ASE Technology Holding Co to Raise Budget by 20% This Year
ASE Technology Holding Co, a leading Taiwanese company, has announced its plans to increase its capital expenditure for this year by 20 percent. This move is in response to the stronger-than-anticipated demand for leading-edge advanced packaging (LEAP) this year and next.
The company, which is headquartered in Kaohsiung, plans to spend an additional US$1.5 billion on new facilities and machinery equipment this year. This is on top of the initial estimate of US$7 billion made in February. ASE has not ruled out the possibility of hiking spending again this year and expects another ‘heavy spending’ year next year.
Strong Demand for LEAP Services
ASE’s LEAP services revenue is expected to grow 10 percent to US$3.5 billion this year, according to the company’s chief financial officer, Joseph Tung. This is higher than the initial estimate of US$3.2 billion. The growth next year is expected to outpace this year’s, driven by the increasing demand for advanced packaging technology.
LEAP services are part of ASE’s high-end packaging technology, which is similar to the chip-on-wafer-on-substrate (CoWoS) packaging technology of Taiwan Semiconductor Manufacturing Co. This technology is used for chips powering artificial intelligence (AI) applications. ASE also provides total turnkey LEAP solutions to customers, called full-process LEAP services, which is projected to generate US$300 million in revenue this year.
Panel-Based Packaging Technology
ASE is also developing panel-based packaging technology and has installed a fully automated pilot line in Kaohsiung. This pilot line is prepared for volume production next year, according to Tung. The company expects substantial growth in the full-process LEAP services area, not just in terms of revenue but also in terms of customer base expansion.
Quarterly Revenue Forecast
For this quarter, ASE forecasts revenue to grow between 7 percent and 9 percent sequentially, compared to NT$173.66 billion (US$5.5 billion) last quarter. Assembly and testing service revenue is expected to grow faster at 9 percent to 11 percent sequentially. Gross margin is expected to improve by 0.2 percentage points to 1 percentage point this quarter, from 20.1 percent last quarter.
For its assembly and testing business, gross margin is expected to rise 0.5 percentage points to 1.2 percentage points this quarter from 26 percent last quarter. ASE’s net profit last quarter beat its own predictions, reaching NT$14.15 billion, up 87 percent from NT$7.55 billion a year earlier, but down 4 percent from NT$14.71 billion the previous quarter.
Indian Investors’ Perspective
From an Indian investor’s perspective, ASE’s plans to increase its budget and expand its operations are a positive sign. The company’s focus on advanced packaging technology and its expected growth in LEAP services revenue are indicative of the increasing demand for such technologies in the global market. Indian investors who are looking to invest in the technology sector may want to consider ASE as a potential option.
However, it’s essential to do your own research and consider various factors before making any investment decisions. You can learn more about how to invest in the stock market and stay updated with the latest news and trends in the Indian stock market by visiting our website.
Conclusion
In conclusion, ASE Technology Holding Co’s plans to raise its budget by 20 percent this year are a positive sign for the company and the technology sector as a whole. The company’s focus on advanced packaging technology and its expected growth in LEAP services revenue are indicative of the increasing demand for such technologies in the global market. Indian investors who are looking to invest in the technology sector may want to consider ASE as a potential option.
Remember to always do your own research and consider various factors before making any investment decisions. You can learn more about stock market analysis and stay updated with the latest news and trends in the Indian stock market by visiting our website. Additionally, you can learn more about investing in tech stocks and how to make informed investment decisions.