ASE Technology Holding Co Reports Q2 2026 Results: Full Earnings Call Transcript

ASE Technology Holding Co (NYSE: ASX ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

View the webcast at Summary ASE Technology Holding Co reported a 24% year-on-year revenue growth for the first half of 2026, with APM revenues up 35%, and expects to maintain this momentum into the second half. The company is heavily investing in R&D, human capital, and infrastructure to support multi-year growth, with a focus on AI applications and hardware infrastructure as key strategic priorities. 2 billion and a gross margin of 21%. Net income rose 180% year over year.

5%. S. operations and collaborating with partners like Intel on EMIB technology, emphasizing its non-conflict position in the ecosystem. The company is addressing capacity constraints by investing in new facilities and equipment, with an additional $2 billion in capex for 2026.

LEAP services revenue is projected to double in 2027 as assembly and test services grow in parallel, driven by strong demand across various applications. Full Transcript Kenneth Hsiang, Head of Investor Relations Hello, I am Ken Shung, the head of Investor Relations at ASE Technology Holding Co. Welcome to our second quarter 2026 earnings release. I am joined today by Dr.

Tien Wu, our COO, and Joseph Tung, our CFO. Thank you for joining us today. Please refer to our Safe Harbor notice on page 2. All participants consent to having their voices and questions broadcast via participation in this event.

If you do not consent, please refrain from asking questions or leave the session now. I would like to remind everyone that the presentation that follows may contain forward-looking statements. These forward-looking statements are subject to a high degree of risk and our actual results may differ materially. For the purposes of this presentation, dollar figures are generally stated in New Taiwan dollars unless otherwise indicated.

As a Taiwan-based company, our financial information is presented in accordance with Taiwan IFRS. Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those separately presented by our subsidiaries. For today's presentation, Dr. Tien Wu will begin with a mid-year business update.

I will then walk through the Q2 results and Joseph will close with our third quarter outlook. With that, let me hand the presentation over to Dr. Tien Wu. Tien Wu, CEO of ASE and USI Good afternoon.

I would like to give you the first half 2026 recap and also the full year outlook. For my presentation, it will be all in US dollars. Consolidated revenue grew 24% year on year in the first half of 2026, with APM revenues up 35% year on year for the first half. Leading-edge, advanced packaging and overall testing outpaced growth for the ATM business.

We expect to maintain the same growth momentum into the second half for the full year. 5 billion, while the general segment is expected to grow by 30% year on year versus previous guidance of 13%. So for the full year we expect the ATM business revenue to grow by 35%. 4 billion in the first half.

Joseph will give you more detail for the full year. Stepping up investment in R&D, human capital, advanced capacity and also automation, smart factory infrastructure to support multi-year growth. On the second page, I would like to give you some highlights on market dynamics and positioning. There are many moving parts in the market today.

You're reading the same newspapers and watching the same news as I do. What I'm trying to present to you is the company view. We will try to present the logic for why we are making particular decisions at this particular juncture of time. AI-enabled new applications with bigger scale and potential — I'm not going to articulate the detail.

If you're interested, we can talk more in the Q&A. That's our current view. I think very few of you will disagree with this statement that AI is a paradigm shift, and we do have potential for bigger scale and multiple applications. And that's our current view in terms of when and how we are monitoring the progress.

I believe we are at the beginning of the AI paradigm shift. There will be multiple stages of transition. We can talk more in the Q&A. The second comment is how we feel AI demands new hardware that did not exist previously, in size, complexity, and integration.

You can argue about the computation intensity, the memory, the power, the linkage, the bandwidth. All in all, what we're trying to develop right now is a brand new platform to support the potential AI applications — the data center, the agentic, and, in the future, the physical AI humanoid. All of the hardware will be different than what we have been producing so far. There is a growing need for industrial power, connectivity, and storage devices because of the AI transition, evolution, or paradigm shift.

The company is seeing all three right now from all of our customers on a multi-year basis. Let me talk about ASE's strategic priorities. Again, this is the company view. We have to have a blueprint, a plan, a vision in order for the 100,000 employees to act on.

And what I'm trying to present to you is the highlight for that blueprint. Hardware infrastructure is a bottleneck. With AI, the hardware requirement is new, insatiable, and more complicated and more complex. And today there are very few manufacturers capable of producing hardware.

Therefore, it is the bottleneck today — from our capacity, for automation, and more importantly from an innovation perspective. We can talk a little bit more detail about a panel, about CoAs, about glass substrate, about VRM, about silicon photonics. I can go on and on, but all of these are tied to the infrastructure and your capability to ramp with the complexity, integration, and the design blueprint the customer is asking you to do. All in all, I call all of this hardware infrastructure, and that is the new bottleneck.

We have not experienced this for the last 40 years. Packaging is moving up in the system architecture value chain. For me, as a designer by training, the system architecture always is at the top of the value chain. Packaging is approaching the system architecture value by providing the new complexity and integration capability with the variables that I just talked about.

Now if you believe hardware is the new bottleneck and that packaging is moving up in the value chain of the system architecture, then ASE has a unique position to support the AI migration, evolution, or paradigm shift and align with all customers' long-term objectives today. ASE's competitive position — I talk about this many times — the ecosystem position, cluster, or Taiwan cluster; scale, or the AI data center Taiwan scale and other digital scale; the efficiency — I want to single out the pure play. The pure play enables you to have a seamless cooperation with all supply chain players.

In the future, this could be one of the competitive advantages for ASE as a pure-play OSAT: we have no conflict with foundry, no conflict with substrate providers. We have no conflict with anybody. Therefore, we have a good way not only to collaborate with our customers long term, but also to collaborate with all the ecosystem players. That will turn critical for the overall complex, integrated nature for the AI transitional evolution.

The first-mover advantages — I'm very specific about the first-mover advantages: technology, speed, capacity, and most importantly, trust. So everything the company does circles around the long-term business objectives as well as the seamless integration with the ecosystem players, and gives you the speed, the efficiency, and earns the customer trust. So that's the highlight for me for the second half. Okay, thank you.

Joseph Tung (Chief Financial Officer) Okay, now for third quarter 2026 outlook. 6, management projects overall performance for the third quarter of 2026 to be as follows. On a consolidated basis, in NT dollar terms, consolidated third-quarter revenue should grow by 21% to 22% quarter over quarter. 5%.

5%. For ATM, in NT dollar terms, our ATM third-quarter revenue should grow by 11% to 13% quarter over quarter. Our ATM third-quarter gross margin should be between 28% to 29%. On EMS, in NT dollar terms, our EMS third-quarter revenue should grow by around 40% quarter over quarter.

4%. With that is the 2026 third-quarter outlook. Now adding a bit of color for the full year and next. First, on capex.

Given stronger demand for LEAP in 2026 and beyond, we will need to add another $1 billion each this year for facilities and equipment, so the total is adding another $2 billion for capex. While the additional investment for facilities and most of the equipment are for LEAP, we also need to add capacity for mainstream advanced packaging and testing to support the general market demand. 5 billion as business momentum continues to be very strong, we are aiming to double our LEAP revenue in 2027. 3% came in ahead of our guidance.

We continue to expect sequential margin improvement, with fourth-quarter ATM gross margin likely to exceed our structural margin ceiling of 30%. At such point, we will start to review if we would adjust our structural margin range. With that, thank you. Kenneth Hsiang, Head of Investor Relations During the Q and A session that follows, we would appreciate if your questions could be as clear and concise as possible and asked singularly.

We will start by taking questions from live participants and then alternate in questions from our online participants. I, as the moderator, will be receiving each question and repeating and directing each asked question. After an initial question, the participant may ask a follow up question, clarifications of the earlier question, or another question entirely. Then we'll move to the next participant.

Participants may return to the queue for any additional questions and or clarifications. Thank you. S. operation.

Not just the NCOR but also KY even announced to do that, right? S. S. I guess it's a little bit separate question, but can you also comment a little bit about the Intel EMIB involvement by ASE?

Thank you. Kenneth Hsiang, Head of Investor Relations Charlie. You're asking about the competitive landscape that we're facing and, secondly, EMIB. Dr.

S. operation first. What I'm going to talk about, I have repeated several times for the last two years. S.

operation: IC test development and also services in California. We have one factory in Fremont, California. We have one factory in San Jose. We're in the process of expanding to number three and number four factories.

These are particularly required by our customers during the, well, for the last 20 years in Bay Area for upfront chip design, test development, also technology development, and that is ongoing. Right now the agreement that we have with our leading customer is the following. We will develop and build a fully automated, efficient line in Taiwan. When we are comfortable with our resources and efficiency, in due time we will migrate and move the operation to other places in the world.

It could be United States, could be somewhere else. That has always been the case. So it's not like we're not supporting. We are supporting development, R and D, also architectural design.

In terms of manufacturing process development, for now we are focusing on Taiwan until we build the appropriate scale, having the appropriate resources and know-how and efficiency. Upon that time we will work with our customers to move to the other part of the world for better logistics. The second comment is EMIB. I'm going to repeat what TSMC has responded: right now it is really capacity constrained.

If there's any other alternative technology that can offer the same yield to resolve the bottleneck that we have for the AI infrastructure, we're welcome to see that. For ASE, we're also collaborating with other customers along the same line, including EMIB. The following question is if EMIB poses potential threat or competitive advantages over CoWoS. Right.

That's always a possibility. I have been working in the packaging industry for 40 years. I've gone through about a thousand different packaging designs. At the end of the day, probably 20 will live but will be here.

So there's always a competing technology, alternative materials. That's always been the focus of R and D for EMIB. We're happy to see if EMIB can ramp up in terms of efficiency and performance. That's up to the system as well as the market to decide.

We're not going to make a judgment call who has the superiority. Our focus is to support the CoWoS. We're trying to ramp up the CoWoS scaling efficiency as fast as we can. If a customer asks for other alternative technology, ASE will also include that in our roadmap.

I don't think there's a potential threat. Again, we are a pure play. If the EMIB substrate becomes the right alternative, we just buy in the substrate and we do the assembly. There is no conflict.

So anything is welcome. It's not like a zero-sum game, like you can only choose one. I mean it's never been the case. Right.

The world is a big place. Kenneth Hsiang, Head of Investor Relations More question from the floor. Rick, Analyst Hi Dr. Wu and Joseph.

Ken, thank you for taking my question. My first question is, can you give us a little bit more detailed guideline for your Q3 AT and demand driver for both for LEAP and also for general packaging and testing, the more detailed demand driver across the key applications or products? Kenneth Hsiang, Head of Investor Relations Rick, you're asking for maybe segmented drivers of what's helping the industry or our results pick up at this point, is that correct? Rick, Analyst Yeah.

Right. Demand driver. Tien Wu, CEO of ASE and USI The question is the Q3 driver. Again, we have a very awkward and peculiar position because we're capacity constrained.

So we talk about 12 to 13% growth. That means we have to add 12 to 13% capacity. The demand overall is strong. I'm not going to comment about the memory pricing or any consumer devices, but overall all of our customers are asking for more devices for Q3 and Q4.

Kenneth Hsiang, Head of Investor Relations Follow up. Rick, Analyst No, not follow up. The second question, can you elaborate your development of the full CoWoS-like, and this year roughly about how much is still coming from outsourcing? And what's your development and progress into next year of your internal for your full process development?

Kenneth Hsiang, Head of Investor Relations Rick, you're looking for the composition of our LEAP services between what is potentially OS type services and full process and test. Okay. Joseph Tung (Chief Financial Officer) Basically we are on track with our full process business development for this year. We said that we're going to have about $300 million worth of revenue coming from that space and things are on track.

We are aggressively expanding that capacity and by next year I think we will have pretty substantial growth in that area as well. And again, this is something that under development we have now fully. I think margin-wise is not fully reflected at this point. But going forward, I think full process will also be another margin accretive business for us with pretty good substantial growth coming into next year.

Kenneth Hsiang, Head of Investor Relations We have our next question coming from online. Next question is from Sunny Lin of UBS. Sunny, Sunny Lin, Analyst at UBS Hello. Could you hear me okay?

Kenneth Hsiang, Head of Investor Relations Yes, we can hear you. Sunny Lin, Analyst at UBS Thank you very much. Good afternoon. Congrats on the very strong outlook.

Sorry for not being able to attend in person. So my first question is maybe to follow up on 2027 LEAP outlook and so maybe take a step back. 5 billion. 5 to 4 billion, and then for 2027 for it to double?

Have we already had an idea in terms of breakdown by full process, outsourcing for substrate, and also test? Kenneth Hsiang, Head of Investor Relations Sunny, you're looking for an update on our LEAP guidance for this year and then looking forward into 2027, whether we have any nuggets of information for you, is that correct? Sunny Lin, Analyst at UBS Right. Thank you Ken.

Joseph Tung (Chief Financial Officer) Thank you.