions in Southeast Asia, Northeast Asia, Europe, and the Americas to mitigate regional political risks[131]. Market and Shareholder Considerations - Approximately 58.5%, 55.4%, and 55.1% of the company's operating revenues in 2022, 2023, and 2024, respectively, were derived from operations in Taiwan[128]. - The market for the company's Common Shares and ADSs may not be liquid, affecting price volatility and execution of buy and sell orders[138]. - Holders of Common Shares and ADSs may experience dilution due to stock bonuses, share options, or additional equity issuance[152]. - Future sales of Common Shares or ADSs by the company or shareholders could negatively affect market prices[163]. - Short selling practices may drive down the trading price of the ADSs, impacting market perception[165]. - Negative publicity from short selling could lead to significant resource expenditure for the company to defend against allegations[167]. Operational Risks - The company is subject to risks from public health epidemics, natural disasters, and other disruptive events that could materially affect its business and financial condition[126]. - The company has experienced interruptions to its production schedule primarily due to power outages caused by earthquakes, which could significantly disrupt operations[132]. - The company is vulnerable to natural disasters, including earthquakes and typhoons, which could severely disrupt normal operations and adversely affect results[132]. - The company faces risks related to cyberattacks that could disrupt business operations and adversely affect financial condition[123]. Shareholder Rights and Restrictions - As of December 31, 2024, approximately 227,621 thousand share options and restricted stocks were outstanding[153]. - The ability to deposit Common Shares into the ADS facility is restricted by R.O.C. law, potentially affecting liquidity and market price[153]. - Holders of ADSs will not have the same voting rights as Common Shareholders, which may impact the value of their ADSs[157]. - The right of holders of ADSs to participate in rights offerings is limited, which could lead to dilution of their holdings[158]. Financial Market Trends - The TWSE Weighted Index peaked at 24,390.03 on July 11, 2024, and reached a low of 17,161.79 on January 17, 2024, with the trading price of the company's Common Shares ranging from NT$123.0 to NT$193.5 per Share[145].