ASE Industrial Holding Co Ltd

ASE Technology Holding reported record ATM revenues of TWD 126.1 billion in the second quarter of 2026, up 36% year over year and 12% sequentially, driven by strong demand for advanced packaging and testing services. ATM gross margin rose 5.4 percentage points to 27.3%, while operating margin expanded 6.2 percentage points to 15.7%, with operating profit up 124% year over year. The ATM segment now accounts for 66% of consolidated revenues and 94% of operating profit, up from 61% and 87% respectively a year earlier. Management expects third-quarter ATM revenues to grow 11-13% sequentially with gross margin between 28% and 29%, and fourth-quarter gross margin to exceed 30%. The Zacks Consensus Estimate projects 2026 revenue growth of 27.9% and EPS growth of 112.3%.

Advanced Micro Devices plans to invest more than $10 billion in Taiwan through 2029 to expand advanced chip packaging, chip substrates, and AI system manufacturing capacity across the island's semiconductor ecosystem. The investment will support partners including TSMC, ASE Technology, Siliconware Precision Industries, and Powertech Technology, and help scale production of next-generation products such as AMD's Helios AI racks. AMD's Data Center revenue grew 107% year-over-year to $6.7 billion in the second quarter, and management expects data center AI revenue to grow at a compound annual growth rate above 80% over the next three to five years. CEO Lisa Su is investing now to ensure AMD can manufacture enough hardware if rapidly growing AI demand translates into large-scale deployments.

The advanced packaging concept sector in China's A-share market continued to strengthen in the afternoon session. JCET, which fell over 6 percent yesterday, rebounded to hit limit up, with its market capitalisation reaching 185.2 billion yuan. Shenzhen Keda recorded a 20 percent limit up, while more than ten stocks including Xingye Co., Ltd., Langdi Group, Huatian Technology, and Xuguang Electronics were firmly locked at limit up. On the news front, a Huawei semiconductor executive released version two of the Tao Law, identifying five key implementation technologies including LogicFolding unit-level 3D stacking. In addition, ASE Technology Holding, a leading global OSAT supplier, has once again adjusted its packaging quotes, with price increases of up to over 20 percent, covering advanced packaging technologies such as CoWoS and FoCoS. The market expects other packaging and testing firms may follow suit. TSMC has also initiated price adjustments for advanced nodes, covering 3-nanometer, 7-nanometer and more advanced process nodes, with overall adjustments ranging from 5 to 10 percent. Wanlian Securities believes that ASE's price hike indicates strong industry sentiment in advanced packaging, and Huawei's new paper may help drive breakthroughs in domestic high-end chip technology. Yole expects the global advanced packaging market to grow from 54 billion US dollars in 2025 to 109 billion US dollars in 2031, with 2.5D and 3D packaging becoming the main growth driver.

Bank of America raised its price target on ASE Technology Holding to $48 from $36 and reaffirmed a Buy rating, citing the company's positioning to benefit from AI infrastructure expansion across GPUs, ASICs, and server CPUs via its VIPack solution. ASE Technology reported unaudited consolidated net revenues of NT$173,662 million for fiscal Q1 2026, up 17.2% year-over-year but down 2.4% sequentially. Net income attributable to shareholders was NT$14,148 million, compared to NT$7,554 million a year earlier and NT$14,713 million in the prior quarter, with basic earnings per share of NT$3.24.

ASE Technology Hldg has been upgraded to a Zacks Rank #1 (Strong Buy), reflecting an upward trend in earnings estimates. The Zacks Consensus Estimate for the company has increased 8.4% over the past three months, with analysts now expecting earnings of $0.84 per share for the fiscal year ending December 2026. The upgrade places ASE Technology Hldg in the top 5% of Zacks-covered stocks, indicating a strong potential for near-term price movement.

ASE Technology and Amkor Technology both reported strong first-quarter 2026 results driven by AI-fueled demand for advanced semiconductor packaging, but ASE Technology holds the edge in growth, profitability, and earnings outlook. ASE Technology posted NT$173.7 billion in revenue, up 17% year over year, with its Assembly, Testing and Material business reaching a record NT$112.4 billion, while Amkor achieved record revenue of $1.68 billion, a 27% increase. ASE Technology shares have surged 149.8% year to date, outpacing Amkor's 99.4% gain, and analysts expect ASE Technology's earnings per share to grow 47.4% in 2026 and another 73.2% in 2027, compared with Amkor's projected 38.7% growth this year and just 3.7% next year. ASE Technology also trades at a slightly lower forward price-to-earnings multiple of 35.33 times versus Amkor's 37.11 times, while both stocks carry premium valuations relative to the industry average of 33.61 times. The analysis concludes that ASE Technology's faster revenue growth, superior margin profile, stronger AI-driven momentum, and better long-term earnings trajectory make it the more compelling investment in the chip packaging space.

ASE Technology Holding, the world's largest chip packaging and testing provider, is expanding capacity to meet AI demand, Chief Operating Officer Tien Wu said on Wednesday. The company is adding 15 new sites this year, including six greenfield sites for ASE, seven greenfield sites for its unit Siliconware Precision Industries, and sites acquired from Taiwan's Innolux Corporation earlier this year. Wu reiterated that this year's capital expenditure is budgeted at $8.5 billion and may exceed that amount. The factory expansion is not just for the next two years, but for 2029 and beyond to meet strong AI demand. The company has been investing in the U.S., with two testing factories in California and two more factories planned, while regarding investment in Arizona at a particular customer's request, Wu said the company has been evaluating plans but needs to carefully consider what investments to make.

ASE Technology's first-quarter 2026 gross margin expanded to 20.1% from 16.8% a year ago, while operating margin improved to 10.1% from 6.5%, driven by a richer mix of Assembly, Testing and Materials revenue and growing demand for advanced packaging services. The company raised its 2026 LEAP revenue outlook by about 10% to more than $3.5 billion and expects second-quarter consolidated gross margin to improve another 20 to 100 basis points sequentially. Management reiterated that ATM margins should continue rising through 2026 and reach the upper end of the company's structural margin range by year-end as AI-related packaging demand remains strong. However, accelerated investments in new LEAP production lines could temporarily weigh on quarterly profitability before new capacity begins contributing in the fourth quarter. ASE Technology's stock has surged 151.9% year to date, and the Zacks Consensus Estimate for its 2026 earnings per share has increased to 82 cents from 77 cents over the past 60 days.