Financial Data and Key Metrics - Group revenue for Q3 2024 was $428.5 million, flat quarter-on-quarter (QoQ) but down 3.7% year-on-year (YoY) [21] - Group bookings for Q3 2024 were $406.1 million, up 7.1% YoY and slightly up QoQ [21] - Group gross margin improved to 41.0%, up 94 basis points QoQ and 683 basis points YoY [21] - Adjusted net profit was HKD29.5 million, down QoQ and YoY, mainly due to a foreign exchange loss of HKD108 million [20] - Group backlog at the end of Q3 2024 was $806 million, down QoQ due to SMT backlog consumption [19] Business Line Performance - SEMI revenue was $229.4 million, up 0.7% QoQ, contributing 53.5% to group revenue [22] - SEMI bookings were $237.9 million, up 7.0% QoQ, driven by demand for mainstream wire bonders and die bonders [23] - SMT revenue was $199.2 million, down 7.5% QoQ, with bookings at $168.2 million, down 5.4% QoQ [24] - SMT maintained its leading market position despite ongoing market softness [24] Market Performance - Advanced Packaging (AP) bookings remained robust, driven by thermal compression bonding (TCB) and photonics solutions [9] - TCB solutions contributed significantly to AP bookings and revenue, with strong demand for high bandwidth memory (HBM) applications [11][13] - Photonics solutions saw meaningful order wins, particularly for 800G optical transceivers in data centers [15] Company Strategy and Industry Competition - The company's broad-based portfolio allows it to mitigate weaknesses in one segment with strengths in another, such as AP momentum offsetting mainstream weakness [10] - The company is confident in its AP business prospects, with SMT bookings bottoming out and SEMI mainstream business on a recovery path, albeit slower than anticipated [27] - The company is expanding its internal capacity for TCB production, doubling up in 2025 compared to 2024 [50] Management Commentary on Operating Environment and Future Outlook - The semiconductor industry recovery remains uneven, with non-AI-related cyclical demand recovering slower than expected [6] - Generative AI demand is vigorous, driving significant capital spending from major AI players globally [8] - The company expects Q4 2024 revenue to be between $380 million to $460 million, with a midpoint of $420 million, down 3.5% YoY and 2% QoQ [27] Other Important Information - The company proposed to dispose of a stake in its strategic joint venture, Advanced Assembly Materials International Limited (AAMI), to Shenzhen Original Advanced Compounds Co, Ltd (SOAC) [25] - This disposal is expected to create additional value for shareholders, with the group receiving no less than 20% of SOAC shares and immediate cash flow [26] Q&A Session Summary Question: Booking outlook for Q4 2024 - Group bookings are expected to be flat QoQ, with SEMI up due to AP demand and SMT down due to market softness [30] Question: Sustainability of TCB orders into 2025 - The AI momentum is expected to continue into 2025, driving demand for HBM and TCB solutions [33] Question: Potential TCB shipments in 2025 - The company does not comment on specific numbers but believes the HBM market is exciting and will continue to grow [37] Question: TCB tools for memory vs. logic - Memory tools are expected to take over in terms of volume compared to logic in 2025 due to increasing HBM demand [38] Question: Revenue recognition for bulk TCB orders - Revenue recognition will follow the shipment schedule, with production ramping up in Q4 2024 and Q1 2025 [57] Question: Photonics and silicon photonics commercialization timeline - Photonics demand is already strong, while silicon photonics is still in its infancy and expected to pick up by 2026 [62][63] Question: FX impact on financials - The company experienced a significant FX loss in Q3 due to US dollar depreciation, but a strengthening dollar could lead to positive FX impacts [83][84] Question: SEMI margin sustainability - The high SEMI margin in Q3 was due to high absorption from TCB production ramp, but future margins could fluctuate due to product mix and volume effects [88] Question: Component and capacity shortage concerns - The company mitigates supply chain risks through risk buys, ensuring timely delivery of TCB tools [91] Question: Shareholder return policy and CapEx - The group's CapEx runs between HKD400 million to HKD600 million annually, with no updates on dividend policy [99]
ASMPT(ASMVY) - 2024 Q3 - Earnings Call Transcript