3711.TW - Earnings call transcript Q3 2022 | 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 2022 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 in participants their questions voices via All do consent, participants If not this time. please disconnect at would everyone may I remind presentation to follows that that contain the statements. forward-looking like are statements actual our differ risk, may forward-looking high degree subject These results of materially. and a to

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

from Taiwan results financials GAAP. IFRS. company, ATM other subsidiary As our are may appear been presented have differ accordance our IFRS a during EMS and including materially presented Results Intercompany standards, within consolidation, with using using accounting our by those but Taiwan Taiwan-based unit in business businesses eliminated transactions presented between Chinese using results.

by joined our For I Joseph today's am CFO. Tung, call,

over we I that financial Inc.'s off will during call, outlook, Joseph answer go reminder, available session China the at Q&A end the a and disposed will be as of results to XXXX. questions the ASC sites Also our follows. During

our basis believe For included give pro already China We here, a had our forma to pro which the on information we comparability addition forma entity sites in results, our additional providing financial as of legal meaningful of ASE have if occurred. disposition assist Inc.'s results results information, would the or financial presented in results.

forma entity will consolidated and For entity X, quarter the legal Page purposes year-over-year pro with third third and find quarter ATM discuss company Please sequentially comparisons. pro of our quarter will results with where XXXX. full we to forma this quarter and results, legal presentation, compared our turn basis compared second you results generally third with

revenue EPS Consolidated of XX.X%. NT$XX fully and we of of diluted quarter, We NT$X.XX billion had net and third profit of basic XX% EPS a with margin gross year-over-year. XX% the gross sequentially a recorded NT$X.XX. increased For

to higher businesses. and percentage by conditions annual declined in offset decreases EMS margin attributable part by X.X our sequential and business X.X favorable points EMS margin ATM year-over-year. were points and The mix primarily gross sequentially currency Our percentage within

Our to both profit-sharing as operating On the year-over-year ATM new result expenses expenses EMS our NT$X.X from during or sequentially basis, higher and during the in billion primarily R&D and of scale of billion, with businesses. quarter. increased third higher NT$X.X quarter increased a NPIs, a expenses by product our billion, increase expenses the by operating of introductions NT$XX.X mainly

was annual a percentage percentage Operating X.X%. Our declined operating percentage result basis, NT$XX.X percentage was higher on an sequentially. declining to operating as billion NT$X.X up percentage X.X margin annual expense from a billion X.X%. points an sequentially NT$X.X were result Operating operating operating point achieved X.X increased of leverage declined expense percentage operating XX.X%, margin leverage. in billion, as X sequentially Operating of points and basis expense created. On our Improvements profit year-over-year.

floating quarter, from billion. NT$X.X higher expense a offset had included billion loss. foreign full interest net During non-operating Interest amount the of activities hedging as a Tax our third the rate our borrowing dividend the was rate the during debt distribution expense quarter on after result rates XX.X%. quarter. tax for and NT$X of was higher we net in net NT$X is exchange interest effective The quarter expense by This higher billion. gain for our

impact to XX%. a percentage fluctuation The margin. our billion quarter dollar the sequentially a we currency year fourth closer effective to year-over-year. to We that tax beneficial Net We the for and had quarter. income was estimate point rate margin. NT$XX.X year-over-year representing impact billion, point had improvement rate a of taper being gross now a against NT Chinese during during expect U.S. company and tax perspective, strengthened we dollar positive quarter. NT$X.X the expect fluctuation third the holding yuan NT$X.X the From down estimate currency gross an to Sequentially, X.X billion the X.X that full percentage

revenue. gross businesses XX.X%. relative bottom with the of NT$XX.X XX.X% Despite margin operating company overall of be and appearing would NT$XX.X The profit our profit provide overall be of Consolidated inclusion the revenue, and a fluctuates business legal improved somewhat business is billion the we NT$XX.X the performance. entity our NT$X.XX. excluding at financial our with On would delivered consolidated and of the our EMS ATM Page each PPA billion graphical On be the Page page, level Net gross we X.X%. on profitability X Operating profit increased performance a company with operating mix items of at without ATM profit with The is forma P&L EMS gross would margin down, EPS, of key revenues record On margin. scale. presentation X units. holding historical line ATM environment of basis. Basic with to to billion have net margin a in of generally still of expenses, would the expenses. slow line with business PPA-related P&L and be results pro an the a

products Customer downside, to and to remained third either did U.S. the achievement major on stronger the future We quarter strong strong the material to Overall, communications, line quarters see was relatively were be were surprises during forecast with quarter. a demand quarter. adjustments or advanced relatively dynamic. despite and revenues quarter, relatively ongoing in dollar our upside not inventory for good the more the although demand automotive our during also with forecast our networking digestion. leading Certain outlook. basis, products, content. business original services During higher Capacities and for tight SiP ATM our performed for continued during

have macro ATM impact environment On pass-through to These are been customers. by sold, business, various side noting depreciation In higher somewhat some rates. of goods of see bills local of to related offset particular, rising higher impacts cost a largely costs and as our our our costs inflationary the pricing situations. anticipated, currency relating energy we labor including unfavorable to expense continued to material, on various cost we and

year-over-year sequentially NT$XX.X business the quarter, third up the NT$XX.X X% and same for for billion business last ATM a increase attributable percentage points billion product XX.X%, billion, The raw year-over-year. business NT impact up and mix previous the For benefits depreciation, sequentially billion the ATM dollar profit billion, gross margins raw and to NT$X.X material record primarily scale a represents NT$X.X XX% flat NT$X.X were business costs. quarter revenues by our our due margin material The from Gross higher up a and a and other This gross mix for year-over-year. utility from offsetting NT$X.X our profit was negative period up higher of sequentially increase billion NT Gross sequential X.X higher year. in the and profit up depreciation, and offset effect were to flat year-over-year. primarily increases ATM margin was improvement dollar manufacturing costs. of was product

During the third billion billion quarter, billion, operating and NT$X.X NT$XX.X expenses up sequentially year-over-year. were NT$X.X

expense targets. flat points driven by sequentially percentage X.X year-over-year. profitability percentage expenses XX.X%, and achieving was Our and higher higher The from profit-sharing up operating salary increase was

the were The wire X the On and the representation up market movements the others. by seasonality quarter, bond margin had that percentages year-over-year. compared to of with profit Page NT the profit advanced positive forma positive the were packaging would a be to Without small displayed sequential X in packaging of Operating our wire forma and Service of with percentage on U.S. as decrease relatively representing category. you'll would ATM quarter-over-quarter segments other type of Seasonal point softness XX.X%. production profit type. Operating year-over-year and During be and our quarter, had results And segment RF within amortization, impact billion X.X gross automotive, here, percentage and depreciating others. X.X X, segment. relatively On The dollar giving an with in advanced and NT$XX.X On materials X.X Page each against in a to point On pro billion percentage automotive compounded X pro impact margins. point improvement points percentage flat forma PPA-related revenue NT$X.X bonding, not of and find we X, sequentially though communications strengthening is ATM businesses, will billion, our a increase basis, see NT$X P&L. of our to is a margin pro led business. an service can Page our our margin On was margins. year-over-year. percentage segments. XX%. separately and continues unchanged U.S. the outgrow Page consumer ATM graphical was dollar you ATM it market point estimate stable each by dollar our you EMS market percentage percentage third a depreciation previous impact find ATM XX.X%, operating with increase module X, quarter third the

During demand any a traditional earlier Customers the an measure proactive have against disruptions. previous by stronger-than-expected manufacturing than services. when both anticipated, in and was quarter, general have compared with higher our loading products produce EMS may supply stronger for believe and unforeseen the We earlier preventive demand some to as driven SiP been cycle year. chain

costs causing current of raw and EMS improvements the short-term dollar relative by the profitability, strength quarter. were scale increased In U.S. during terms recorded in quarter RMB the the manufacturing material of of driven to reductions

to revenues increased NT$XX.X reaching X.X U.S. X.X% gross billion improved as billion business margins XX% and increased points The EMS improved our points the we or of Revenues primarily of higher-than-expected sequentially expected, EMS During NT$XX.X during EMS SiP percentage gross against business. where were X.X or the quarter, for profitability XX% weakening and result margin ahead by somewhat operating XX.X% dollar third quarter. percentage and year-over-year. increasing traditional Overall, margin. with the RMB a

seasonality application. here generally bottom consumer communications a XX, billion. peaking cash, of you the Page other cash the the equivalents will underlying movements our and half declining. of balance will page, find On revenue line items quarter, NT$XX financial with of had by graphical end we and Application and in the On our of from assets with product EMS representation At find key you sheet. current applications are line

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

Our EBITDA was was debt Net for equity billion. quarter XX%. the to NT$XX.X

equipment dollars the will in operations, totaled in $XX capital $XX expenditures. and dividend million $XXX and test which during operations in were made quarter, our percentage. others. capital expenditures payment XX, of EMS and Machinery and operations to Page in equipment equity in On $XXX operations, third you million material $XXX for find million quarter net third annual million used resulting debt packaging interconnect U.S. million, in was Our the higher

company. the EBITDA our U.S. EBITDA a company's serves metric We the in that financial believe continue performance to We a as dollars relative reference. CapEx to for our provide here as equipment key

EBITDA the $X.X For was billion. quarter,

like U.S. Looking forward, the EAR. first at by impact few ASC devices this We, are serviced the U.S. time, recently recent of indicated the we relatively would potential to specifications fit in issued currently the that that address rules. believe

such, assess our customers be with Nevertheless, continue may As do not there such a believe this to at future time, to we material will thresholds. impact. closely financial work cross we to that products

times regards the ongoing believe we Second, world. in to was supply mentioned the volatile COVID they Dr. and in a manufacturing call, in to to Tien as our throughout unusually Wu also with the environment, of not created Unexpected order had our demand deal be industry unprecedented an inventory commitments. only situation. COO, correction. compounded lead continues products, business order needed to state previous complicated earlier more spread instability chain quarter's supply with The as longer Companies

higher As production phenomenon inventory end This to throughout of rates. of the level previously manufacturing the have appears XXXX at continued early XXXX, signs chain. established cooling began a of towards created semiconductor into

up the they inventory light framework world risk same reset industry In now choosing digestion. as of to adapts lower overall that down customers for inventory. This bring the more most current society, to to to looks COVID a level of an to and environment. inventory inventory, the manufacturing is are a Now adjust bring look demand our softening normalized back semiconductor endemic of industry the to the

ASE? we with our inventory that relatively but looking remain customers a movements policies anti-inflationary the are on forecasts the XXXX. And are experiencing impact cycle controlled. be as adjusting between we educated don't be this what have environment. will look see with the demand. We products half be to continuing stretch upcoming reduction but based the once we issues an upon balance, inventory in Even forecast environment For will Despite very the and over? to to some beyond what the differences course, generally be, interesting guess impact the can quarter, that into first see ask additional dampening would magic fourth We demand. previous level do volatility take period down it's X quarter, a of also There ball, softening fourth potential will Of have strong, customer crystal overall balance digestion downward, on of question one. believe product recessions the an versus

offerings and environment. a our been soft has even combination capability service increases pricing foremost, and our First in with completed. SPIL This our

Second, we that over our have ASC demonstrated prefer competition. customers

As scale a we form of the a size result, are gain comes so pure of we cost We ATM downturn. lower advantages estimate sizable in more to and competitor. in With and even and scale yield. our share that in the business roughly competitive nearest continue Xx advantages better a

are markets. outgrow how competitive technologies ATM These have semiconductor result, we necessarily products at position a to have encouraging are early density. point, increasing Even competitive these becoming we now But margins we structural developing advanced continue see next we our peaking between with From and with rethink will competition. our to current to logic in historically ASE our in cycle, forecasts cycles being see that mid-XX%s and developments prove our their not methodology recent not this we outperform if XX%. to continue processes down a guess we customers as flattish our belief unique the strategic the competition. a to as our factors the manufacturing though but ASE of from perspective, been the shaped, and position It's a assessment understand wish we for to lifted that believe in And with do future mainstream transistor we ahead seasonally soft, year, lead one, paired to Though we integration, us. heterogeneous believe firm. XX% part resiliency. we year deliver ever. for were a designed. been is from between XX% information, newly in to the most be value are us now given to that particularly can prospects industry's do definitely packaging additional are annual can Third, demonstrate are troughing customer reiterate opportunity somewhat we the in profitability of to

trying are our provide transparency and As simplify methodology the to a note, we improve to used quarterly outlook.

in this changes exchange change in provide exchange way few quarter. of our XX.X% exchange dollar NT mind, the fourth dollar a with rates U.S. using XX.X% rate dollar and Part the follows. we our made have With provide in as We rate the from includes figures the NT to outlook. we going third applicable assumptions. those in outlook We see quarter

XXXX ATM slightly quarter our business business be dollar For this fourth our should NT quarter levels terms, below in ATM second year. levels

second ATM our reference, billion. a were As quarter revenues NT$XX.X

margin gross fourth should gross quarter be XXXX first ATM below margin. Our quarter XXXX slightly

margin our first XXXX reference, was XX.X%. gross a As quarter

dollar year. NT levels in above slightly our third this should be XXXX quarter business business terms, quarter EMS levels our For EMS fourth

were reference, revenues quarter a third our billion. NT$XX.X As EMS

margin to the Our EMS last quarter close year. XXXX should in operating operating the margin same fourth be period

quarter reference, XXXX was As start a session our We Thank operating Q&A you. fourth margin can now. our X.X%.

Operator

Instructions] we Credit Now Randy Abrams a [Operator from have question Suisse. Mr. of

Randy Abrams

Yes.

looks third It first down of CapEx the actually quarter. Could acknowledgment bit talk ask, on slowdown. a you I like outlook? about the Okay, it your slowed the question to wanted for you

quarters, advanced or relatively and advanced still the If a to you the and 'XX you expect could give than technology, that, better mature some had slow come wire a latest you seeing for to into then whether start do to And holding see, strength coming of then 'XX? better bonding? up utilization on view how that within you're you've in also

Joseph Tung

this I down will bit, year's Yes, think a for roughly CapEx, little around we bring this XX%.

the For next spending outlook, process year, will and in still decide much overall will how formulating for of year. the we next we we're be

pretty range and test into with and the tight we assembly X, both will the XX%. to going for XX% capacity than utilization to tests, continue from think wire with But bonding. XX% overall fourth, slightly both I advanced terms assembly quarter in higher of have over In utilization packaging utilization

Randy Abrams

second going to the a give ask, more to detail get to in wanted -- -- being I I to guess margins, a more the quarter looks back sales dip actually, favorable. bit currency question guidance, And like then so despite level, could the a if your I'm to where you bit okay, about it's back going it first implies QX,

you that think about whether competitive shaping up? And if are it pressure, little then that, how you that's a decline customer then talk there? -- on be a should a better margin, the but trend you factor So seeing how bigger bit also environment, and driving could pricing just the what's mentioned just pressure, how I

Joseph Tung

the overall think expect I pricing a be that quarter, into still in pricing going to next And the remains Well, I negotiation to year. although fourth think do around stable. going be normal back there will we

of course, to our In will there the utilization quarter overall – of and terms of because come I a the and of X, down is is the some determining be think, bit. into be loading really factor margin, the going in going volume softness will margin terms

So into the because we’re think a as loading. we had macro to it quarter really b–ter – X, mentioned higher Ie I that impact. higher the developing we differences are entering we will I looking Loading some structure, at, our earlier, situations prospects to we in a cost environment margin be certainly are X, going And of facing. also, reflects the think the have In quarter continues high. the margin But margin cost

Operator

Sunny Ms. of Lin from is question Next Sunny? UBS.

Sunny Lin

you hear can me? Hi,

Operator

Yes.

Sunny Lin

things is any but initial the seasonality to going quickly, expectation your still moving question we half pretty understand about be on get think first how thoughts will XXXX. first appreciated? I my are to So should

Joseph Tung

to normal Like guidance giving to the there's seasonality, lot we the see front we're play. in any a normal in first revenue. lot should we yet. looking that first seasonality drop in us, a not going quarter, at of the comes of typically, the for And a quarter into XX% and say -- in are uncertainties past, under X% What be said, still factor a is, can of out we we

Sunny Lin

But are second Got consumer, we the the demand guess question at the if my to I for about environment uncertainties. early to relatively still it. stable. we increasing going second the industrial you recent the half from regarding year, would the XXXX? Then think in of sustainability look automotive, hear is, started how supply chain weeks,

just slow wanted also So you to XXXX? IBM your the here. get down And to expect thoughts would somewhat going to outsourcing also,

Joseph Tung

I anybody year. as estimate think different that, facing the that at our us. it’s, the we’re front industry from are competitors. a also we should a confident for looking remain and we we the our And And whole the be our not uncertainties in of same flattish will position, that best outperform year given in else we the is industry

quarter, continue imposed the the will automotive inventory the continue the half remains will seen. that restrictions think be to remains in and year. first of I U.S., networking first be into same I the think than that the industry – the Going pattern next new by I sectors. the also to other the think And performing stronger And digestion

monitoring be of parts a us, of closely will front and are the we moving lot there situation. in So

Operator

questions. Baya Our from Baya? question company please Rick is Hsu. before name next state Baya, is Kumar. question next from your Our your

Rick Hsu

Yes, can me? you hear guys

Operator

Yes.

Rick Hsu

Okay.

Does IC, to flattish total the mean question semiconductor total for that global industry business you to your you're year just the the business next -- or one ATM when market? I wanted said, looking XXXX. kind Just total of or Joseph. clarify,

Joseph Tung

ourselves. No, no, talking about we're

actually but else we're to our -- particularly estimates, And market that the maintaining a confident expansion given accelerate returns at is that down everybody I at flattish downward should And overall market next market the best ATM position that there. look year. is another business. factor in share still outcompete think of leading idea forecast, our the looking softer situation, we we're from that in we general year for a believe ourselves our terms least a in situation and our at our -- customer will and

Rick Hsu

Right.

Okay.

your Just one the us year? us direction? semiconductor on market or more global about some a give color quick you follow-up. Were declining what's Can bit just view give next

Joseph Tung

of Well, I down the higher. seems coming think chance be to

Rick Hsu

Yes, all that's have. Okay. Great. I Yes, that's helpful.

Joseph Tung

You are welcome.

Operator

Goldman is question Next of Sachs. Evelyn Yu from

Unidentified Analyst

Bruce. me? hear is This you Can

Operator

Oh, Bruce.

Joseph Tung

Bruce. Hi,

Unidentified Analyst

try me questions. to add Let some simple

you from give a us what's the revenue geographic much So different capacity can in and for EMS, for is And is coming the capacity the what coming different capacity of of consumer geographic ATM of a alone? how China? the from and from capacity business location? location, And How your your much for distribution? much business, communication How China?

Joseph Tung

of capacity. In of our And have out we XX%. is operation terms of Taiwan in ATM, about X% about China terms

Unidentified Analyst

For EMS?

Joseph Tung

around the EMS in the over all and China place. are others XX%-some

Unidentified Analyst

or X see Taiwan you or, capacity of plus big asking Do asking Taiwan China some for demand you customer upside X outside and strong a China? plus have to that they're i.e.,

Joseph Tung

I don't ATM. that terms obvious think in of it's

still continue development -- because Taiwan infrastructure. new the and think of short the in difficult to more think rates something I much complete still very going It's to are up I the all run. set outside here. go in our to And be technology larger the strong

pretty that terms of of a see customers confident bet safer EMS, for think China. is I requests from more still are our outside we to the further with expand Taiwan working But customers to in do So them.

outside we investment terms of capacity including in China, are in of in Vietnam, expanding Taiwan. so And of making our Poland, a also lot in progress our

Unidentified Analyst

moment? so which your have you the to and or non-Taiwan at do ATM building don't out and any capacity, any non-China plan you see, I plan don't see have you increase this means capacity that

Joseph Tung

situation, customer us go to monitor for commercial makes that where and go, to sense continue wants our provided the We'll we'll us.

continue decision. monitor a to So make process. the the it's and right We'll situation dynamic to be going

Unidentified Analyst

expand you the So enough not for go ATM to Taiwan current is capacity China? of aggressive customer strong make a demand to and decision outside to

Joseph Tung

and yes, some I be are I we you're how like will the the sizable something U.S. about U.S. address And what whether monitoring when think see inquiries think said, comes. is really that the are referring time situation having better in the we I we and there to can

Unidentified Analyst

I first will see, is you the surprised seasonality, it going quarter pretty that -- a very understand not which the I'll to I'm is follow-up follow The I that case mentioned to seasonality. a question, try for there's most that. next for with how actually moment. can the XX% at are of foundry the of foundry previous no this we if XX%, decline sequential years. the at quarter similar looking wafer, names. like I in first And most mean, the you have be the

So me with tell is tell can go that this wrong? thought -- me you can my where process you might

Joseph Tung

and There a in our production production. between is our foundries time our lag and --

already And see we're quarter. been think has customers. performance the on in our based a at seasonality normal the I getting wafer that now pattern from Right the bank the quarter forecast do we're we looking there. first

Unidentified Analyst

ago. you current elaborate for see, quarter. What's Can also those you a like fourth LTA. mentioned than different the -- you the little lot situation of I follow-up LTA a quarters well, expectation. pricing bit environment in for bit One that's quick better a the saw And more? couple a some

Joseph Tung

one customers. think I the and doing – special Well, us a to is a relationship secure our – of circumstances with LTA for the a relatively signed ways is better

LTAs the serve cycle now. did its are retirement a into and think going purpose I it

negotiations environment pricing strategy think and would position I pricing us good be leverage that a have works things think suitable start for the to does will our and year, think I our next customers. of I next a be pricing for terms that And our year. normalized give ourselves both coming to in

Operator

Renaissance. Next question Ng is from China Szeho of

Szeho Ng

for Yes. Two questions me.

merger? possible can is any one, a mention small can't first make synergy the from does actually downturn? I additional we the that, expect ASE/SPIL the cost it really in quantify merger The to Because resilient

Joseph Tung

and It can from synergies known better have can with course, message in our usage of we Well, best terms in is allocation them. better many areas of of also our the created resource, R&D the our customers. of business or comes from negotiations efforts, our different synergy sharing come one with

the So And efficiency facing that's was earlier higher us mentioning structure really cost it in we're -- what also when and merger on now. through SPIL, session. the Ken better give does environment with a challenging a more that

Szeho Ng

coming Now can maybe just expect intensity improvement? we further OpEx perspective, to

Joseph Tung

a ratio I been we lot last improvement X.X%. think In third right? same was Well, period at have our probably making if – year, OpEx the OpEx, X.X%, it look terms we down quarter, of in was of our from

making of a think at the OpEx I operating will level ratio lot X. remain for we’re in So And progress expenses. quarter the to X, quarter similar

we continue operating So to over tight a expenses. control our will have

Operator

Hariharan. next is from Mr. Our Gokul question

Gokul Hariharan

a compare with the I more elevated to resilience that you few cycles. it well questions. of is that situation on on much inventory the customers, bit compared based see especially. Congrats with feels -- the margins, the last like couple had inventory What the couple maybe the of you're on today about banks wafer definitely a cycles. One, you little see, could talk as as what last seeing you it

you first clear just we think take this we than out of So feel should that year, do next half of half -- first by within of correction? first be done kind you to to could wanted understand why longer should the it Or next be inventory? inventory year, year

Joseph Tung

already in continuing. I it's think first the the inventory correction of year started the half and

we're I was originally little a think everybody else, half this And throughout expecting next expected. year. last same longer to of bit than as it's first stretching what

we in the And inventory by that next new I replaced think it be partially, be products introduce will the will the year. actually of some also, consumed.

Gokul Hariharan

Okay.

rough outgrow year? we're thinking industry much digit about mid-single something what next how guidance is on indication So next year for industry how or like down the flattish, is that? your being industry Is -- or your of expectation ASC that will

Joseph Tung

really said, don't down is except the of a I have higher. like chance No, coming view I

Gokul Hariharan

were back the think price will pricing, the of used kind more going on that kind should than still better to normalized Or we we to -- And declines be mid-to-high expect pricing should Understood. talk environment, the past? maybe next year? single-digit single-digit the it mid-to-high that decline see in of pricing we we we when about

Joseph Tung

confident normalized like XX% like strategy pricing price and do start capability and like to year. it’s up hikes for position capability previously our Well, And to customers. the And with we we’re remain margin process, I to throughout that believe us said, now and cycles, the we does XX%. we have pricing to be will ourselves believe we environment. that to negotiation when XX%, from very I move come between the will that be works going mentioned, better pricing to mentioned, But up our we going a there the suitable mid have both a will we give that XX%

confident that we a have So remain structural will margin we improvement.

Operator

Next Ng from of Instructions] Renaissance. is question [Operator China Szeho

Szeho Ng

a I have follow-up. Yes,

assume domestic clients Regarding factory? the China are ATM that serving primarily in operation, that can we we the

Joseph Tung

Yes. quite It the a And -- healthy there of resilient to still operation to think come it I working of will local at be nicely believe this that level. year, remains remain more a ours. We customers. is at next point operation be

Szeho Ng

one one. And dividend the on other the

dividend it or more absolute the on dollar based Going forward payout the the on be for based policy, would level?

Joseph Tung

it -- -- be will think I it was the more payout.

Szeho Ng

Okay.

XX%, the sticking around to Okay. That right? means ballpark

Joseph Tung

I'm sorry?

Szeho Ng

The yes. is XX%, ballpark around

Joseph Tung

been have paying we to out XX%. I roughly think XX%

Szeho Ng

all Okay, right.

you. got Okay,

Operator

Hariharan Gokul Next question is Mr. of from JPMorgan.

Gokul Hariharan

Are demand in industry? year bit the year? most becoming for correction Could your you talk we the you the Is we factor well? and Android more from bit industrial any side. a it to that do weakness reasonably in little are in demand in One follow-up well, of will little demand it the now semiconductor a Or smartphones as of auto through starting smartphones? next high-end be in mostly see next resilient the potential demand, about as well unlike you Or rest that think demand environment my seeing as question broad-based? And camp? some weakness

Joseph Tung

Yes.

automotive be point. at think I brightest And continues will into next believe the year. to momentum spot continue the this we that do

year-to-date, our very growing I has think fact, been In automotive fast.

to mark. this going hit strong. an will for also over I NT$XXX able XX% it And the will We from to be And hit think threshold NT$X million ATM be be perspective, revenue we’ll a it and we’ll – have EMS, growth year. continue billion

original the but accelerate. think EMS, a was to of I that’s that NT$X I was goal mark reach – think to in billion going by terms XXXX,

in have reached very very, goal. we already We chance that a good XXXX,

smartphone, I be Android think to the continues board, of I terms the In think soft. across system

terms is but one content in down, unit rising it it. offsetting of the volume, does come unit factor IC in of growth, in the Although terms

not going to be it’s but it’s softer, So crash. going to

Operator

Our from is of next Randy? question Credit Randy Abrams Suisse.

Randy Abrams

just and Could one strong that very a build. give of a had year. part earlier discussed for you USI, the I has a framework which think Actually, you high pull-in then bit traditionally full actually And base the the what business coming just any if first and And year, outlook for you next also set year? half and a is? EMS, see off both the on

Joseph Tung

particular, remain talk think but any come business growth we're Well, going be I customer EMS in our not seeing that next we year. in overall, to about confident we'll

Randy Abrams

Okay.

that it you should than So still grow. overall, you're from But like talked has mean auto growth. better lot still sounds I a of seeing? IC/ATM what

Joseph Tung

yes. EMS,

Randy Abrams

Okay.

might discuss seen if you and not direct just if that been China, like direction second just it impact. international seeing ships much it trying -- you've you're domestic if more change any flipside is in there? Could either localization, be to but relates The an domestic. could that early, have prioritizing one customers there's incremental customers, inquiry using any question, business in I'm behavior, to curious be domestic the and we're might the

Joseph Tung

local? the mean You

Randy Abrams

China supply. a move would bit international is Yes. then even a been out -- if China-based be if it any shift? And if OSATs, worrying, they're customers, actually domestic your based from start there's more a bit the prioritizing Like flipside bit they local customers, one

Joseph Tung

Well, customer us for geopolitical. customers Chinese political This a coming not is decision is value, not customers, regardless us come to a here. other to business. they the It's come for I it's or think

now right movement there customers seeing that think normal I are because forecasts, we're the of our Chinese there's tension. a of not much us giving

Randy Abrams

movement that's No, like good. either. it And sounds Okay. much internationally not

kind So because -- of on parts, certain it's so -- it's targeted

Joseph Tung

still No, -- I think it's up going and down,

Randy Abrams

-- normal the With

Joseph Tung

With the situation. normal industry

Okay. Great. That’s helpful.

Operator

no is question. There more

Joseph Tung

we year will the healthy this we of end think you session. can will very ahead I a in I a very that our us, nicely. much. very lot question, more weather that And And of there's continue challenges no confident have front of is us. but to there we given confident we Thank are leading are if Okay, position,

ASE Technology Holding (ASX) 27 Oct 222022 Q3 Earnings call transcript