ASE Technology Holding Co., Ltd. Reports Its Unaudited Consolidated Financial Results for the Second Quarter of 2024

Rhea-AI Summary

ASE Technology Holding Co., (ASX) reported its Q2 2024 financial results. Key highlights include:

- Net revenues of NT$140,238 million, up 2.9% YoY and 5.6% QoQ
- Net income of NT$7,783 million, up from NT$7,740 million in Q2 2023
- Basic EPS of NT$1.80 (US$0.112 per ADS)
- Gross margin increased to 16.4% from 15.7% in Q1 2024
- Operating margin improved to 6.4% from 5.7% in Q1 2024

The company's ATM segment saw a 2.2% YoY and 5.3% QoQ increase in net revenues, while the EMS segment grew 4.1% YoY and 6.0% QoQ. Capital expenditures totaled US$406 million for the quarter.

Positive

• Net revenues increased 2.9% year-over-year and 5.6% sequentially
• Net income rose to NT$7,783 million from NT$7,740 million in Q2 2023
• Gross margin improved by 0.7 percentage points to 16.4%
• Operating margin increased to 6.4% from 5.7% in Q1 2024
• ATM segment net revenues grew 2.2% YoY and 5.3% QoQ
• EMS segment net revenues increased 4.1% YoY and 6.0% QoQ

Negative

• Net foreign exchange loss of NT$1,420 million due to USD appreciation against TWD

Financial Analyst

ASE Technology Holding Co., 's Q2 2024 results demonstrate a solid performance with notable improvements across key financial metrics. Net revenues increased by 2.9% year-over-year and 5.6% sequentially to NT$140,238 million. This growth is particularly impressive given the challenging global economic environment.

The company's net income attributable to shareholders rose to NT$7,783 million, up from NT$7,740 million in Q2 2023 and NT$5,682 million in Q1 2024. This represents a significant quarter-over-quarter improvement of 37%, indicating strong operational efficiency and cost management.

Gross margin improved by 0.7 percentage points to 16.4%, while operating margin increased to 6.4% from 5.7% in the previous quarter. These margin expansions suggest effective cost control measures and potentially improved pricing power.

The company's balanced revenue mix, with packaging and EMS operations each contributing about 45% of total revenues, provides diversification and stability. The slight increase in EMS revenues (4.1% year-over-year) could indicate growing demand in this segment.

However, investors should note the NT$1,420 million net foreign exchange loss, primarily due to the appreciation of the U.S. dollar against the New Taiwan dollar. This highlights the company's exposure to currency fluctuations, which could impact future earnings.

Overall, ASE Technology Holding's Q2 results paint a picture of a company navigating global challenges effectively, with improved profitability and steady growth across its main business segments.

Semiconductor Industry Expert

ASE Technology Holding's Q2 2024 results reflect the ongoing resilience and growth in the semiconductor industry. The 2.2% year-over-year increase in ATM (Assembly, Testing and Materials) revenues to NT$77,813 million indicates steady demand for semiconductor manufacturing services.

The improvement in ATM gross margin to 22.1% from 21.0% in Q1 is particularly noteworthy. This suggests that ASE is successfully managing costs and potentially benefiting from a favorable product mix. The operating margin expansion in this segment to 9.3% further underscores the company's operational efficiency.

The US$406 million capital expenditure, with US$215 million allocated to packaging operations and US$154 million to testing operations, demonstrates ASE's commitment to maintaining technological leadership. This investment is important in an industry where staying ahead of the curve is essential for long-term competitiveness.

The company's customer concentration remains relatively high, with the top five customers accounting for 45% of total revenues. While this indicates strong relationships with key clients, it also presents a potential risk if any major customer were to reduce orders significantly.

The increase in total employees to 92,243 suggests that ASE is preparing for future growth and potentially expanding its capacity. This, combined with the substantial unused credit lines of NT$416,979 million, positions the company well for potential market opportunities or strategic investments.

Overall, ASE's Q2 results reflect the broader trends in the semiconductor industry, with steady growth and ongoing investments in capacity and technology to meet evolving market demands.

TAIPEI, July 25, 2024 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TWSE: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor assembly and testing services ("ATM") and the provider of electronic manufacturing services ("EMS"), today reported its unaudited net revenues^[1] of NT$140,238 million for 2Q24, up by 2.9% year-over-year and up by 5.6% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$7,783 million, up from NT$7,740 million in 2Q23 and up from NT$5,682 million in 1Q24. Basic earnings per share for the quarter were NT$1.80 (or US$0.112 per ADS), compared to NT$1.80 for 2Q23 and NT$1.32 for 1Q24. Diluted earnings per share for the quarter were NT$1.75 (or US$0.109 per ADS), compared to NT$1.76 for 2Q23 and NT$1.28 for 1Q24.

RESULTS OF OPERATIONS

2Q24 Results Highlights – Consolidated

• Net revenues from packaging operations, testing operations, EMS operations, and others represented approximately 45%, 9%, 45%, and 1% of the total net revenues for the quarter, respectively.
• Cost of revenues was NT$117,172 million for the quarter, up from NT$111,935 million in 1Q24.
  • Raw material cost totaled NT$70,387million for the quarter, representing 50% of the total net revenues.
  • Labor cost totaled NT$15,673 million for the quarter, representing 11% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$13,406 million for the quarter.
• Gross margin increased by 0.7 percentage points to 16.4% in 2Q24 from 15.7% in 1Q24.
• Operating margin was 6.4% in 2Q24, compared to 5.7% in 1Q24.
• In terms of non-operating items:
  • Net interest expense was NT$1,158 million.
  • Net foreign exchange loss was NT$1,420 million, primarily attributable to the appreciation of the U.S. dollar against the New Taiwan dollar.
  • Net gain on valuation of financial assets and liabilities was NT$2,664 million.
  • Net gain on equity-method investments was NT$459 million.
  • Other net non-operating income was NT$551 million, primarily attributable to miscellaneous income.
    Total non-operating income and expenses for the quarter was NT$1,096 million.
• Income before tax was NT$10,117 million in 2Q24, compared to NT$7,860 million in 1Q24. We recorded income tax expenses of NT$1,952 million for the quarter, compared to NT$1,904 million in 1Q24.
• Net income attributable to shareholders of the parent was NT$7,783 million in 2Q24, compared to NT$7,740 million in 2Q23 and NT$5,682 million in 1Q24.
• Our total number of shares outstanding at the end of the quarter was 4,390,178,137, including treasury stock owned by our subsidiaries in 2Q24. Our 2Q24 basic earnings per share of NT$1.80 (or US$0.112 per ADS) were based on 4,317,151,632 weighted average numbers of shares outstanding in 2Q24. Our 2Q24 diluted earnings per share of NT$1.75 (or US$0.109 per ADS) were based on 4,383,324,817 weighted average number of shares outstanding in 2Q24.

2Q24 Results Highlights – ATM

• Net revenues were NT$77,813 million for the quarter, up by 2.2% year-over-year and up by 5.3% sequentially.
• Cost of revenues was NT$60,612 million for the quarter, up by 1.1% year-over-year and up by 3.9% sequentially.
  • Raw material cost totaled NT$21,236 million for the quarter, representing 27% of the total net revenues.
  • Labor cost totaled NT$12,437 million for the quarter, representing 16% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$11,934 million for the quarter.
• Gross margin increased by 1.1 percentage points to 22.1% in 2Q24 from 21.0% in 1Q24.
• Operating margin was 9.3% in 2Q24, compared to 8.2% in 1Q24.

2Q24 Results Highlights – EMS

• Net revenues were NT$62,907 million, up by 4.1% year-over-year and up by 6.0% sequentially.
• Cost of revenues for the quarter was NT$56,870 million, up by 3.8% year-over-year and up by 5.6% sequentially.
  • Raw material cost totaled NT$49,075 million for the quarter, representing 78% of the total net revenues.
  • Labor cost totaled NT$3,121 million for the quarter, representing 5% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$1,204 million for the quarter.
• Gross margin increased by 0.3 percentage points to 9.6% in 2Q24 from 9.3% in 1Q24.
• Operating margin was 3.1% in 2Q24, compared to 2.8% in 1Q24.

LIQUIdiTY AND CAPITAL RESOURCES

• Capital expenditures in 2Q24 totaled US$406 million, of which US$215 million was used in packaging operations, US$154 million in testing operations, US$31 million in EMS operations and US$6 million in interconnect materials operations and others.
• Total unused credit lines amounted to NT$416,979 million as of June 30, 2024.
• Current ratio was 1.17 and net debt to equity ratio was 0.34 as of June 30, 2024.
• Total number of employees was 92,243 as of June 30, 2024, compared to 91,568 as of March 31, 2024.

Business Review

Customers
ATM Basis

• Our five largest customers together accounted for approximately 45% of our total net revenues in 2Q24, compared to 46% in 1Q24. Two customers each accounted for more than 10% of our total net revenues in 2Q24 individually.
• Our top 10 customers contributed 60% of our total net revenues in 2Q24, compared to 61% in 1Q24.
• Our customers that are integrated device manufacturers or IDMs accounted for 30% of our total net revenues in both 2Q24 and 1Q24.

EMS Basis

• Our five largest customers together accounted for approximately 67% of our total net revenues in both 2Q24 and 1Q24. One customer accounted for more than 10% of our total net revenues in 2Q24.
• Our top 10 customers contributed 74% of our total net revenues in 2Q24, compared to 75% in 1Q24.

About ASE Technology Holding Co., Ltd.
ASEH is the leading provider of semiconductor manufacturing services in assembly and test. The Company develops and offers complete turnkey solutions covering front-end engineering test, wafer probing and final test, as well as packaging, materials and electronic manufacturing services through USI with superior technologies, breakthrough innovations, and advanced development programs. With advanced technological capabilities and a global presence spanning Taiwan, China, South Korea, Japan, Singapore, Malaysia, Vietnam, Mexico, and Tunisia as well as the United States and Europe, ASEH has established a reputation for reliable, high quality products and services.
For more information, please visit our website at https://www.aseglobal.com.

Safe Harbor Notice
This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied by the forward-looking statements for reasons including, among others, risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent shift in United States trade policies; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including the 2023 Annual Report on Form 20-F filed on April 3, 2024.

Supplemental Financial Information
(Unaudited)

Consolidated Operations

	2Q24	1Q24	2Q23
EBITDA[2] (NT$ million)	26,127	23,974	25,770

ATM Operations

	2Q24	1Q24	2Q23
Net Revenues (NT$ million)	77,813	73,908	76,108
Revenues by Application
Communication	49 %	52 %	48 %
Computing	19 %	18 %	19 %
Automotive, Consumer & Others	32 %	30 %	33 %
Revenues by Type
Bumping, Flip Chip, WLP & SiP	44 %	43 %	41 %
Wirebonding	31 %	30 %	34 %
Others	7 %	9 %	7 %
Testing	16 %	16 %	16 %
Material	2 %	2 %	2 %
Capacity & EBITDA[2]
CapEx (US$ million)[3]	374	206	176
EBITDA (NT$ million)[2]	22,205	20,422	21,643
Number of Wirebonders	25,154	25,406	25,880
Number of Testers	5,676	5,611	5,495

EMS Operations

	2Q24	1Q24	2Q23
Net Revenues (NT$ million)	62,907	59,365	60,424
Revenues by Application
Communication	33 %	34 %	34 %
Computing	11 %	12 %	8 %
Consumer	29 %	27 %	33 %
Industrial	13 %	12 %	15 %
Automotive	11 %	12 %	8 %
Others	3 %	3 %	2 %
Capacity
CapEx (US$ million)[3]	31	21	33

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Income Data
(In NT$ million, except per share data)
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2024		Mar. 31 2024		Jun. 30 2023		Jun. 30 2024		Jun. 30 2023
Net revenues
Packaging	62,834		59,458		61,846		122,292		121,875
Testing	12,623		12,102		12,292		24,725		23,699
EMS	62,853		59,326		60,384		122,179		118,115
Others	1,928		1,917		1,753		3,845		3,477
Total net revenues	140,238		132,803		136,275		273,041		267,166
Cost of revenues	(117,172)		(111,935)		(114,534)		(229,107)		(226,086)
Gross profit	23,066		20,868		21,741		43,934		41,080
Operating expenses
Research and development	(7,106)		(6,609)		(6,218)		(13,715)		(11,790)
Selling, general and administrative	(6,939)		(6,734)		(6,111)		(13,673)		(12,183)
Total operating expenses	(14,045)		(13,343)		(12,329)		(27,388)		(23,973)
Operating income	9,021		7,525		9,412		16,546		17,107
Net non-operating income and expenses
Interest expense - net	(1,158)		(1,107)		(1,100)		(2,265)		(2,176)
Foreign exchange loss - net	(1,420)		(3,219)		(1,188)		(4,639)		(643)
Gain on valuation of financial assets and liabilities - net	2,664		4,098		1,914		6,762		2,017
Gain on equity-method investments - net	459		57		326		516		314
Others - net	551		506		747		1,057		1,362
Total non-operating income and expenses	1,096		335		699		1,431		874
Income before tax	10,117		7,860		10,111		17,977		17,981
Income tax expense	(1,952)		(1,904)		(1,914)		(3,856)		(3,691)
Income from operations and before non-controlling interests	8,165		5,956		8,197		14,121		14,290
Non-controlling interests	(382)		(274)		(457)		(656)		(733)
Net income attributable to shareholders of the parent	7,783		5,682		7,740		13,465		13,557
Per share data:
Earnings per share
– Basic	NT$1.80		NT$1.32		NT$1.80		NT$3.12		NT$3.16
– Diluted	NT$1.75		NT$1.28		NT$1.76		NT$3.02		NT$3.07
Earnings per equivalent ADS
– Basic	US$0.112		US$0.084		US$0.118		US$0.196		US$0.207
– Diluted	US$0.109		US$0.082		US$0.115		US$0.190		US$0.202
Number of weighted average shares used in diluted EPS calculation ( in thousand shares)	4,383,325		4,368,340		4,342,948		4,376,301		4,341,706
FX (NTD/USD)	32.23		31.30		30.57		31.77		30.49

 

ASE Technology Holding Co., Ltd.
Summary of ATM Statement of Income Data
(In NT$ million) 
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2024		Mar. 31 2024		Jun. 30 2023		Jun. 30 2024		Jun. 30 2023
Net revenues:
Packaging	63,838		60,388		62,607		124,226		123,377
Testing	12,623		12,102		12,292		24,725		23,699
Direct Material	1,264		1,338		1,165		2,602		2,271
Others	88		80		44		168		80
Total net revenues	77,813		73,908		76,108		151,721		149,427
Cost of revenues	(60,612)		(58,351)		(59,947)		(118,963)		(118,517)
Gross profit	17,201		15,557		16,161		32,758		30,910
Operating expenses:
Research and development	(5,483)		(5,135)		(4,748)		(10,618)		(9,017)
Selling, general and administrative	(4,464)		(4,345)		(4,008)		(8,809)		(8,079)
Total operating expenses	(9,947)		(9,480)		(8,756)		(19,427)		(17,096)
Operating income	7,254		6,077		7,405		13,331		13,814

 

ASE Technology Holding Co., Ltd.
Summary of EMS Statement of Income Data
(In NT$ million) 
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2024		Mar. 31 2024		Jun. 30 2023		Jun. 30 2024		Jun. 30 2023
Net revenues
Total net revenues	62,907		59,365		60,424		122,272		118,157
Cost of revenues	(56,870)		(53,866)		(54,785)		(110,736)		(107,951)
Gross profit	6,037		5,499		5,639		11,536		10,206
Operating expenses
Research and development	(1,668)		(1,533)		(1,527)		(3,201)		(2,851)
Selling, general and administrative	(2,414)		(2,309)		(2,023)		(4,723)		(3,941)
Total operating expenses	(4,082)		(3,842)		(3,550)		(7,924)		(6,792)
Operating income	1,955		1,657		2,089		3,612		3,414

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ million)
(Unaudited)

			As of Jun. 30, 2024			As of Mar. 31, 2024
Current assets
Cash and cash equivalents			66,173			75,105
Financial assets – current			9,162			8,410
Trade receivables			102,354			97,264
Inventories			63,488			63,259
Others			29,148			28,964
Total current assets			270,325			273,002
Financial assets – non-current & Investments – equity -method			30,887			30,776
Property, plant and equipment			271,835			265,592
Right-of-use assets			11,292			11,534
Intangible assets			68,300			68,986
Others			30,291			31,580
Total assets			682,930			681,470
Current liabilities
Short-term borrowings[4]			51,065			56,863
Current portion of bonds payable & Current portion of long-term borrowings			18,655			14,075
Trade payables			70,906			66,454
Others			89,494			91,651
Total current liabilities			230,120			229,043
Bonds payable			21,976			31,618
Long-term borrowings			84,414			84,589
Other liabilities			22,950			24,051
Total liabilities			359,460			369,301
Equity attributable to shareholders of the parent			302,348			290,996
Non-controlling interests			21,122			21,173
Total liabilities & shareholders' equity			682,930			681,470
Current ratio			1.17			1.19
Net debt to equity ratio			0.34			0.36

 

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Cash Flow Data
(In NT$ million)
(Unaudited)

		For the three months ended						For the six months ended
		Jun. 30 2024		Mar. 31 2024		Jun. 30 2023		Jun. 30 2024		Jun. 30 2023
Cash Flows from Operating Activities:
Profit before income tax		10,117		7,860		10,111		17,977		17,981
Depreciation & amortization		14,801		14,586		14,488		29,387		28,927
Other operating activities items		(8,132)		(5,752)		(8,643)		(13,884)		(194)
Net cash generated from operating activities		16,786		16,694		15,956		33,480		46,714
Cash Flows from Investing Activities:
Net payments for property, plant and equipment		(14,786)		(12,513)		(12,146)		(27,299)		(27,353)
Other investment activities items		304		(2,995)		(2,285)		(2,691)		(1,870)
Net cash used in investing activities		(14,482)		(15,508)		(14,431)		(29,990)		(29,223)
Cash Flows from Financing Activities:
Total net repayment of borrowings		(12,322)		(139)		(3,395)		(12,461)		(15,016)
Other financing activities items		(1,093)		(33)		(1,056)		(1,126)		(939)
Net cash used in financing activities		(13,415)		(172)		(4,451)		(13,587)		(15,955)
Foreign currency exchange effect		2,179		6,807		481		8,986		35
Net increase (decrease) in cash and cash equivalents		(8,932)		7,821		(2,445)		(1,111)		1,571
Cash and cash equivalents at the beginning of period		75,105		67,284		62,056		67,284		58,040
Cash and cash equivalents at the end of period		66,173		75,105		59,611		66,173		59,611
Cash and cash equivalents in the consolidated balance sheet		66,173		75,105		59,351		66,173		59,351
Cash and cash equivalents included in disposal groups held for sale		-		-		260		-		260

 

[1] All financial information presented in this press release is unaudited, consolidated and prepared in accordance with Taiwan-IFRS (International Financial Reporting Standards as endorsed for use in the R.O.C.). Such financial information is generated internally by us and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by our independent auditors, to which we subject our year-end audited consolidated financial statements, and may vary materially from the year-end audited consolidated financial information for the same period. Any evaluation of the financial information presented in this press release should also take into account our published year-end audited consolidated financial statements and the notes to those statements. In addition, the financial information presented is not necessarily indicative of our results of operations for any future period. [2] EBITDA stands for net income or loss before interest, taxes, depreciation, amortization, impairment and investment gain or loss as well as other items. [3] Capital expenditure excludes building construction costs. [4] Short-term borrowings include short-term loans and bills payable.

 

Investor Relations Contact
ir@aseglobal.com
Tel: +886.2.6636.5678
https://www.aseglobal.com

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SOURCE ASE Technology Holding Co., Ltd.

FAQ

What was ASX's net revenue for Q2 2024?

ASE Technology Holding Co., (ASX) reported net revenues of NT$140,238 million for Q2 2024.

How did ASX's earnings per share (EPS) change in Q2 2024 compared to Q2 2023?

ASX's basic EPS remained stable at NT$1.80 in Q2 2024, unchanged from Q2 2023. However, diluted EPS slightly decreased from NT$1.76 in Q2 2023 to NT$1.75 in Q2 2024.

What was ASX's gross margin in Q2 2024?

ASX's gross margin increased to 16.4% in Q2 2024, up from 15.7% in Q1 2024.

How much did ASX spend on capital expenditures in Q2 2024?

ASX reported capital expenditures of US$406 million for Q2 2024.

What was the performance of ASX's ATM and EMS segments in Q2 2024?

ASX's ATM segment net revenues grew 2.2% year-over-year and 5.3% quarter-over-quarter. The EMS segment net revenues increased 4.1% year-over-year and 6.0% quarter-over-quarter.