Financial Data and Key Metrics Changes - ASMPT reported Q1 2024 revenue of US$401.4 million, down 7.8% quarter-on-quarter due to declines in both SEMI and SMT segments, with SEMI experiencing a steeper decline due to the prolonged semiconductor down cycle [18][15] - Adjusted net profit for Q1 was HK$177.5 million, an increase of 132.1% quarter-on-quarter, and adjusted earnings per share rose by 138.9% to HK$0.43 [17] - Group gross margin slightly declined by 40 basis points quarter-on-quarter to 41.9%, primarily due to lower gross margin in SMT, but remained relatively high compared to previous quarters [19][15] Business Line Data and Key Metrics Changes - SEMI segment revenue was US$175.8 million, down 13.7% quarter-on-quarter, with declines attributed to industry weakness in deposition tools [20] - SMT segment revenue was US$225.5 million, a marginal decline of 2.6% quarter-on-quarter, contributing about 56% of Group revenue, driven mainly by automotive and industrial applications [24] - SEMI bookings grew 25.1% quarter-on-quarter to US$199 million, while SMT bookings increased 10.1% to US$210.3 million, driven by advanced packaging and automotive applications [22][24] Market Data and Key Metrics Changes - The automotive applications continued to form the highest proportion of overall Group revenue, with SMT's automotive application revenue growing despite overall market softness [5] - Group bookings increased by 17% quarter-on-quarter to US$409.3 million, supported by strong demand for advanced packaging solutions [18][16] - The Group's backlog remained stable at approximately US$849 million at the end of Q1 [16] Company Strategy and Development Direction - ASMPT remains optimistic about long-term growth prospects, supported by structural trends in automotive electrification, smart factories, green infrastructure, 5G, IoT, and AI [28] - The company is investing an additional HK$250 million in R&D and infrastructure for 2024, with projects on track to intensify throughout the year [20] - Advanced packaging solutions are highlighted as having the highest growth potential, with the company positioned to capitalize on increasing demand from generative AI and high-performance computing customers [9][28] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment presents challenges, including a slow recovery in the Chinese economy, geopolitical conflicts, and inflationary pressures affecting consumer sentiment and electronics demand [4] - Management noted that while the SEMI segment is facing a prolonged down cycle, the SMT segment is stabilizing, providing some resilience to the Group's overall performance [15][5] - The company expects Q2 2024 revenue to be between US$380 million to US$440 million, indicating a decline of 17.6% year-on-year but a slight increase of 2.2% quarter-on-quarter [26] Other Important Information - The Group's advanced packaging solutions, particularly thermal compression bonding (TCB), are expected to see increased orders driven by generative AI applications [10][12] - The company has begun shipping next-generation TCB tools for chip-to-substrate applications and anticipates further orders in the coming quarters [10][52] Q&A Session Summary Question: TCB order momentum and shipment expectations - Management indicated that TCB order momentum has improved, with shipments to leading foundry customers already initiated, and they expect continued acceleration in TCB adoption [32][33] Question: HBM adoption and market share dynamics - Management expressed optimism regarding HBM adoption for TCB, noting that TCB tools are superior to mass reflow tools in terms of accuracy and handling capabilities, with expectations for increased market share as HBM applications grow [35][39] Question: Booking trends for Q2 and recovery expectations - Management expects Q2 bookings to be flattish on a quarter-on-quarter basis, with year-on-year increases anticipated, particularly from the SEMI segment [46][47] Question: Chip-to-wafer TCB progress and order flow - Management confirmed that demo tools for chip-to-wafer applications have been delivered to a leading foundry, with expectations for concrete orders in the latter part of 2024 or early 2025 [52][53] Question: Gross margin trends and future expectations - Management clarified that while Q1 gross margins were impacted by one-off sales from previously provisioned inventory, they expect margins to improve as advanced packaging contributions increase over time [76][78]
ASMPT(ASMVY) - 2024 Q1 - Earnings Call Transcript