ASE Technology Holding Co., Ltd. Q3 FY2024 earnings call

• Third quarter consolidated results: Fully diluted EPS TWD2.17, basic EPS TWD2.24. Consolidated net revenues increased 14% sequentially and 4% year-over-year. Gross profit TWD26.4 billion with a gross margin of 16.5%.
• ATM performance: Revenue up sequentially and annually, margin improvement due to higher equipment utilization offset by raw material mix and utility costs. Operating expenses increased, but operating margin improved.
• EMS performance: Revenue improvement due to earlier product manufacturing start, but gross margin declined due to product mix. Operating expenses increased, partly due to newly acquired subsidiary.
• Investment in leading-edge advanced packaging: Expecting at least a doubling of revenues for 2025, with test business outgrowing assembly and expected pickup in fourth quarter.

ATM Business: In the third quarter of 2024, ATM revenues were TWD85.8 billion, up TWD8 billion sequentially and TWD2.1 billion year-over-year, representing a 10% sequential increase and 3% annual increase. Gross profit was TWD19.8 billion, with a gross profit margin of 23.1%, up 1 percentage point sequentially and 0.9 percentage points year-over-year. EMS Business: EMS revenues were TWD75.4 billion, improving TWD12.5 billion or 20% sequentially and TWD4.4 billion or 6% year-over-year. Sequentially, the EMS business’ gross margin declined 0.6 percentage points to 9% due to product mix.

• ATM: Fourth quarter 2024 revenues expected to grow slightly quarter-over-quarter, gross margin flattish quarter-over-quarter.
• EMS: Fourth quarter 2024 revenues expected to decline mid-single-digit quarter-over-quarter, operating margin to decline 1 percentage point quarter-over-quarter.
• Leading-edge advanced packaging: Expect to have over 10% of ATM revenue from leading-edge in 2025, with test business contributing more.

• Weather difficulties affecting labor costs (typhoon holiday overtime).
• Higher utility costs due to base rate increases.
• NT dollar fluctuations impacting margins.
• General market uncertainties affecting EMS margins and demand for some segments.

Q: How does the end demand for smartphones and automotive affect your business outlook?

A: Seasonality in smartphones, but no large-scale change in forecast. Automotive segment has increased, with business in normal pattern overall.