ASX - Earnings call transcript Q3 2020 | ASE Technology Holding Co., Ltd.

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Ken Hsiang

Hello. I am Ken Hsiang, the Head of Investor Relations for ASE Technology Holdings. Welcome to our Third Quarter 2020 Earnings Release. Thank you for attending our conference call today. Please refer to our safe harbor notice on Page 2. having event. and to participation broadcast consent this of participants their questions voices via All like remind statements. would that I to follows the call may presentation that contain forward-looking everyone on this high These are actual may materially. forward-looking differ risk subject a results statements and degree to our of

of our For New are in dollar generally the purposes Dollars unless figures stated Taiwan otherwise this presentation, indicated.

from accounting using financials with Taiwan As I accordance Taiwan may today a Tien in IFRS Taiwan by other Tung are Wu, COO based presented Holdings results differ am joined ASE materially company, CFO. standards. and Results presented using ASE our Dr. IFRS. Joseph Holdings

For a our today's financial providing market our overview, over and guidance. provide will call, and be Joseph going recap be results, Tien will will I a

the Q&A remarks. following will a We have prepared session

of As in moment, dull the with never has third especially is there proven rest XXXX, the that a the industry. electronics quarter

us. run ran was third seasonality through eventful highs. Typical historical with for August reaching The remarkably quarter rates

the Bureau Security, effect. in short, Export However, into for EAR of went September, Regulation, Administration and Industry

a we replace by loading business, open snapped overall left process as full commence business. to anticipated, for utilization. result, back This than capacities much exiting our occurred levels to our more As quickly ATM

for the specifically in EAR During the interface impacted one and took related related to inventory used EAR. charges customers. cost to we quarter, two One unused goods for of in boards non-operation

manufacturing level. We total, advanced relative EMS NT eliminated year ATM you find don't ramped the pattern. also strong EMS Company Intercompany In across packaging business during consolidation. P&L the in up experienced to the the a at later value dollar. this transactions X, dollar for between bit yet generally defer in with peaked to products. third have EMS Page wire with and that ended in our section, deferred to We and our Meanwhile, where explanations near turn business highs this been has EMS a term the season. will U.S. our quarter believe of will quarter we Holding line results strength In ATM our we seasonal and our bond consolidated business Please SiP, core discussions. businesses the

gross exceeding gross had quarter, a fully Consolidated full-year This the and that We year-to-date $X.XX net billion, was perspective, on a EPS year-over-year. of and of For $XX.X X% already. EPS revenue have EPS and recorded EPS EPS diluted we basic of profit $XXX.X a representing basic of means XX% we third fully diluted $X.XX XX%. $X.XX. $X.XX increase margin increase of with a of XXXX billion quarter-over-quarter a

The declined primarily The mix. strong margins sequential NT X.X dollar. percentage decline EAR business gross is environment impact, primarily a and and EAR result and dollar the higher year-over-year. points points, EMS Our percentage result of the quarter-over-quarter of NT decline margin X.X stronger is impact by year-over-year the

while business X.X $X.X unit. percentage Our in points was point increased points, by business increasing currently is and increase, year-over-year. billion expense operating $XX.X declined in lower percentage declined, our percentage. This $X.X the billion percentage sequentially points expense X.X percentage below our Sequentially, Despite part the third percentage expenses operating trending to Operating EMS the and year-over-year of X.X by operating year-over-year. quarter to ATM operating result operating billion, X.X X.X%. margins unit operating XXXX our amount during profit higher as up sequentially, X.X% expenses in offset $X.X expenses billion our to

year-over-year. was quarter income improvement offset impairment effective by investment This The for totaling quarter of is the of an $X.X the operating an margin This we net of And quarter billion non-operating note the a Without in billion We was EAR Tax important quarter. to using had similarly, equipment amount exchange NT of billion. related of an dollar the write net amount and the part charge the of down. of the we margin of and XXXX strengthening write $X.X operating primarily the of loss quarter, gains. estimate billion, was the tax sequentially, we decline $X.X using expense operating interest EAR-related the sale have consists believe tooling net inventory the quarter estimate billion. third we $X.XX $X while inventory X.X%. During it billion. during and quarter $X.X rate, was would for basic billion exchange of inclusion Net of equipment Removing EPS rate EAR-related XX%. X.X%. foreign a representing the second $X.X down impact third rate, $X.X margin billion, and expense and for $X.X of an exchange

billion Basic bottom the expenses key to transactions margin of between P&L. X.X%. Holding our is net would is eliminated would at again excluding with Company EMS with noting Operating be worth gross ATM It inclusion of $X.XX. $XX.X XX.X% ATM revenue the intercompany and On PPA ATM without Consolidated with X.X%. page, EPS would PPA-related profit level be profit our On line that items, of margin we $XX.X PPA here reported businesses. billion expenses have revenue the excluding the contains profit a provided X billion, be an would of here operating related P&L margin. $X.X the Net Page gross be expenses.

this good. of do which get business for incredibly busy. had quarter and lines different happened at The re-tooling EAR lot Usually replacement busy quarter, for we we and pace. stopping devices, work, factory frenzied a of a third lot restarting in We We This ATM of devices. revenue it. were that's kind a busy was a

at significantly. of despite a the After about rather has vacated expectations happened. significant rushing that third products not ATM the business That's initially had the outperformed refill from our knocked our business quarter growth. result, capacity we lost, saw was which refill linear measured surprised the efficiency In Dr. products. achievement recovery The As we are we the disruption, to later the of EAR retrospect, size somewhat a the replace back still chain new given Instead, the business our initial finished, actually with at supply more anticipated. and Wu. pace

During environment our the NT the dollar dollar in quarter, which strengthening continued appreciated a seeing NT business ATM X.X%.

dollar Given for that our machinery stays position. movements strong structure compensate and are orders more dollars for that Shorter are equipment. adjust U.S. while be may U.S. to generally believe to we If we relatively are cheaper able a denominated term, costs longer denominated and term denominated higher to difficult pricing the brings dollars, factory purchase a NT our NT in dollar cost mostly NT us. strengthening

billion quarter $XX.X for increase year-over-year. the quarter $X.X billion last billion, the from year. a ATM X% For third revenues XXXX, previous represents up business $X.X the a and same period from This increase were sequentially X% up and

points came snapback billion primarily of and to billion and profit gross profit NT decline due stronger and our inventory business of EAR, XX.X%, stronger business ATM to and The $X.X year-over-year. of to attributable billion, billion year-over-year a revenue ATM primarily write-off a ATM Margin related X.X down customer was for for somewhat revenues was sequentially, impact. margin our NT percentage was Gross down EAR profit dollar. ahead down substrate $X.X impact. expectations year-over-year. post-EAR Our dollar and one-time of Gross $X.X sequential sequentially, in was $XX.X related decline

down lower $X.X operating and sequential sequentially During declines The by were expenses the billion were and third billion costs. year-over-year. quarter, billion, $X.X year-over-year $X.X driven administrative

percentage Our year-over-year. and XX.X%, sequentially, down percentage X.X operating expense points was X.X points percentage

year-over-year. billion, representing was $X.X During declining percentage quarter, year-over-year. an the margin point sequentially, Operating and improving X.X quarter-over-quarter billion a points $X.X profit billion operating of percentage third and of X.X% $X.X was decline X.X improvement

X.X by XX.X%. profit point a and graphical We type. market margin our NT write-off estimate revenue X.X one-time margin revenue be dollar you'll a has profit Without that ATM P&L. the impact our the Page to EAR ATM X, here. point not gross find segment, On X, percentage XX.X% On year-over-year. X, of you ATM gross of our depreciation impact Page had percentage For find presentation margin percentage be by ATM point changed Page margins, On will gross is much impact. would would and and operating X.X service operating also and PPA-related the sequentially, amortization, impact a inventory had strengthening a

As about to later. stated more full, process. outside our those are NPIs that wire this capacities bonding certain resurgence demand, well. X, bonding Wu, particularly On see and time, running NPI and back near you Dr. is by results of application. our you snapped can in longer earlier, this can of business We revenue believe associated performing its of EMS chart, from that capacities seeing From business our requiring business the a is here wire Page see

usually peak quarter of third represents the EMS For in terms business, quarter seasonality. the

demand SiP demand. With stronger a manufacturing strong consideration anticipated delayed somewhat than was we for business our cycle. However, in by anticipated, EMS driven that

During the products somewhat because billion third primarily by quarter-over-quarter EMS revenues a as result revenues year-over-year. of increased business had primarily our increased stronger offset of EMS of increasing for XX% seasonal revenues sequentially, later quarter, year-over-year and we cycle. $XX.X ramp. demand SiP X% seasonal a products

of and and gross year-over-year. for billion, The SiP customer Our by primarily year-over-year $X.X billion was sequentially, billion related improving were profit $X.X stronger driven products. percentage sequential The point EMS profit Gross the gross sequentially $X.X demand improvements margin is X.X came year-over-year. EMS business the percentage in result at improvement an mix product changes. margin for X.X%, primarily profit improvement X.X of and points

employee Our was sequentially expenses as increasing of as points, expenses increased billion dropping EMS quarter and percentage increasing $X.X Operating quarter, business X.X%, expense X.X% X.X profit a one year-over-year. last $X.X percentage billion, year-over-year. and billion increased percentage with units' sharing. point primarily $X.X operating compared were Operating result third

sequentially, primarily a operating Our The improvement demand. billion to sequential billion, $X.X the for $X.X due and quarter billion operating EMS a profit was $X.X was improvement year-over-year. increased improvement representing seasonal profit

EMS and a Our percentage percentage X.X%, improvement X.X improvement point margin X.X point is year-over-year. is which was operating sequentially

of of bottom the EMS our a you'll representation by on chart the the find application. revenue graphical page, half On

an regards roughly the the up our would We name continues expect impacting is expect EMS of billion an again our XXXXXX. product. resurgence U.S. to picked Our It Universal seasonally Scientific incremental dollars. on the of and own business the under the We unit in runs into and complete regulatory fourth pick under Stock the COVID-XX In segment traded ticker Exchange number our the segment Asteelflash, add Shanghai noting current share that to our this filings season translates this as quarter. SiP duration consumer we is that Europe X.X currently worth A reviews. up to company, Industrial of acquisition regulatory which to is XX% to

its country France As lockdown. of yesterday, announced wide second

line key of expect process for and On expect from before $XX.X currently current balance now we result, the X, We of equivalents, delayed. you somewhat quarter will financial with our a find yearend. we end the assets be the the completion complete cash to had items combination of As billion. regulatory Asteelflash to our At sheet. Page cash,

lines $X.X to $XXX.X increased Total debt amounted billion. billion interest-bearing Our unused to $XXX.X credit billion.

for billion. EBITDA quarter Our the $XX.X was

fan We million unusual and $XXX $XX will same find replacement scenario where model continue out you One that incremental package ratio target testing never U.S. another and instruments situation. others. becomes different there incremental by net million this for business with providing comes operations, happens. totaled is requires On of flip is Customers interconnect XXXX. fungibility million materials, expenditures our $XXX the in equipment Machinery perfect EMS used an million, $X one perfect third even us operations, equipment in replacement $XX and which end an understand of perfect process operations when business dollars types such debt-to-equity scenario, in almost operations, were the million a or chip. a or customer the may XX, And and and is in no completely packaging quarter to capital We customer same investment Unfortunately, XX% a to capital may used configurations. in uses expectation the expenditures. in unnecessary onboard. Page when tooling. use of entirely bumping tester platforms XX% of capital have XXXX

smaller make instruments to previously have investments. we on to tooling cases, or purchased larger many investments in result, a As load

refill, facilitating pickup significant addition seeing the we're wire to bond related our capacities. In in demand a in

bond terms. year-to-date XX% wire Year-to-date also, As XX% a year speak EAR revenues year-over-year Company grew grew points. revenue recap. a All in percentage XX% Tien gross dollar the on here Page shortly U.S. do U.S. ATM this dollar with improving revenues result, on terms, X.X terms. to-date of U.S. see Removing on EPS we impact in year-over-year need will X.X related gross dollar points. EMS presented Holding margins is brief currency have on information our is we the year-over-year expenses, improved margins percentage terms. and grew $X.XX. to invest On XX, lines,

environment, update the turn the overall to of market Tien an microphone For Dr. now I'll Wu. over

Tien Wu

like business Hi, a this offer would you to is Wu. Tien I environment.

XX, QX expect least that If particular, down tight. tightening you capacities look situation, we wire at tightness will bond we year. as In capacity because assembly this other are the in is The In believe tightness of environment, the friendly be Page tight. well all - to we're ASP extremely the as next capacities, particular to bond assembly in last environment wire at the seeing XXXX. in

years. seeing be margin do year. more in friendly this QX the expect the start comparing starting will environment we to But improvement fact, ASP we to XXXX previous In the

driving from of a about Let sectors the the have me our sector communication In XG growth. the portion perspective. talk we

sticks in multiple of as well the standards in automotive. also driving communication, a We as WiFi cycles lot upgrade have

a In QX. in demand this for QX, We seeing remarkable and as strength are strong been automotive QX will strong believe QX Computing have they in a seeing in QX. reflected and year. automotive and well sector. will remain We be slowdown and as consumer we're next recovery in

COVID-XX risk, reduce We Namely will has to for be lot A consumer new the the will our the view connectivity augmented social exposure The XXXX. the of people a also medical be the for I little COVID-XX I effect. with buying efficiencies. facilitating risk created believe to technology value of referring asking perspective be us our IT investors alternative like strong that you. our learn-from-home, products. would and products. of connectivity to IT technology of What medical are because also share minimize COVID-XX And because products, demands the values to to is addition traditional of the which medical an I computing to more, social the digital in of will bit work-from-home, elaborate and COVID-XX. and product was by reduce Because because are about

seeing So fundamental scenario, we're in this behavior. consumer in changes two

people more products. buy First, tend to IT

pay are with days, product the Second, willing IT almost showing is IT we products performance. buy to are people we the during all are seen to especially regard, products. particular COVID-XX communication this why sectors in It higher believe, the price in strength,

well product cell PC, So seen in wire the complexity Also, RF, die the with multiple fundamental mix that require we're for we of the are IoTs, the that number way upgrade which die changes in stacked we're automotive, with people for phone, are all mix, spend the cycles, In is buy doing and there in and believe we're more product before. regard, the through seeing Bluetooth as WiFi, now more product well particular, doing the have dies the XG, increasing. we're The than bonds seeing bond, which clearly to with not Analog as of wire the the willing permeate as in money before. the will as to product all products. we IT

of as the the XXXX of requirements as why years is That because forward. from cycle, just the it's are as devices this different in to automotive, some top in for a not wires, believe On the this consumer. the wire particular I number and number this kind going premium command bond as well year also also service, quality in of of the product, dies, and volume medical we quality well that can So, complexity. it's going is

me CapEx OSAT Let expenditure. about the comment overall

CapEx XXXX you In the in XXXX, as believe XXXX in we scenario, been that go complete has will have as have OSAT you particular overall been see which under do number If the as well and well ASE spending XXXX. invested. to XXXX back XXXX, that we not the view, industry,

commitment accelerate QX Going spending forward, such put anticipating customer's well the as can based to we capacity will that on as in demand. place in our we more in fulfill

be The new we Based Going we we exclude down as QX, will on than design experience Once and into page, the the on the our impact, partners market XXXX overall have bit contracts CapEx, the talked XX% be forecast, be revenue a supply next on In strong the all believe talked and remaining turn XX% well revenue XXXX. package Joseph But of that. the are our CFO a sales nature was long-term and today, Page all the help ATM will of more. and lost all Greater throughout XXXX, ASE ATM it comparing which believe as with moderating all capacity EAR Ken customers, little as wins about will our we the already shares our to and about of XX% In which we will XX%. through as effect again, will of XX. which calculation, in backfilled were of the you gain. to QX it the share and the zero. In action. as sectors painful run growth customers, in other types. QX gaining EAR optimistic QX is by to the to Ken talk well end we about rate. our to already quite QX, I'll EAR about impacted happy about lost in Please many if talk have about. chain be sudden the

next In already turn the Joseph asset year, the that, QX we're which any So write confident be QX With I was QX in charges. the work, we the our in to additional either the will CFO, Tung. growth it. number completed incur additional all this floor been year. Ken completed included will that today, that year-over-year or not talked as all of reported. of have just We tooling, positive. of With of other all or QX of we in by had a the will disposition, our still one-time XXXX in latest QX about off, words, be of

Joseph Tung

And good is Okay, everybody. Joseph. afternoon, this

quarterly on I very to Before Certainly a quickly we was give restriction a with momentum, third negative brief operating came substantially the our a It among results. now the I get like can comment much would out than quarter impact and comments reduce have into the going we the stronger forward. and further expected close EAR quarter very successfully managed of three. cooperation chaotic that financials, with different regain on units through

we set to progress the update a targets I that, the minutes at the to achieve out are want we beginning few with of Now financial the of some to making on on take year.

ratio, level OpEx XXXX ago, is our to had level. to quarter First back our three, it to down target from way target below go X.X%. of X.X% a come In the X.X% quarter

effort our with Now or believe exceed target, reach likely into I continuous more - that will not that. will reach going to only strongly QX, we we we're

we we or shall induced EAR and OPM margin, I stated on Second, take the if are from ahead, And impacts X% see right appreciation believe inventory operating dollar out NT the in year. we we improvement negative down.

to difficult ASE came the created margin of from is the A coordination. part synergy came from through between improvement overall margin and increasing it overall quantify SPIL synergy. improvement operating Although of operating

Going operation, procurement forward, we'll and further on development, deepen our and broaden alignment, part of business such various capacity including R&D. coordination

past momentum level. XXXX after leaning and support between XXXX on level, in XXXX while believe in more investment heavy to our should fall going this CapEx moderate. Thirdly strong should I point, XXXX At our years XXXX start CapEx, forward, CapEx amount business toward to the

XXXX our net see end With of will still Therefore, our XXXX. of improvement. will XX% the dividend $X to less reducing cash reaching by position good ratio payout per and deleveraging XX% probability allow no than improved it to target flow increase in debt-to-equity us while cash share our to CapEx

first ATM ATM our gross management follows. quarter XXXX be our In exchange should XXXX with with fourth the to XXXX me business guidance. XXXX and quarter similar now be overall quarter outlook as fourth similar NT let quarter first half half that, dollar level. XXXX margin on level. business with current assumptions, projects terms of Based for should rate you first performance fourth be Okay, give

be quarter NT the terms, with XXXX sequential fourth the levels. average rate second similar growth quarter of should Our and third EMS in dollar business revenue,

operating second levels. out. much. slightly EMS It figure you everybody third should quarter be I'm While very than average sure margin the fourth will but complicated, XXXX quarter that XXXX bit and is better a Thank

Q&A. I'd Question-and-Answer to Now to open Session the like floor

Operator

Yes, Ladies in Instructions]. thank now session. you. you. are gentlemen, we Q&A and [Operator Thank

of question Gokul round ahead, please. is JPMorgan. first Hariharan, The Go

Gokul Hariharan

managing and what potentially we quick talking on adjustments on That through the you're A in a QX, good about we could detail having Congrats margins, this that customers. having situation the potential discussions hi. price the could be - first fair ATM. bit conversations and are we some question in more Could Yeah, little little that a a my given results. on of on talk the year, talk about and you're the IC about away currency bit clearly improvement, question. margin currency with adjustments And with taken has side? is bit the price affected customers about talked

you. is, of that degree packaging is there announcing we give about for both capacity terms What in for Second China should as OSATs. in meaningful a think ASE, And see by does sold of ASE do Thank Kaohsiung? bond? well base capacity also in advanced small how investments wire fab towards shift you customer some build hear your we non-China happening

Tien Wu

on your first comment not we specific answer - will question So engagement. any the customer

a as today ASE bond However, gap, to gap a between to we multiple wire a moving efficiency are the XX%. [indiscernible]. much the there the is And as based contract. and It are a A in price a reflected. the product frame lead costs either bond there's or the demand anywhere gold X% business is on today, well service engaging customers, having and there wire as gap, is substrate Particularly XX% whenever they conversation that the else for base will example, new that we delivery, in strong. scenario, for and from is gold somewhere we're the be they is installment The customers price not largest lot quality. have are longer the they're very, of quite expedite and X% is, of with just overall or very cost of increase substantial. organic is kind best growth - ramp, a

example, right capacity XXXX talk In do it. all has be pay. to that and supply are put we a use. cautious. we're - now put little more we one you Right long me, six we're adding because in years to industry we adding, And cases, of bit have of sorry, making talking the the For have are we - now we're other will the all pace we been words, question we're But two cautious some adding believe capacity take about since comment? in understand or with or tightening situation. term a behind asking months, the in service I'm year place contract either terms industry capacity I'm There the now need you sorry. the Excuse

Gokul Hariharan

No, no, I'm on mute.

Joseph Tung

that I Operator, on you mute? yourself the put Gokul, don't think can was operator. that was

Operator

the interruption. for sorry. Yes, apologize I I'm

Tien Wu

Okay, right.

long. of which I next assembly particular in I to lead the capacity to the we any believe, out right? scenario, over of in we And is the QX believe answered imagination building quite situation need the last will at least year, that time question. comment that is So So why tightness first don't equipment now right stretch are

China. do customers there chain cases have customers our they moving out have comment also are on which I I China. of I intended be For believe the have in from can't be we one We to believe Obviously, do both who really other question, moving cases. the we supply and but more sides. have those seen of second could movement

Gokul Hariharan

Dr. Wu. Thanks,

gap Just one XX% bonding, is the wire to right? to confirmation XX% to in demand supply

Tien Wu

a of on am As I comment correct. that of ASE. But is making today, behalf

Gokul Hariharan

and queue. Thank the much very you thank back go will Understood, to you. I

Operator

one ahead, to from Next Bruce Goldman Sachs. Go question ask is please.

Bruce Lu

Hi.

So my for for question mainly is Ken.

maybe smartphone we from Can I a the that for what growth lot some happy think bit not growth content dollar XG packaging. But is dollar see side. we different commenting a of and example, it's on because testing, more, from see we our or side, the wafer the is entire the growing slower for you content are production at from elaborate little that, saw of that the here packaging lot the like content testing, for but wafer to the managements dollar for the packaging for chip, foundry side. a are than perspective, the growing,

what is comment kind a growth packaging little of moving for dollar So about the like, - forward, you basis? as more content bit would industry can what

Tien Wu

a already difficult is the that the higher automotive, percentage packaging complaining I becoming cost is on you very I total. XG more a general, really Because That - in question. based comment believe the think the if semiconductor the in phones. the within seen are people of we've in latest

in - AIP, have will more that the don't seen have see perspective should going of the seeing seen content the my the percentage overall do as you I believe and of semiconductor is you You've But and completely be you see up. costs up. going the also I will PA heterogeneous module, you in semiconductor fast there - increase must integration, you're versus the packaging the content. the content, different. foundry, as front-end seen because return, the terms the of the believe be when things, packaging nature trend because packaging you the do But foundry versus I are believe that up complexity the investment is model going normalize business

Bruce Lu

clear wafer Yeah, see packaging it all chip not the for so it's for but for revenue smartphone from growth is is example, that the difficult but the well side. clear the side. for Because, at side us to

difficult for give can certain like it's us us, So that? you qualitative analysis for

Tien Wu

my I apology. don't have the number,

Bruce Lu

worries. No

I'm - So the sorry. next question

Tien Wu

go Yeah, ahead.

Bruce Lu

kind of impact your your of that business forecast of business fire in a serious couple one as is key question supply next kind one the chains you like the because your so customer for included key fourth of quarter? what your some impact is So Okay, of ago. customers to well? their got days What

Tien Wu

thank question. you Well, for asking that

not will still We through because comment on particular the they're incidents going the clarification.

fire for us have get are we supply the just but this that, customers important a further who is chances of scenario, are as a report. as particular and it well multiple But having get easier affected have chain for replacement where go you position, waiting said through the chain do all supply we're So like by to parity.

During we confidence revenue so of you the collaborated is last I than X%. our QX, already can two days less tell impact been has in with customers our all factored and with the have

factored the like believe the global been - customer we're in in We In we the had our our supply we - of supply alternative So today, But that everything substrate but the encounter working the situation Taiwan I can all as worse on of this first that the for hope time has scenario soon. past, manageable. situation suppliers. and this in is the disruptions. the is partner We the not route, already in. chain Today, well. complicated, pretty key is particular recover of handled much

Bruce Lu

question, for in in SiP Okay, bound chip, friendly talking and more it friendly flip environment? ASP. pricing XXXX. can was or what Does wire about testing will ASP Management is the happened which to the or about one be the our overall I squeeze only that happen situation

Tien Wu

can All friendly, friendly products answer the way much compared bound. wire best it's you. my pretty is [cross-talk] to other right, year. All I right, are apologies, the - to last that's the all more also I guess - tell

Bruce Lu

How about SiP?

Tien Wu

have particular package Same down all you products. to SiP? type, other like a cascades it in allocation it because basically are when chances an

Bruce Lu

back to you. queue. Okay, the thank I'll go

Operator

Szeho open to China is please? Go Now Ng, the ahead, Renaissance. line

Szeho Ng

question Good CapEx. Oh, regarding the is My first hi. gentlemen. afternoon,

would back will there a year's the mentioned with drop level. going That level. CapEx quite this next to sharp year's be compared a represent You XXXX

which the wonder for areas holding year? are back So investments next I just you

Tien Wu

start made XXXX, already the look If I at in ASE investment we major comment. the ramp. Well, a

we XXXX, forgot I invested. off, our a got got where we number XXXX, - I $X.X backed numbers the everybody think supercycle. were we $X.X Now In the billion. but billion,

Szeho Ng

Right.

Tien Wu

ratchet we We all you more or if less. 'XX And back other the to OSAT total, of up. spent the million go $XXX XXXX combined

more. $XXX I spent think $XXX ASE or million million

will not That's sure we - good did. early of supercycle. XXXX, we result But As dollar. to reported QX, exactly QX, days to managed I'm that are the but But when we a in not got just we in have number sure, spend. in spend we a amount another continue people why QX, QX, the even

after Now of have of technology; the basic we believe have the three of elements super the in all We cycle. we years the all place.

continue capacity But the XXXX in now and from look synergy what CapEx we perspective, we customer course, alternative look a base all that a already going automation. and last is, at capacity another expand over are do at to beyond. of is what the and the from can then a look do and in Of just have optimize can of lot we we maximize into we Also, mind how put perspective you, of the three years, place? the base

to and today, factories, as trying LiDAR to trying has of expand LiDAR of factories. and those we're So explore efficiency ASE XX the advantage

on you. helps so business things, back current these the demanding all environment reducing really can should So normal CapEx change. this. more they that more, a also supercycle that forward. level. realize need right? well between the doing based do we OSAT we're if we might probably Again, do of XXXX believe, view moderate, customers our to spend not This is of probably, not going we and we're we in to then reducing and But, we're is anymore, our just more more, But competitor our course, will If are CapEx

don't to how When curve. But invest. a we'll do continue just invest on I other are people approach. the depends mean really they it ahead you contrarian to - stay we We just investing, not of then if So invest. want

Szeho Ng

Okay, got - And you.

Joseph Tung

is little gap to up today going CapEx CapEx into XXXX about realignment. and trying that's fill we And - QX as this that, I in moderating that also, of we're retooling on year, our because upping think the bonding. exists are the overall actually a bit the wire

So overall the year it's is CapEx this original target. going exceed for to our actually

Szeho Ng

when And what heterogeneous you. got the we area? question, to to Okay, this packaging second role we are going in so go play and level,

Tien Wu

clear. I apologize, repeat first wasn't the part you're asking because about testing, you very can it

Szeho Ng

packaging? assembly, let's in packaging. when packaging or the heterogeneous advanced with approach the say about industry we replaying What are talking I'm the roles heterogeneous

Joseph Tung

to All sensors, all of that term call a everyone kinds the - what we're is is talked referring passes, heterogeneous innovations intrinsic, the right. optical will right? such different packaging the We we and And audio, For uses integration. silicon heterogeneous is about industry, the components generic functionality. it,

it's space, that Now, if audio and you in integrate to SiP we're the whether or have really packaging. the diversified look very tend we optical in building, at all space functionality consumer of products a space, it through

because different is will chips, physical So also is the is It chips it large this there it similar, And but slightly of and is put memory chips slightly and the small chips. which the chips, behavior are different very where different two functionality from why integration. chips, it's very, is mechanical, logic HIR easier do pack chips. and is but to be - chips, That's you expensive, but together. SOC the the chips approach, it or

For think and together. generically, physical, material different we intrinsically the characteristic, put size, that really you have different about packaging, different to material mechanical

referring I packaging to. what think was that's HIR

Szeho Ng

all and the helpful. And be ballpark indication be Okay, the FX? company's is part, will question last what the my may Got, you. right. sensitivity on to financial margin gross Any

Joseph Tung

point NT for impact have XX Well, ATM XX - at on will the level will margin our an side that gross be each a point holding will on a impact the such have basis but percentage appreciation - points. have of basis dollar on

Szeho Ng

right. All Okay.

thank very Okay, Thank much you Yeah. you. Joseph.

Joseph Tung

Thank you.

Operator

ask ahead, Go to Next Shu is one Roland Citigroup. from please. question

Roland Shu

Hi, good afternoon.

XX% you I backfill be and the have XX% think first talked demand question the EAR first year. of quarter all in my will been for is, your impact, a next backfilled about the

you the first demands Thank been are backfilled the in backfilled is, the delay - will to quarter So of the how you. year? confident have quarter next what for this demand kind question first next And year? the are

Tien Wu

sectors, from which from nature the sectors. of communication A Okay, customers became XX, all after entertaining the right we're that September I the given lot have capacity - the available reported. strength a of seeing we are the

done we also Now, retooling. have

retooled XX% - For been backfilled. has facility lot to bumping in can the customers example, a be serve The sectors. already capacity of other the

hacks, backfill It's we remaining of of confidence. constraint. lot because how be details capacity very we're we The we doing a is fast fast do there. XX% can a high how that have there the upgrade will can We currently retool, by end matter card, tap year the a QX in a are next of

just So busy the very our are be customers, extremely have all given the few demands - that but customer strong commitment or the case. months have trying by we a strong. indication us contract to I the them by firm this been think of either work And for will with last all of

Roland Shu

you. Understood, thank

constraints are capacity. the main these the So by

question total year-over-year. When to XQ ATM, XQ revenue TSMC your revenue combined guidance, it's your half half for low-single for look is If revenue ATM think revenue is IC I about XX% this. growing a I single ATM I the think second the IC ATM my low IC percentage up points, with and it's similar But and IC growing percentage TSMC with at second by and year-over-year, points. revenue, half I is for XX% compare UMC, go revenue especially year-over-year. And increased we your by by digit second only second UMC, digit XQ together.

year? have growth this this and second because or half because lower of constraint? of is So reasons a Or the you in other have competition this you this capacity is the

Tien Wu

talked The In impact. answer in way, dropped capacity it dropped well run The the to QX, to - I rate the it QX XX%. QX let EAR it and this was me XX%, about QX, zero.

revenue has challenge trying customer changing trying have out. timing. the And and to the to that qualification we're given the we been in also taken also that QX, in a the run And rate requirements, the quality operation capacity unit. requires complexity for we're literally XX% So real-time. compensate by - that And

the you to full-year are the compared industry. and the I if OSAT performance, overall, - So at we look reasonable think

than revenue especially SiP will we was SiP count SiP revenue, other the count the we If the of the we the of you take will the EAR revenue include effect competitor, assembly of way where material USI out, all the higher portion higher I think the unit. the that content our revenue, in

you from behind not shares the assembly a effect that one-time understand combine the but we behind. perspective, all are cause and right you when lagging we're headache, gaining now. does then The So of EAR we're - the

is that don't Technology and between is Now, I comparison. not is I TSMC UMC different, OSAT. so when comparing think directly apple-to-apple you the will the are an foundry and different, to content the compare investment

Roland Shu

OSAT the in the foundry But also in those or revenue, testing. business most UMC [uptake] I OSAT of think I highly to the for go the think correlation need especially in test the assembly - and correlate product past, the of for and to

is probably I actually think So I number, UMC's relevant? for this think

Tien Wu

up dollar Okay, half the again, in the repeat - EAR, we're the of let's U.S. 'XX excluding second terms. XX%

Roland Shu

Okay.

Tien Wu

sure the but that comparison. - of not number you And I should make exactly am can UMC you

Joseph Tung

of that's apples-to-apples Yeah, think us more UMC. and I between comparison

Roland Shu

Understood.

the how Okay, may in I utilization product ask, XQ XQ about for and lines? all

Joseph Tung

and assembly around or terms are XX%. of we In in capacity, in it QX, terms of terms testing was about plus of in XX% Yeah.

Joseph Tung

How about QX? a

Tien Wu

QX, test XX% bit - down plus. And think a will to XX% I wise, turning to will into Well from at come about remain capacity we XX%.

Roland Shu

have we reason down a for to or or? because utilization revenue go the What's test multi-interest

Joseph Tung

I impacted a ratio. think higher EAR part of the customer is the the that has - part turkey EAR impact of

Roland Shu

Understood.

Okay.

is on, had of My customers you. launching your delayed smartphone been Okay, by last one question thank its key weeks. several

next first now? we EMS your at do how seasonality So look year quarter in

Ken Hsiang

QX. EMS

Joseph Tung

kind terms for I that, a its of a overall, - to to in think think get EMS of there's quarter. I getting peak mentioned Ken delay

I a will And which be very still to relatively of a strong the think a strong one, normal so And quarter first speaking we with course is that quarter four, quarter the see to very there going all decline, comparing EMS. previous in But will as very, backdrop, pattern. a years. it all, in quarter a seasonal be

Roland Shu

the right? previous be say you will because But that seasonality, as similar years. not that of Is the

Joseph Tung

No, years. normally the very similar fourth for is off to previous will I quarter think quarter. - is seasonal coming The one strong be very movement

Ken Hsiang

that? or is about EMS Are speaking you

Roland Shu

Yeah, yeah, I specifically. am talking Yeah. about EMS

Ken Hsiang

there. have all That's we

Roland Shu

similar. so Okay,

Okay?

Joseph Tung

a be off movement of fourth quarter. abnormally but a type It strong similar coming will of strong, very

Roland Shu

Yeah, much. you you. thank thank Okay, very

Ken Hsiang

the are, Just first onto it's also there early to EMS little side on bit that, a add quarter. for

that's on much as from visibility So at typical first have see, side, on seasonality, than we improved right. for an better probably that, least the we the ATM quarter environment EMS, don't do but

Roland Shu

questions. my you. all Thank That's you. thank Okay,

Operator

one Suisse. your Abrams, question. to questions ask ask Randy Please Next Crédit is

Randy Abrams

Okay, and thank that quick maybe Actually, you. Good follow on up one afternoon. point.

project. in in coming could decline. if boost seasonal mentioned it it consumer that you it curious on? we new seasonality? And enough the incremental allow mentioned product in factor should when comes I'm You that when early SiP material just you beyond because is is But just

Joseph Tung

having we a think as well very both are volume new overall SiP projects. - in of we're I attending year terms as strong for

continue dollar momentum $XXX out say than more new and target that million set to to that. will And well year the any of numerical strong. of to forward. some it going projects year. to not point, we this sense be revenue numbers of have overall new we although be gain target we to are in project giving think think this remains we continues That engage momentum, triple or incremental seems a a we strong, will in I any the It be I at

Randy Abrams

you still year? mid-term, existing project there's but a like million, I expansion, also your guess source into And you see and second coming view risk stage, on at pipeline next that guess, questions momentum competition this initial great. been on pipeline, target and of Okay, $XXX how if I lot see

Tien Wu

of we I the product the will more customer oriented, nature like naturally, second becomes have have when will think source. And the a electronic think volume just I the a to And industry. always - that's

customer can So with. indicators, that we I started give first, you major on SiP the two if

our now customer We with albeit that we the and have SiP overall revenue given. been we particular results that growing reporting aren't had

today million $XXX major is and dollars. exceed can than have $XXX other day year, projects, struggling have a reporting, to meaningful indicator enable looking million with the And with we we last customers, the eight how fast we And revenue U.S. been XX second at are of other we The million like XXX in we this We're this with range year. would one one. customers since revenue.

the target. slightly think I ahead of we're

XXXX That how in continue we beyond, front, one. explore the all the as in with forward to we including and ideas challenge. customers? more new projects, going grow customers revenue? can new we to Now a How But that remains do SiP enable be original

Randy Abrams

a to clarify, but mean that's great so I $XXX Okay. million last year.

I this see you $XXX over million billion? I clarify wanted year $XXX that. to to just get So added if

Tien Wu

right. That's

Randy Abrams

it. got Okay,

Tien Wu

is That it.

Randy Abrams

if ask I of more back you're second it the but be wire I gets question may, industry Okay. seem on that goes that major because open you're to up that's based, a that to guess how wire shortage. wire much now? But to few so because XX% guess, adding? the I large bonding, And the are could applications fast XX% a maybe bonders much short. that how because shortage into there the overbooking, within of so applications growing a if sense a you bonding question, right already such broad contributing give a And this assessing demand to you're want is to on little doesn't

Tien Wu

constraint, Well a if When to share. you understand understand of will their nature industry. and in people secure try the the come law, everybody the there's capacity is this

in Having that, the of multiple talking pretty a kind right we're in. all - telling really much that the getting I'm not calls customer built commitment, capacity naturally now about overbooking the not are phone said there's total I asking that you're for us we're about situations, pushing forecast line and or exaggeration In upside. can't is situations. the are overbooking if that of me, about the we down of the demand have How XX% you, question. gap. overbooking? But sure place, So install to I'm have we answer capacity when versus

down is sure line much impact So the our we otherwise line is understand job absolutely down there's no to situation greater. and make the

cycle, XX%, based year, real on fast XX% of excess to all a market, to that portion So do out the of then And needs ASP. that's through compensate based based XX%. sell the meaningful get And not real. how gap gap. product indeed you XX%? tooling, out, on we adjustments of bond gone will you next friendly all historical, And more take line of to today, lead when know. delivery I the wire in look that balance, a because the that's the it's and based talk But that people view would and the shortage XX%? not That wait meaningful QX to is that it through we the until real. gap, level. the of the What level is end is about other take we've of that whether can is on least with XX% will believe all But the all on XX%, demand take my at environment how another capacity or at or XX%, long portion

can it's little get a everyone's things a take time But line right fighting to we to where it for balance of more see the situation However, clear. now clearly capacity. will physical amount a

Randy Abrams

where at you to get I it Okay. range. is And like the year, if have fourth you next full missed the but year? Maybe a the add follow up I this to And have think that, this do like quarter the stage? you year expect range to bonders got you

Tien Wu

you it Can say you. lost again? I'm sorry, I

Randy Abrams

I fourth in Oh, quarter bonders yeah, year on where many mentioned up end I because so to how CapEx? was pulling you're the add? - you this year of you'll was then curious, CapEx plan And you do this spend,

Joseph Tung

or year about $XXX it. above close and this Our will million that think roughly it was to $X.X I overall last be billion year CapEx

Randy Abrams

Okay.

Okay, and sheet. ask want if question other then on just I to one the balance

sheet. that raising balance about target, calls a think there dividends, I monetization? you talked ago you a monetizing think about talked I is meeting within couple

of need if any any do? other curious fundraising part to have that's I'm you type where So efforts, of or you

Joseph Tung

any further for on But the of, last I - - need situation have the have route. flow to still monetizing believe that go is will year. improve - we cash we not that terms that that, that depends We're some having said if But any one it will of fundraising. in really plans next assets don't we greatly of our options it to

Randy Abrams

great. Okay,

thanks lot. and a great Okay,

Joseph Tung

you. Thank

Operator

is in Hsu Next Securities. Daiwa Rick from line

Rick Hsu

afternoon, Rick, good for thank Hi, questions. Yeah. guys. taking This my you is

strong the you demand bonding? what you question strong. terms wire that your demand wire applications in ready are of demand guys bonding for kind say key first elaborate in very driving that is which the the So more Can bit and a on is drivers little product of

Tien Wu

strength I will seeing sectors. examples. wire you few we almost a are give Well for And the all bond

three standard, when is the like four a in wire or when on in use wires, now XA guess XA We add will two another industry, the example For the right? you the the copper even that all deal plus, inevitably expensive And can is more WiFi. WiFi to becoming way new the or they're single-chip very and there's with just like adding require WiFi used - wire chips. easiest I becomes WiFi right chips claimed Now now everybody do or notion bonds. WiFi gold X or die though copper they and

becomes to die, XXXX different. wire space, this. loop, the pitch, want driving, guys, - how to also people stacked the the issue we're Analog do infotainment the the automotive the RF traceability fine a quality it do we wire the can based in becomes goes range, into when The WiFi many going on quality short So really autonomous requirements automotive,

has ASE we obviously was some that many I of and I using how about base, lines multiple stacked die. is to And ramp the more up talking issue. based can was not the input, the ASE mainly industry, was mostly preferred or customer an the wire readily. gap, because qualify on devices, a to we XX% referring because they So supplier, When been have copper that referring only becomes do XX%, to I

also original bond analysis. wire of fully traceable, oriented algorithm reporting, of bonding. also factory its is data And the have we kind, which where we the wire We do IP have the copper on LiDAR first a also can the in terms

type So, favor the automotive this to bonds. and of medical wire customers tend

the bonds, in pretty I'm we upgrade Given - there's going demand I the cycle result autonomous as product which the we're it's because the booking range. driving the we're automotive But And upgrades, quality seen mainly And seeing end have lot as the complexity somewhere before. having increase the upgrade is think wire demand of increase. requirements, cycles, into that's of a not in well this along and where double and also and XG also line. sure sudden WiFi the

stay COVID-XX. COVID-XX. are So because there's demand. a a change, there's in also at People or as efficiency. when I a commented home, buy a tend now WiFi behavior no I TV, newness lot a home for you I virus believe you can better longer really the IT of attack. the on digital little of Because of reduce think product only better if risk to you any you bit look a And COVID-XX any system, stay kind more.

And premium, it those very are expand. Now And the people's people to product be this will last is change the I But IT behavior behavior and And young that think heard going not products. to I old a buying premium in tends here seen of very, a before. this from are subsiding, regard, I've because even while. is buy very that Also IT people have longer. willingness to COVID-XX think much COVID-XX at age for a with the different. we behavior

Rick Hsu

right. All

second they right? customers you the back-end revenue mainly and think still I question that's bank, guys. your that to very a because this and the I with ATM - look hit a if QX industry, “growth.” And for my a guys revenue already revenue between second from to founders so the very do guidance be QX. more down about whether talking by the math risk will If this UMC I would that's front-end I that through TSMC, if and So your if than your the try wonder at combined, saw digit the inventory reported is mean yeah, and I Okay are comprehensive be question. build case, the guidance, safer around And guidance is die mid-single much. the disconnect bank. the answers. revenue foundry helpful correctly, I think the So Thank relative quarter-on-quarter, you you goes ATM who

Tien Wu

in is, what that. telling XX% the gone. not QX the will I'm affects my QX is EAR revenue on I in comment you XX%, But

Rick Hsu

Right.

Tien Wu

XX% So back. work minus, we are our recovering way based on

the this with we're is have last if comparable. EAR. right? Unfortunately, will we So about for talk that, real growth, about we time, there this think the talk not anymore, to Now exclude you QX right? I But

Joseph Tung

also EAR I on after that improvement side, is we Okay, us, think behind QX, margin QX. see margin in further think I the the issue will in they

Rick Hsu

much. very you Right, thank

Joseph Tung

Yeah.

Rick Hsu

ASP off will think also reflecting will I And be And completed. surprise. and the be be I a QX that pleasant think would write environment the partially

for very of optimistic been us. So the all - we're so year nine resetting honestly, very, has of about QX this the months first painful in because the

Rick Hsu

have. again. much so you. this you is thank Thank And all right, All Okay. I

Operator

CLSA. have we Sebastian Next, of Hou, question

Sebastian Hou

Thank earlier? wire due much the friendly is you, pricing about costs is question gentlemen, is under-supply the on higher of my reflect sorry material pricing not for the how you this curious environment it's taking situation? to questions. outlook, first bonding. that to of much My How - pricing, pricing the actually have for mentioned on I'm simply that the outlook,

Tien Wu

you And And value the if in discussion, customer cover is assembly portfolio. the And recalibration way, able both. think you it have a we to percentage, I to call of or now you by recall, XXXX both. they're the I our 'XX, was tell be But won't give a different. can add. you, the each the costs only material versus I

the the of not return SiP sort kind generating we of dropped and of Some that. was

at also that is bond, plan, have engagement distance a QX we through in QX, are effect, a that longer next this wire overall going exercise have, for year. plan want through we capacity better it. actually business type not is a think want of the what But plan? do engagement of similar But going type to based But long-term influence the we exercise as well great that the we to a have as opportunity look and through. to I we're see for we will this going we're us too. engagement profile, the customer anyway, on and as What return

Sebastian Hou

Okay.

by note the So higher the will of to transferring be negotiation, that margin is pricing some so that accretive costs, under-supply onwards, right? at well some QX from will be on of benefit cost customers, the to net-net,

Tien Wu

correct. That's

Sebastian Hou

Okay.

Joseph Tung

QX a you the give what percentage can quantitative. percentage that we is at. better of in in guidance terms hopefully the And Well,

Sebastian Hou

that you if Follow remember what - wire remind Thank gap? on time is to, can under the you such us big okay. when bonding Okay, is a when's you. last supply had

Joseph Tung

XXXX. Year

Sebastian Hou

The Okay. YXK?

Joseph Tung

Yes.

Sebastian Hou

right. All Okay.

Joseph Tung

than But this time worse it's XXXX.

Sebastian Hou

the but long would would of in background, terms How also different compare, I you this overbooking you of based do so but estimate? customer's and mix Right, you? applications different do how is compare think on last customer about are will this? think best your the behaviors story how that you part And how how

Tien Wu

IBM that captive environment. ASE question. dollars. sure year was a X to interesting time billion it's you're you me how strong that than this right, was in asking at revenue the to time much have for answer. do very XXXX, not that U.S have you All I'm less But remember

has installment increased improved environment. In last to XXXX compared years. billion plus. ATM from $X percentage $X much the today's smaller position the XX Our greatly was ASE's billion in base to outsourcing

installment over now right believe are base its XX%. Our I In bound. way wire the outsourcing market,

believe XX% percentage, OSAT imbalance as scenario. it something is capacity basis, always versus today - I that I'm the always a ASE loaded I XX% short are as about something, today year different get constraint, by short Chances so year that is fully when global talk But I other did. XXXX, first. short else. I I how the demand much the, XXXX means exactly means in get sure, I'm they're don't supply the not the quite a by On is in if also

going quality, few of last years, end get competitiveness, up also your right, long-term to always accommodate you is and and has the guys business product back can under but down, of all Over loading customers. with the other filled to even will been liability situation got capacity go complexity, my when respect In the kind to full. this situation, quite you

ramp investment reliable, it, all to believe come at of terms business who's People the So into look got also pipeline, somebody I will this do who's play. products. new to should want highly who appetite, need got R&D up has they

a of the I And an the do wire because because Devices. we're believe because the there for the bound, car. of of upward electric So seeing is cycle Analog of lot XG, WiFi, now

the at talking And the And is of going matter fundamentally a inch. mean, different something route. wafer ASP X-inch adjustment will I are fact on about that understand the if demand fact, that route. the look there's through people you As this you

Sebastian Hou

they - on a on that's wafer, you equipment side, secondhand concern, any sharing the have what wire bondings? their And But capacity? think similar it. or Got about availability, X-inch I the on constraints constraint issue? that's that. do significant the the we the see have but given the very Do supply a insightful not supply

Tien Wu

the line six Well talk bonder component why will least wire it months you said comfortable that you where line, That's equipment, balance, this and of - talk will kind more of will have that other the getting when the of rationally. of I level is capacity why become ramping bond bonder also to a more the line people of to terms wire But bottleneck. I what becomes that's the about consists take vendors lot wire in a instrument. this only And at very and detail go not throughput be slow. the of are industry into up involved. one But

in helping such adding to a So accelerated an us in the not way level. it base. capacity is of all water regulate We're actually

build to the in sanity. a whole the think regulator supply has industry buffer, I chain in intrinsically, the

in the portion. really the I I a ASE bond But also of wire and this way everybody. is is are bottleneck playing And part is we with think another a substrate Unfortunately is capacity in helping think bottleneck. a bottleneck.

So right back-end. actually the there are multiple bottlenecks for now

So we'll is this see heading this let's how - is to. see

Sebastian Hou

focus The geared and just questions for testing of me toward is a side. side. expansion the heavily the Got CapEx last year; small on very think CapEx beginning the remember I the at it. I was Thank you. compound question

is into more going by given year, that EAR customers. testing the affected utilization next and rate So our affected

year, So will we, mix fair assembly? next it's in the that can gear to towards assume

Tien Wu

customers other right I early hard we those to testers working to convert the we of for are are because that say too it's Now now. very think

us give Just another quarter.

Sebastian Hou

it's Okay, fair.

Operator

Hariharan, ask to is Next JPMorgan. question one Gokul

Gokul Hariharan

for Yeah. follow up. taking my And thanks

Just on on question testing to follow side. the Seb's

ongoing third sixth, one customers, you was turkey affected EAR who one what the are a think long-term to one talk increase bit list you to in one from now Dr. or what customers getting let's any third Obviously, one indicated change from And about in terms test that to so the one turnkey sixth, of say, what feedback fifth you bit had for if test the revenues those test ATM turn you --get what goal timeline little the one ratio also key expand test business? customer previously, in are customers to kind right your and the the terms And ASE? ratio? of is turkey of say - initial get Wu biggest to a talk plan that the at or of your that I third. could of could could also more total you you to the increase which efforts is little of are is by using

Tien Wu

You know, level. major a a testing group the remains to initiative be at

So painful choice. but have we setback. we a we very little accept that, understand And that very is there

doesn't However, of want we alter as our that part that turnkey the to our overall percentage, percentage, our revenue well strategy as increase portfolio. as test

capacity us better leverage. a So it is helps now, because to the us of right short offer assembly

propose, do talk through platform go even increase have lot operation. a that EAR we for we platform, like setback. short-term giving perform to and be Then it our ratio, our a but initiative in is The revenue we us our we we naturally right? to when time, turnkey the need to some customer, testing test And remains to will to existing assembly test them. major test have we also So to or different of

Gokul Hariharan

a target, five-year three-year would like target? Any reach timeline on target? Is that a when you

Tien Wu

was a occupies a kind that was packaging test that occupies of third thirds, one concept. never target, a theoretical normal that's just Look, just and two turnkey really

Gokul Hariharan

Okay. Thank you.

Tien Wu

You're me to hint. good a to going of a target, now top yes. I'm have and need go my Well, back giving team we to the

Gokul Hariharan

Thank you. right. That's

Operator

we Goldman Next Sachs. Bruce on, have from

Bruce Lu

question packaging. gear for the switch the want to advanced for I

So to revenue if growth you look at corporate the somehow similar is the advanced your average. packaging,

year. is the other that reporting hand, TSMC business this growing their by plus XX packaging percent On is

share. are they gaining market obviously So

what you rate your do about What then? think your we expect outlook kind growth can of for future So growth advanced packaging?

Tien Wu

it all apology happy is, and of happy of make TSMC is growing part right? business, really that packaging microprocessor. of now the all think the memory market. of never you. available focus memory I first - part edge the part be a on is Intel we - service - important is as well role therefore, completely first Okay, to TSMC would clarification market, is is I have Intel that If most to the In to business market. with and same microprocessor we captive OSAT market Intel the I'm se. for I'm out. to captive, packaging growing captive but as it of the their like I My that is order a have that TSMC just elongated do all because service, a me If this part we as of this lithography leading will microprocessor the market; answer, is wanted same for OSAT qualify this to central speak Yes, central captured, I Many is. not is per now what really our OSAT. need not understand the question not really situations. category in three attack assembly this to business clarify our OSAT the ask packaging is people revenue,

year, will which grow. next revenue and update more overall the more continues you packaging give I Now clarifications, to

value will said, we and as continue to already test grows, grow. packaging semiconductor As the

division the captive value packaging and the and talking value-added attrition is another But this, versus compete. the about However, That have would said They having merit IBM vertical you service. between OSAT, the service now, way has based do payer fragmented, that revenue, we're the outsource, efficiency. on changed. never test revenue

everything cannot look trying does to understand what is understand that this engagement versus of How the dissect of business, the business of will much interposer model, have contribution Then that of the versus overall the silicon really the How test revenue do, of you is They that only that OSAT versus detail. some versus much part silicon we You particular do. not content. we material you value-add value-add just is is versus our much at out How will to assembly memory? based? and not contribution all is that else? it

Bruce Lu

the sometimes was a OSAT borderline the that you be can know would from the technologies mature, market certain that Can that, by I be the for be we used the like there foundry? would also so the technology wave to you when Ken Can that? node, expect a the clear market market mentioning about OSAT foundry. where but tell Or second business, will captive talk at about can which do for is of they will at us captive know when we do business this,

Tien Wu

for foundry. lithography about You Intel long When market, outsource remember would I when memory. a talking we division, central mean, when microprocessor. in the OSAT? clear know, advanced graphics, had microprocessors in OSAT? the which either had will the had either same XX becomes the Intel central become that do have which conversation do we're conversation I go that this line I the OSAT or as as chat memory we their you about I about now know the think whatever will view conversation I node, wafer, might that the to years, But captive. you market. finally, about don't And we similar become to not Intel And do a OSAT memory to think will all think go

the OSAT the whether content, value-added at could to You versus material But all material content look at of the foundry and you have still content could do content. it need it the do still cheaper. cheaper it, look to or value-added

So question fundamental for captive business decide foundry pieces, once all which understand IBM, suitable me, a coming very for then it's and couldn't the we talk of you hours can conversation. interesting for is We suitable about understand the where details I all more business for markets? I question asks business this To is not this for OSAT, suited from. but which can me really confused get which everybody because same is

Bruce Lu

I the asking are time. people think and complicated. every question very That's answer why

quantitative for investor So the easier the can for which make market coming I the [diverse]. at with could mean, least is maybe come two somehow to like the years, addressable understand. We up you

Tien Wu

Okay, something. we prepare it. about so I Yeah, am should happy

Thank Okay. you.

Bruce Lu

you. Thank

Ken Hsiang

the at Okay, I of the call. end conference think we're

some have call. Let me up up what this we of

had third I And good improved situation into think, seeing first we QX. of a are quarter. getting we all,

continues and friendly in pricing is us, to environment. be we largely are behind EAR strong that a business Now

reflected lowering few going Over in synergy to That created in heavy us our we we forward. call for improving and have improving investment. better as years, concludes being you XXXX growth Thank conference OpEx We're a that CapEx And much. making standing cash optimistic, whatever We and will the a today. pretty and margin been going opportunity puts capture you forward. ratio. past remain position the Thank see flow business financial our seeing very prospects

ASE Technology Holding (ASX) 30 Oct 202020 Q3 Earnings call transcript