Q3 2023 ASE Technology Holding Co Ltd Earnings Call
Kenneth Hsiang: Hello, I am Kenneth Hsiang, Head of Investor Relations for ASE Technology Holding Co., Ltd. Welcome to our Q3 2023 earnings release. Thank you for attending our conference call 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 participants do not consent, please disconnect at this time. 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.
Ken Hsiang: Hello, I am Kenneth Hsiang, Head of Investor Relations for ASE Technology Holding Co., Ltd. Welcome to our Q3 2023 earnings release. Thank you for attending our conference call 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 participants do not consent, please disconnect at this time. 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.
Speaker 1: transcript
Speaker 1: Hello, I am Ken Shung, the head of investor relations for ASE Technology Holdings. Welcome to our 3rd quarter 2023 earnings release. Thank you for attending our conference call today.
Hello, I am Ken Shang the head of Investor Relations for ASE Technology Holdings welcomed.
Welcome to our third quarter 2023 earnings release.
You for attending our conference call today.
Speaker 1: transcript
Speaker 1: please refer to our safe harbor notice on page two. All participants consent to having their voices and questions broadcast via participation in this event. If participants do not consent, please disconnect at this time. I would like to remind everyone that the presentation that follows may contain forward-looking statements.
Please refer to our safe Harbor notice on page two.
Ken Chan: Hello, I am Ken Chan, the Head of Investor Relations for ASE Technology Holdings. Welcome to our third quarter 2023 earnings release. Thank you for attending our conference call today.
All participants consent to having their voices and questions broadcast via participation. In this event if participants do not concert. Please disconnect at this time I would like to remind everyone that the presentation that follows may contain forward looking statements.
Ken Chan: Please refer to our Save Harbor Notice on page two. All participants consent to having their voices and questions broadcast via participation in this event. If participants do not consent, please disconnect at this time. 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.
Speaker 1: transcript
Speaker 1: These forward-looking statements are subject to a high degree of risk and our actual results may differ materially.
These forward looking statements are subject to a high degree of risk and our actual results may differ materially for.
Speaker 1: transcript
Speaker 1: 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 presented by our subsidiary using Chinese gas.
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 as presented in accordance with Taiwan ire for Us <unk>.
Kenneth Hsiang: Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese GAAP. I am joined today by Joseph Tung, our CFO. For today's session, I will be giving the prepared remarks. Joseph will then be available to take your questions during the Q&A sessions that follow. The overall environment for our businesses during the Q3 was relatively soft from an historical perspective. Devices related to new communications products introduced during the quarter generated a small pickup in demand. By and large, the post-COVID inventory digestion and suboptimal demand environment continued. For the Q3, both our ATM and EMS businesses saw mild seasonal upticks. Our ATM businesses' results were on the higher side of our expectations. We believe this was primarily attributable to higher than expected unplanned orders.
Ken Hsiang: Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese GAAP. I am joined today by Joseph Tung, our CFO. For today's session, I will be giving the prepared remarks. Joseph will then be available to take your questions during the Q&A sessions that follow. The overall environment for our businesses during the Q3 was relatively soft from an historical perspective. Devices related to new communications products introduced during the quarter generated a small pickup in demand. By and large, the post-COVID inventory digestion and suboptimal demand environment continued. For the Q3, both our ATM and EMS businesses saw mild seasonal upticks. Our ATM businesses' results were on the higher side of our expectations. We believe this was primarily attributable to higher than expected unplanned orders.
Results presented using Taiwan IR for us may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese gap.
Ken Chan: 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 presented by our subsidiary using Chinese gap. I am joined today by Joseph Tung RCFO. For today's session, I will be giving the prepared remarks. Joseph will then be available to take your questions during the Q&A sessions that follows. The overall environment for our businesses during the third quarter was relatively soft from an historical perspective.
Speaker 1: transcript
Speaker 1: I am joined today by Joseph Tong, our CFO . For today's session, I will be giving the prepared remarks. Joseph will then be available to take your questions during the Q&A session that follows.
I am joined today by Joseph Tung, our CFO for today's session I will be giving the prepared remarks. Joseph will then be available to take your questions. During the Q&A session that follows.
Speaker 1: transcript
Speaker 1: The overall environment for our businesses during the third quarter was relatively soft from an historical perspective.
The overall environment for our businesses during the third quarter was relatively soft from an historical perspective divvy.
Speaker 1: transcript
Speaker 1: Devices related to new communications products introduced during the quarter generated a small pickup in demand. But, by and large, the post-COVID inventory digestion and suboptimal demand environment continue.
Devices related to new communications products introduced during the quarter generated a small pickup and demand.
But by and large the post COVID-19 inventory digestion and sub optimal demand environment continued.
Ken Chan: Devices related to new communications products introduced during the quarter generated a small pickup in demand. But by and large, the post-COVID inventory digestion and sub-optimal demand environment continued. For the third quarter, both our ATM and EMS businesses saw mild seasonal objects. Our ATM businesses results were on the higher side of our expectations. We believe this was primarily attributable to higher than expected unplanned orders. In this soft, loading environment, our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed.
Speaker 1: transcript
Speaker 1: For the third quarter, both our ATM and EMS businesses saw mild seasonal upticks. Our ATM businesses results were on the higher side of our expectation.
For the third quarter, both our ATM and EMS businesses saw a mild seasonal upticks or ATM businesses results were on the higher side of our expectations.
Speaker 1: transcript
Speaker 1: We believe this was primarily attributable to higher than expected unplanned orders. In this soft loading environment, our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed.
We believe this was primarily attributable to higher than expected unplanned orders and the soft loading environment, our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed.
Kenneth Hsiang: In this soft loading environment, our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed. We do, to a certain extent, try to apply an unplanned order rate to our outlooks, but for Q3, unplanned orders were a bit higher than expected. These unplanned orders were sporadic, disparate, and not isolated to any particular product type or market segment. For our ATM factories, during the quarter, key equipment utilization rates were still relatively low, averaging out in the mid-60s. Our EMS businesses pickup was slightly below our initial expectation. We believe this was due to some loading being pushed out into Q4. With that, please turn to page three, where you will find our Q3 consolidated results.
Ken Hsiang: In this soft loading environment, our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed. We do, to a certain extent, try to apply an unplanned order rate to our outlooks, but for Q3, unplanned orders were a bit higher than expected. These unplanned orders were sporadic, disparate, and not isolated to any particular product type or market segment. For our ATM factories, during the quarter, key equipment utilization rates were still relatively low, averaging out in the mid-60s. Our EMS businesses pickup was slightly below our initial expectation. We believe this was due to some loading being pushed out into Q4. With that, please turn to page three, where you will find our Q3 consolidated results.
Speaker 1: transcript
Speaker 1: We do, to a certain extent, try to apply an unplanned order rate to our outlooks, but for the third quarter, unplanned orders were a bit higher than expected.
We do to a certain extent tried to apply an unplanned order rate to our outlooks, but for the third quarter unplanned orders were a bit higher than expected.
Speaker 1: transcript
Speaker 1: these unplanned orders were sporadic and disparate and not isolated to any particular product type or market section.
These unplanned orders were sporadic and disparate and not isolated to any particular product type or market segment.
Ken Chan: We do, to a certain extent, try to apply an unplanned order rate to our outlooks, but for the third quarter, unplanned orders were a bit higher than expected. These unplanned orders were sporadic and disparate and not isolated to any particular product type or market segment. For ATM factories during the quarter, key equipment utilization rates were still relatively low averaging out in the mid-60s. Our EMS businesses pickup was slightly below our initial expectation. We believe this was due to some loading being pushed out into the fourth quarter.
Speaker 1: transcript
Speaker 1: For our ATM factories, during the quarter, key equipment utilization rates were still relatively low, averaging out in the mid-60s.
For our ATM factories during the quarter key equipment utilization rates were still relatively low averaging out in the mid sixties.
Speaker 1: transcript
Speaker 1: our EMS businesses pick up was slightly below our initial expectations.
Our EMS businesses pick up was slightly below our initial expectation.
Speaker 1: transcript
Speaker 1: We believe this was due to some loading being pushed out into the fourth quarter.
We believe this was due to some loading being pushed out into the fourth quarter.
Speaker 1: transcript
Speaker 1: With that, please turn to page 3, where you will find our third quarter consolidated results.
With that please turn to page three where you will find our third quarter consolidated results.
Kenneth Hsiang: For Q3, we recorded fully diluted EPS of NT$2 and basic EPS of NT$2.04. Consolidated net revenues increased 13% sequentially and declined 18% year over year. We had a gross profit of TWD 24.9 billion, with a gross margin of 16.2%. Our gross margin improved by 0.2 percentage points sequentially and declined by 3.9 percentage points year over year. The sequential improvement of margin is principally due to higher ATM business loading in the current quarter, offset in part by higher EMS revenue mix. The annual decline in gross margin is principally the result of lower loading during the current downturn. Our operating expenses increased by TWD 1.2 billion sequentially and declined by TWD 0.8 billion annually.
Ken Hsiang: For Q3, we recorded fully diluted EPS of NT$2 and basic EPS of NT$2.04. Consolidated net revenues increased 13% sequentially and declined 18% year over year. We had a gross profit of TWD 24.9 billion, with a gross margin of 16.2%. Our gross margin improved by 0.2 percentage points sequentially and declined by 3.9 percentage points year over year. The sequential improvement of margin is principally due to higher ATM business loading in the current quarter, offset in part by higher EMS revenue mix. The annual decline in gross margin is principally the result of lower loading during the current downturn. Our operating expenses increased by TWD 1.2 billion sequentially and declined by TWD 0.8 billion annually.
Speaker 1: transcript
Speaker 1: For the third quarter, we recorded fully diluted EPS of $2.
For the third quarter, we recorded fully diluted EPS of $2 and basic EPS of $2.04 consolidated net revenues increased 13% sequentially and declined 18% year over year, we had a gross profit of $24 9 billion.
Speaker 1: transcript
Speaker 1: and basic EPS of $2 for such.
Speaker 1: transcript
Speaker 1: Consolidated net revenues increased 13% sequentially and declined 18% year over year. We had a gross profit of $24.9 billion with a gross margin of 16.2%.
Ken Chan: With that, please turn to page three, where you will find our third quarter consolidated results. For the third quarter, we recorded fully diluted EPS of $2, and basic EPS of $2.4. Consolidated net revenues increased 13% sequentially and declined 18% year over year. We had a gross profit of $24.9 billion with a gross margin of 16.2%. Our gross margin improved by 0.2 percentage points sequentially and declined by 3.9 percentage points year over year.
With a gross margin of 16, 2% our gross margin improved by 0.2 percentage points sequentially and declined by three nine percentage points year over year.
Speaker 1: transcript
Speaker 1: Our gross margin improved by 0.2% to 0.2% sequentially and declined by 3.9% to 0.0% over year. The sequential improvement of margin is principally due to higher ATM business loading in the current quarter, offset and part by higher EMS revenue mix.
The sequential improvement of margin is principally due to higher ATM business loading in the current quarter offset impart by higher EMS revenue mix. The annual decline in gross margin is principally the result of lower loading during the current downturn.
Speaker 1: transcript
Speaker 1: the annual decline in gross margin is principally the result of lower loading during the current downturn.
Ken Chan: The sequential improvement of margin is principally due to higher ATM business loading in the current quarter, offset and parked by higher EMS revenue mix. The annual decline in gross margin is principally the result of lower loading during the current downturn. Our operating expenses increased by $1.2 billion sequentially and decline by 0.8 billion annually. The sequential increase in operating expenses are primarily due to higher profit sharing expenses and miscellaneous increases such as DNA, factory supplies and others.
Speaker 1: transcript
Speaker 1: Our operating expenses increased by $1.2 billion sequentially and declined by $0.8 billion annually. The sequential increase in operating expenses are primarily due to higher profit sharing expenses and miscellaneous increases such as DNA, factory supplies, and others.
Our operating expenses increased by $1 $2 billion sequentially and declined by 0.8 billion annually.
Kenneth Hsiang: The sequential increase in operating expenses are primarily due to higher profit-sharing expenses and miscellaneous increases such as D&A, factory supplies, and others. The year-over-year decline was primarily attributable to lower bonus and profit sharing expenses across the company. Our operating expense percentage declined 0.2 percentage points sequentially and increased 1.2 percentage points year-over-year to 8.8%. The sequential operating expense percentage decrease was primarily related to lower salary and bonus costs relative to revenues generated. The annual operating expense increase is primarily due to higher mix of ATM business during the quarter. Operating profit was TWD 11.4 billion, up TWD 2 billion sequentially and down TWD 12.3 billion year-over-year. Operating margin was 7.4%, improving 0.5 percentage points sequentially and declining 5.2 percentage points year-over-year.
Ken Hsiang: The sequential increase in operating expenses are primarily due to higher profit-sharing expenses and miscellaneous increases such as D&A, factory supplies, and others. The year-over-year decline was primarily attributable to lower bonus and profit sharing expenses across the company. Our operating expense percentage declined 0.2 percentage points sequentially and increased 1.2 percentage points year-over-year to 8.8%. The sequential operating expense percentage decrease was primarily related to lower salary and bonus costs relative to revenues generated. The annual operating expense increase is primarily due to higher mix of ATM business during the quarter. Operating profit was TWD 11.4 billion, up TWD 2 billion sequentially and down TWD 12.3 billion year-over-year. Operating margin was 7.4%, improving 0.5 percentage points sequentially and declining 5.2 percentage points year-over-year.
Sequential increase in operating expenses are primarily due to higher profit sharing expenses and miscellaneous increases such as DNA factories supply and others.
Speaker 1: transcript
Speaker 1: The year over year decline was primarily attributable to lower bonus and profit sharing expenses across the company.
The year over year decline was primarily attributable to lower bonus and profit sharing expenses across the company.
Our operating expense percentage declined 0.2 percentage points sequentially.
Speaker 1: transcript
Speaker 1: Our operating expense percentage declined 0.2 percentage points sequentially and increased 1.2 percentage points year over year to 8.8%.
And increased one two percentage points year over year to eight 8% the.
Ken Chan: The year-over-year decline was primarily attributable to lower bonus and profit sharing expenses across the company. Our operating expense percentage declined 0.2 percentage points sequentially and increased 1.2 percentage points year-over-year to 8.8%. The sequential operating expense percentage decrease was primarily related to lower salary and bonus costs relative to revenues generated. The annual operating expense increase is primarily due to higher mix of ATM business during the quarter. Operating profit was 11.4 billion up to billion sequentially and down to all 0.3 billion year-over-year.
Speaker 1: transcript
Speaker 1: The sequential operating expense percentage decrease was primarily related to lower salary and bonus costs.
The sequential operating expense percentage decrease was primarily related to lower salary and bonus costs.
Speaker 1: transcript
Speaker 1: relative to revenues generated. The annual operating expense increase is primarily due to higher mix of ATM business during the quarter.
Relative to revenues generated the annual operating expense increase is primarily due to higher mix of ATM business during the quarter.
Speaker 1: transcript
Speaker 1: Operating profit was 11.4 billion, up to billion sequentially, and down to all 0.3 billion year over year. Operating margin was 7.4% improving 0.5% of the percentage point sequentially, and declining 5.2% of the percentage points year over year. During the quarter, we had a net non-operating gain of 0.8 billion dollars.
Operating profit was $11 4 billion up 2 billion sequentially and down $12 3 billion year over year operating margin was seven 4%, improving 0.5 percentage points sequentially and declining five two percentage points year over year.
Kenneth Hsiang: During the quarter, we had a net non-operating gain of TWD 0.8 billion. Our non-operating gain for the quarter primarily consists of net foreign exchange hedging activities, profits from associates, and other non-operating income, offset by net interest expense of TWD 1.2 billion. Tax expense for the quarter was TWD 2.9 billion, net of a one-time capital gain tax of TWD 0.7 billion. Our effective tax rate was 18.1%. We believe our full year effective tax rate to still be about 21%. Net income for the quarter was TWD 8.7 billion, representing an increase of TWD 1.1 billion sequentially and a decline of TWD 8.8 billion year over year. The NT dollar depreciated 2.9% against the US dollar sequentially during Q3 and 4.5% annually.
Ken Hsiang: During the quarter, we had a net non-operating gain of TWD 0.8 billion. Our non-operating gain for the quarter primarily consists of net foreign exchange hedging activities, profits from associates, and other non-operating income, offset by net interest expense of TWD 1.2 billion. Tax expense for the quarter was TWD 2.9 billion, net of a one-time capital gain tax of TWD 0.7 billion. Our effective tax rate was 18.1%. We believe our full year effective tax rate to still be about 21%. Net income for the quarter was TWD 8.7 billion, representing an increase of TWD 1.1 billion sequentially and a decline of TWD 8.8 billion year over year. The NT dollar depreciated 2.9% against the US dollar sequentially during Q3 and 4.5% annually.
During the quarter, we had a net nonoperating gain of zero point $8 billion.
Ken Chan: Operating margin was 7.4% improving 0.5 percentage points sequentially and declining 5.2 percentage points year-over-year. During the quarter, we had a net non-operating gain of 0.8 billion dollars. Our non-operating gain for the quarter primarily consists of net foreign exchange hedging activities, profits from associates and other non-operating income offset by net interest expense of 1.2 billion dollars. Tax expense for the quarter was 2.9 billion dollars. Net of a one-time capital gain tax of 0.7 billion dollars, our effective tax rate was 18.1%.
Speaker 1: transcript
Speaker 1: Our non-operating gain for the quarter primarily consists of net foreign exchange hedging activities, profits from associates, and other non-operating income offset by net interest expense of $1.2 billion.
Our non operating gains for the quarter, primarily consists of net foreign exchange hedging activities profits from associates and other nonoperating income offset by net interest expense of $1 2 billion.
Speaker 1: transcript
Speaker 1: Tax expense for the quarter was $2.9 billion. Net of a one-time capital gain tax of $0.7 billion, our effective tax rate was 18.1%.
Tax expense for the quarter was $2 9 billion net of a one time capital gain tax of zero point $7 billion, our effective tax rate was 18, 1%.
Speaker 1: transcript
Speaker 1: we believe our full year effective tax rate to still be about 21 percent.
We believe our full year effective tax rate to still be about 21%.
Speaker 1: transcript
Speaker 1: Net income for the quarter was $8.7 billion representing an increase of 1.1 billion sequentially and a decline of $8.8 billion year over year. The NT dollar depreciated 2.9% against the US dollar sequentially during the third quarter and 4.5% annual.
Net income for the quarter was $8 7 billion, representing an increase of $1 1 billion sequentially and a decline of eight 8 billion year over year.
Ken Chan: We believe our full year-effective tax rate to still be about 21%. Net income for the quarter was 8.7 billion dollars representing an increase of 1.1 billion sequentially and a decline of 8.8 billion year-over-year. The NT dollar depreciated 2.9% against the US dollar sequentially during the third quarter and 4.5% annually. From a sequential perspective, we estimate the NT dollar depreciation had a 0.8 percentage point positive impact to the company's gross and operating margins.
The NT dollar depreciated, 2.9% against the U S dollar sequentially during the third quarter and 4.5% annually.
Kenneth Hsiang: From a sequential perspective, we estimate the NT dollar depreciation had a 0.8 percentage point positive impact to the company's gross and operating margins. From a year-over-year perspective, we estimate that the depreciating NT dollar had a 1.2 percentage point positive impact to gross and operating margins. As a rule of thumb, for every percent the NT dollar appreciates, we see a corresponding 0.27 percentage point impact to our holding company gross margin. On the bottom of the page, we provide key P&L line items without the inclusion of PPA related expenses. Consolidated gross profit excluding PPA expenses would be TWD 25.8 billion, with a 16.8% gross margin. Operating profit would be TWD 12.6 billion with an operating margin of 8.2%.
Ken Hsiang: From a sequential perspective, we estimate the NT dollar depreciation had a 0.8 percentage point positive impact to the company's gross and operating margins. From a year-over-year perspective, we estimate that the depreciating NT dollar had a 1.2 percentage point positive impact to gross and operating margins. As a rule of thumb, for every percent the NT dollar appreciates, we see a corresponding 0.27 percentage point impact to our holding company gross margin. On the bottom of the page, we provide key P&L line items without the inclusion of PPA related expenses. Consolidated gross profit excluding PPA expenses would be TWD 25.8 billion, with a 16.8% gross margin. Operating profit would be TWD 12.6 billion with an operating margin of 8.2%.
Speaker 1: transcript
Speaker 1: From a sequential perspective, we estimate the NT dollar depreciation had a 0.8 percentage point positive impact to the company's gross and operating margin.
From a sequential perspective, we estimate the NT dollar depreciation had a 0.8 percentage point positive impact to the company's gross and operating margins.
Speaker 1: transcript
Speaker 1: From a year over year perspective, we estimate that the depreciating NT dollar had a 1.2 percentage point positive impact to gross and operating margin.
From a year over year perspective, we estimate that the depreciating NT dollar had a one two percentage point positive impact to gross and operating margins.
Speaker 1: transcript
Speaker 1: As a rule of thumb, for every percent the NT dollar appreciates, we see a corresponding 0.27 percentage point impact to our holding company gross margin.
As a rule of thumb for every percent the NT dollar appreciates, we see a corresponding 0.27 percentage point impact to our holding company gross margin.
Ken Chan: From a year-over-year perspective, we estimate that the depreciating NT dollar had a 1.2 percentage point positive impact to gross and operating margins. As a role of thumb, for every percent of the NT dollar appreciates, we see a corresponding 0.27 percentage point impact to our holding company gross margin. On the bottom of the page, we provide key PNL line items without the inclusion of PTA-related expenses. Because solidated gross profit excluding PPA expenses would be $25.8 billion with a 16.8% gross margin. Operating profit would be $12.6 billion with an operating margin of 8.2%. Net profit would be $9.9 billion with a net margin of 6.4%. Basic EPS excluding PPA expenses would be $2.31.
Speaker 1: transcript
Speaker 1: On the bottom of the page, we provide key P&L line items without the inclusion of PPA-related expenses.
On the bottom of the page, we provide key P&L line items without the inclusion of PPA related expenses.
Speaker 1: transcript
Speaker 1: consolidated gross profit excluding PPA expenses would be $25.8 billion with a 16.8% gross margin.
Solidago gross profit, excluding PPA expenses would be $25 8 billion with a 16, 8% gross margin.
Speaker 1: transcript
Speaker 1: Operating profit would be 12.6 billion with an operating margin of 8.2%.
Operating profit would be $12 6 billion with an operating margin of eight 2%.
Kenneth Hsiang: Net profit would be TWD 9.9 billion with a net margin of 6.4%. Basic EPS excluding PPA expenses would be $2.31. On page four is a graphical presentation of our consolidated financial performance. As you can see here, the current correction appears to have had a stronger impact on our ATM business than our EMS business. Our traditionally strong Q3 ATM revenues are just now near our Q1 2022 levels. On page five is our ATM P&L. It is worth noting here that the ATM revenue reported contains revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses.
Ken Hsiang: Net profit would be TWD 9.9 billion with a net margin of 6.4%. Basic EPS excluding PPA expenses would be $2.31. On page four is a graphical presentation of our consolidated financial performance. As you can see here, the current correction appears to have had a stronger impact on our ATM business than our EMS business. Our traditionally strong Q3 ATM revenues are just now near our Q1 2022 levels. On page five is our ATM P&L. It is worth noting here that the ATM revenue reported contains revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses.
Speaker 1: transcript
Speaker 1: Net profit would be 9.9 billion with a net margin of 6.4%. Basic EPS excluding PPA expenses would be $2.31.
Net profit would be $9 9 billion with a net margin of six 4% basic EPS, excluding PPA expenses would be $2 31.
Speaker 1: transcript
Speaker 1: On page four is a graphical presentation of our consolidated financial performance.
On page four is a graphical presentation of our consolidated financial performance.
Speaker 1: transcript
Speaker 1: As you can see here, the current correction appears to have had a stronger impact on our ATM business than our EMS business.
As you can see here. The current correction appears to have had a stronger impact on our ATM business than our EMS business. Our traditional is strong third quarter ATM revenues are just now near our first quarter 2022 levels.
Ken Chan: On page 4 is a graphical presentation of our consolidated financial performance. As you can see here, the current correction appears to have had a stronger impact on our ATM business than our EMS business. Our traditionally strong third quarter ATM revenues are just now near our first quarter 2022 levels.
Speaker 1: transcript
Speaker 1: Our traditional is strong third quarter, ATM revenues, just now near our first quarter, 2022 month.
Speaker 1: transcript
Speaker 1: On page five is our ATM P&L.
On page five is our ATM P&L.
Speaker 1: transcript
Speaker 1: It is worth noting here that the ATM revenue reported contains revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses.
It is worth noting here that the ATM revenue reported contains revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses.
Ken Chan: On page 5 is our ATM PNL. It is worth noting here that the ATM revenue reported contains revenue eliminated at the holding company level related to enter company transactions between our ATM and EMS businesses. For the third quarter 2023 revenues for ATM business were 83.7 billion up 7.6 billion from the previous quarter and down 15.1 billion from the same period last year. This represents a 10% improvement sequentially and a 15.3% decline annually.
Kenneth Hsiang: For Q3 2023, revenues for our ATM business were TWD 83.7 billion, up TWD 7.6 billion from the previous quarter and down TWD 15.1 billion from the same period last year. This represents a 10% improvement sequentially and a 15.3% decline annually. Gross profit for our ATM business was TWD 18.6 billion, up TWD 2.4 billion sequentially and down TWD 10.2 billion year over year. Gross profit margin for our ATM business was 22.2%, up 1 percentage point sequentially and down 7 percentage points year over year. Gross margin was on the higher side of our expectations. The sequential margin improvement is the result of improved scales of efficiency from higher loading, offset in part by slightly higher summer utility consumption and outsourced services.
Ken Hsiang: For Q3 2023, revenues for our ATM business were TWD 83.7 billion, up TWD 7.6 billion from the previous quarter and down TWD 15.1 billion from the same period last year. This represents a 10% improvement sequentially and a 15.3% decline annually. Gross profit for our ATM business was TWD 18.6 billion, up TWD 2.4 billion sequentially and down TWD 10.2 billion year over year. Gross profit margin for our ATM business was 22.2%, up 1 percentage point sequentially and down 7 percentage points year over year. Gross margin was on the higher side of our expectations. The sequential margin improvement is the result of improved scales of efficiency from higher loading, offset in part by slightly higher summer utility consumption and outsourced services.
Speaker 1: transcript
Speaker 1: For the third quarter 2023 revenues for ATM business were 83.7 billion up 7.6 billion from the previous quarter and down 15.1 billion from the same period last year. This represents a 10% improvement sequentially and a 15.3% decline annually.
For the third quarter 2023 revenues for our ATM business were $83 7 billion up seven 6 billion from the previous quarter and down 15.1 billion from the same period last year.
This represents a 10% improvement sequentially and a 15, 3% decline annually.
Speaker 1: transcript
Speaker 1: Gross profit for our ATM business was $18.6 billion, up $2.4 billion sequentially, and down $10.2 billion year over year.
Gross profit for our ATM business was $18 6 billion up $2 4 billion sequentially and down $10 2 billion year over year.
Speaker 1: transcript
Speaker 1: Gross profit margin for ATM business was 22.2%, up 1 percentage point sequentially, and down 7 percentage points year over year.
Gross profit margin for our ATM. This dose was 22, 2% up one percentage point sequentially and down seven percentage points year over year.
Ken Chan: Gross profit for ATM business was 18.6 billion up 2.4 billion sequentially and down 10.2 billion year over year. Gross profit margin for ATM business was 22.2%. Up 1% sequentially and down 7% each points year over year. Gross margin was on the higher side of our expectations. The sequential margin improvement is the result of improved scales of efficiency from higher loading offset in part by slightly higher summer utility consumption and outsourced services.
Speaker 1: transcript
Speaker 1: Gross margin was on the higher side of our expectation.
Gross margin was on the higher side of our expectations.
Speaker 1: transcript
Speaker 1: The sequential margin improvement is the result of improved scales of efficiency from higher loading offset in part by slightly higher summer utility consumption and outsourced services.
The sequential margin improvement is the result of improved scales of efficiency from higher loading offset in part by slightly higher summer utility consumption and outsourced services.
Kenneth Hsiang: While the annual margin decline is primarily the result of lower loading due to the current downturn. During Q3, operating expenses were $9.8 billion, up $1 billion sequentially and down $0.4 billion year-over-year. The sequential increase in operating expenses was primarily driven by higher compensation-based expenses and higher R&D related factory supplies. The annual operating expense decline was driven primarily by lower profit sharing and bonus, offset in part by higher R&D related costs. Our operating expense percentage for the quarter was 11.7%, up 0.2 percentage points sequentially and up 1.4 percentage points annually. Sequential operating expense percentage increased as a result of higher R&D and compensation related costs. The annual increase was due to lower loading and thus lower operating leverage.
Ken Hsiang: While the annual margin decline is primarily the result of lower loading due to the current downturn. During Q3, operating expenses were $9.8 billion, up $1 billion sequentially and down $0.4 billion year-over-year. The sequential increase in operating expenses was primarily driven by higher compensation-based expenses and higher R&D related factory supplies. The annual operating expense decline was driven primarily by lower profit sharing and bonus, offset in part by higher R&D related costs. Our operating expense percentage for the quarter was 11.7%, up 0.2 percentage points sequentially and up 1.4 percentage points annually. Sequential operating expense percentage increased as a result of higher R&D and compensation related costs. The annual increase was due to lower loading and thus lower operating leverage.
Speaker 1: transcript
Speaker 1: while the annual margin decline is primarily the result of lower loading due to the current downter.
While the annual margin decline is primarily the result of lower loading due to the current downturn.
Speaker 1: transcript
Speaker 1: During the third quarter, operating expenses were $9.8 billion, up one billion sequentially and down 0.4 billion year over year. The sequential increase in operating expenses was primarily driven by higher compensation-based expenses and higher R&D-related factory supplies.
During the third quarter operating expenses were $9 $8 billion up $1 billion sequentially and down <unk> 4 billion year over year.
Ken Chan: While the annual margin decline is primarily the result of lower loading due to the current downturn. During the third quarter operating expenses were 9.8 billion dollars up 1 billion sequentially and down 0.4 billion year over year. The sequential increase in operating expenses was primarily driven by higher compensation based expenses and higher R&D related factory supplies. The annual operating expense decline was driven primarily by lower profit sharing and bonus offset in part by higher R&D related costs.
The sequential increase in operating expenses was primarily driven by higher compensation based expenses and higher R&D related factory supplies.
Speaker 1: transcript
Speaker 1: The annual operating expense decline was driven primarily by lower profit sharing and bonus, offset and part by higher R&D related costs.
The annual operating expense decline was driven primarily by lower profit sharing and bonus offset impart by higher R&D related costs.
Speaker 1: transcript
Speaker 1: Our operating expense percentage for the quarter was 11.7% up 0.2% of points sequentially, and up 1.4% points annually.
Our operating expense percentage for the quarter was 11, 7% up 0.2 percentage points sequentially and up one four percentage points annually.
Speaker 1: transcript
Speaker 1: Sequential operating expense percentage increased as a result of higher R&D and compensation-related costs. The annual increase was due to lower loading and thus lower operating leverage.
Sequential operating expense percentage increased as a result of higher R&D and compensation related costs. The annual increase was due to lower loading and thus lower operating leverage.
Ken Chan: Our operating expense percentage for the quarter was 11.7% up 0.2 percentage points sequentially and up 1.4 percentage points annually. The sequential operating expense percentage increased as a result of higher R&D and compensation-related costs. The annual increase was due to lower loading and thus lower operating leverage. During the third quarter, operating profit was $8.8 billion, representing an increase of $1.4 billion over quarter and a decline of $9.9 billion year over year. Operating margin was 10.5% improving 0.8 percentage points sequentially and declining 8.4 percentage points year over year.
Kenneth Hsiang: During Q3, operating profit was TWD 8.8 billion, representing an increase of TWD 1.4 billion quarter-over-quarter and a decline of TWD 9.9 billion year-over-year. Operating margin was 10.5%, improving 0.8 percentage points sequentially and declining 8.4 percentage points year-over-year. For foreign exchange, we estimate that the NT dollar to US dollar exchange rate had a +1.4 percentage point impact on our ATM sequential margins and a +2.2 percentage point impact on a year-over-year basis. Without the impact of PPA related depreciation and amortization, ATM gross profit margin would be 23.3% and operating profit margin would be 11.9%. On page six, you'll find a graphical representation of our ATM P&L.
Ken Hsiang: During Q3, operating profit was TWD 8.8 billion, representing an increase of TWD 1.4 billion quarter-over-quarter and a decline of TWD 9.9 billion year-over-year. Operating margin was 10.5%, improving 0.8 percentage points sequentially and declining 8.4 percentage points year-over-year. For foreign exchange, we estimate that the NT dollar to US dollar exchange rate had a +1.4 percentage point impact on our ATM sequential margins and a +2.2 percentage point impact on a year-over-year basis. Without the impact of PPA related depreciation and amortization, ATM gross profit margin would be 23.3% and operating profit margin would be 11.9%. On page six, you'll find a graphical representation of our ATM P&L.
Speaker 1: transcript
Speaker 1: During the third quarter, operating profit was 8.8 billion, representing an increase of 1.4 billion, quarter over quarter, and a decline of 9.9 billion year over year. Operating margin was 10.5% improving 0.8% to points sequentially, and declining 8.4% to points year over year.
During the third quarter operating profit was $8 8 billion, representing an increase of $1 4 billion quarter over quarter and a decline of 9.9 billion year over year.
Operating margin was 10, 5%, improving 0.8 percentage points sequentially and declining eight four percentage points year over year.
Speaker 1: transcript
Speaker 1: For foreign exchange, we estimate that the MTA to US dollar exchange rate had a positive 1.4 percentage point impact on our ATM sequential margins and a positive 2.2 percentage point impact on a year over year base.
For foreign exchange, we estimate that the empty to U S. Dollar exchange rate had a positive one four percentage point impact on our Atms sequential margins and a positive two two percentage point impact on a year over year basis.
Ken Chan: For foreign exchange, we estimate that the MTA to US dollar exchange rate had a positive 1.4 percentage point impact on our ATM sequential margins and a positive 2.2 percentage point impact on a year over year basis. Without the impact of PPA-related depreciation and amortization, ATM gross profit margin would be 23.3% and operating profit margin would be 11.9%.
Speaker 1: transcript
Speaker 1: Without the impact of PPA related depreciation and amortization ATM gross profit margin would be 23.3% and operating profit margin would be 11.9%.
Without the impact of PPA related depreciation and amortization.
<unk> gross profit margin would be 23, 3% and operating profit margin would be 11.9%.
Speaker 1: transcript
Speaker 1: On page six, you'll find a graphical representation of our ATM P&L. Revenues and their corresponding scaled efficiency are still a ways off from previous 2022.
On page six youll find a graphical representation of our ATM P&L revenues and their corresponding scaled efficiency are still a ways off from previous 2022 peaks.
Kenneth Hsiang: Revenues and their corresponding scaled efficiency. Are still a ways off from previous 2022 peaks. On page 7 is our ATM revenue by market segment. You can see here the seasonal pickup of some communications products during the quarter. We also saw a smaller pickup in our computing segment. Our automotive, consumer, and other market segment declined on a relative and absolute basis. We believe this decline to be out of character for the seasonally strong Q3. However, it is indicative of the current softness in demand. On page 8, you will find our ATM revenue by service type. You can see here that we are experiencing a stronger pickup in our advanced packaging services, which includes bumping and flip chip. Our wire bonding and test business saw their relative shares decline during the quarter.
Ken Hsiang: Revenues and their corresponding scaled efficiency. Are still a ways off from previous 2022 peaks. On page 7 is our ATM revenue by market segment. You can see here the seasonal pickup of some communications products during the quarter. We also saw a smaller pickup in our computing segment. Our automotive, consumer, and other market segment declined on a relative and absolute basis. We believe this decline to be out of character for the seasonally strong Q3. However, it is indicative of the current softness in demand. On page 8, you will find our ATM revenue by service type. You can see here that we are experiencing a stronger pickup in our advanced packaging services, which includes bumping and flip chip. Our wire bonding and test business saw their relative shares decline during the quarter.
Speaker 1: transcript
Speaker 1: On page seven is our ATM revenue by market sector.
On page seven is our ATM revenue by market segment.
Ken Chan: On page 6, you'll find a graphical representation of our ATM P&L revenues and their corresponding scaled efficiency are still ways off from previous 2022 peaks.
Speaker 1: transcript
Speaker 1: You can see here the seasonal pickup of some communications products during the quarter.
You can see here the seasonal pickup of some communications products during the quarter.
Speaker 1: transcript
Speaker 1: We also saw a smaller pickup in our computing set.
We also saw a smaller pickup in our computing segment.
Ken Chan: On page 7 is our ATM revenue by market segment. You can see here the seasonal pickup of some communications products during the quarter. We also saw a smaller pickup in our computing segment. Our automotive consumer and other market segment declined on a relative and absolute basis. We believe this decline to be out of character for the seasonally strong third quarter. However, it is indicative of the current softness in demand.
Speaker 1: transcript
Speaker 1: our automotive consumer and other market segment declined on a relative and absolute base.
Our automotive consumer and other market segment declined on a relative and absolute basis.
Speaker 1: transcript
Speaker 1: We believe this decline to be out of character for the seasonally strong third quarter. However, it is indicative of the current softness and demand.
We believe this decline to be out of character for the seasonally strong third quarter. However, it is indicative of the current softness in demand.
Speaker 1: transcript
Speaker 1: On page 8, you will find our ATM revenue by service type. You can see here that we are experiencing a stronger pickup in our advanced packaging services, which includes bumping and flip chips.
On page eight you will find our ATM revenue by service type you can see here that we are experiencing a stronger pickup in our advanced packaging services, which includes bumping and flip chip.
Speaker 1: transcript
Speaker 1: Our wire bonding and test business saw their relative shares to climb during the quarter. It is worth noting that on an absolute dollar base.
Ken Chan: On page 8, you'll find our ATM revenue by service type. You can see here that we are experiencing a stronger pickup in our advanced packaging services which includes bumping and flip chip. Our wire bonding and test business saw their relative shares decline during the quarter. It is worth noting that on an absolute dollar basis, both wire bond and test service types increased revenues.
Our wire bonding and test business saw their relative share has declined during the quarter. It is worth noting that on an absolute dollar basis.
Kenneth Hsiang: It is worth noting that on an absolute dollar basis, both wire bond and test service types increased in revenues. On page 9, you can see the Q3 results of our EMS business and a graphical representation of its market segment allocation. During the quarter, EMS revenues were TWD 71 billion, improving TWD 10.6 billion or 18% sequentially, and declining TWD 19.7 billion or 22% year-over-year. Sequential revenue increase is primarily attributable to the seasonal nature of our EMS business, while the year-over-year revenue decline is primarily due to the broad-based soft electronics demand environment. Sequentially, our EMS business' gross margin declined 0.2 percentage points to 9.1%, while our operating margin improved 0.4 percentage points to 3.9%. The operating margin improvements were driven primarily by loading and favorable foreign exchange impacts to raw materials.
Ken Hsiang: It is worth noting that on an absolute dollar basis, both wire bond and test service types increased in revenues. On page 9, you can see the Q3 results of our EMS business and a graphical representation of its market segment allocation. During the quarter, EMS revenues were TWD 71 billion, improving TWD 10.6 billion or 18% sequentially, and declining TWD 19.7 billion or 22% year-over-year. Sequential revenue increase is primarily attributable to the seasonal nature of our EMS business, while the year-over-year revenue decline is primarily due to the broad-based soft electronics demand environment. Sequentially, our EMS business' gross margin declined 0.2 percentage points to 9.1%, while our operating margin improved 0.4 percentage points to 3.9%. The operating margin improvements were driven primarily by loading and favorable foreign exchange impacts to raw materials.
Speaker 1: transcript
Speaker 1: Both wire bond and test service types increased in revenue.
Both wire bond and test service types increased in revenues.
Speaker 1: transcript
Speaker 1: On page 9, you can see the third quarter results of our EMS business and a graphical representation of its market segment allocation.
On page nine you can see the third quarter results of our EMS business and a graphical representation of its market segment allocation.
Speaker 1: transcript
Speaker 1: During the quarter, EMS revenues were $71 billion improving 10.6 billion or 18% sequentially, and declining 19.7 billion or 22% year over year. Sequential revenue increase is primarily attributable to the seasonal nature of our EMS business. While the year over year revenue decline is primarily due to the broad-based soft electronic demand environment.
During the quarter EMS revenues were $71 billion, improving $10 6 billion or 18% sequentially and declining 19, 7 billion or 22% year over year sequential revenue increase is primarily attributable to the seasonal nature of our <unk>.
Ken Chan: On page 9, you can see the third quarter results of our EMS business and a graphical representation of its market segment allocation. During the quarter, EMS revenues were 71 billion dollars improving 10.6 billion or 18% sequentially and declining 19.7 billion or 22% year over year. Sequential revenue increase is primarily attributable to the seasonal nature of our EMS business while the year over year revenue decline is primarily due to the broad based soft electronics demand environment.
EMS business, while the year over year revenue decline is primarily due to the broad based soft electronics demand environment.
Sequentially, our EMS businesses gross margin decline 0.2 percentage points to nine 1%, while our operating margin improved 0.4 percentage points to three 9%.
Speaker 1: transcript
Speaker 1: Sequentially, our EMS business is gross margin decline, 0.2 percentage points to 9.1 percent, while our operating margin improved 0.4 percentage points to 3.9 percent.
Ken Chan: Sequentially, our EMS businesses gross margin decline 0.2 percentage points to 9.1% while our operating margin improved 0.4 percentage points to 3.9%. The operating margin improvements were driven primarily by loading and favorable foreign exchange impacts to raw materials. Our EMS third quarter operating profit was 2.8 billion of 0.7 billion sequentially and down 2.3 billion annually. We have a lot of segments declined on a relative basis. And while the automotive segment lost relative share, it grew during the quarter by 7% on an absolute dollar basis. From a full year perspective, we continue to expect our automotive market segment to outperform other segments.
Speaker 1: transcript
Speaker 1: The operating margin improvements were driven primarily by loading and favorable foreign exchange impacts to raw material.
The operating margin improvements were driven primarily by loading and favorable foreign exchange impacts to raw materials.
Kenneth Hsiang: Our EMS Q3 operating profit was $2.8 billion, up $0.7 billion sequentially, and down $2.3 billion annually. For our EMS market segment, our consumer segment picked up seasonally as industrial and automotive segments declined on a relative basis. While the automotive segment lost relative share, it grew during the quarter by 7% on an absolute dollar basis. From a full year perspective, we continue to expect our automotive market segment to outperform other segments. On page 10, you will find key line items from our balance sheet. At the end of Q3, we had cash and cash equivalents, and current financial assets of $71.9 billion. Our total interest-bearing debt was down $32.1 billion to $219.2 billion. Total unused credit lines amounted to $347 billion.
Ken Hsiang: Our EMS Q3 operating profit was $2.8 billion, up $0.7 billion sequentially, and down $2.3 billion annually. For our EMS market segment, our consumer segment picked up seasonally as industrial and automotive segments declined on a relative basis. While the automotive segment lost relative share, it grew during the quarter by 7% on an absolute dollar basis. From a full year perspective, we continue to expect our automotive market segment to outperform other segments. On page 10, you will find key line items from our balance sheet. At the end of Q3, we had cash and cash equivalents, and current financial assets of $71.9 billion. Our total interest-bearing debt was down $32.1 billion to $219.2 billion. Total unused credit lines amounted to $347 billion.
Speaker 1: transcript
Speaker 1: Our EMS third quarter operating profit was 2.8 billion of 0.7 billion sequentially and down 2.3 billion annually.
Our EMS third quarter operating profit was $2 8 billion up 0.7 billion sequentially and down $2 3 billion annually.
Speaker 1: transcript
Speaker 1: For our EMS market segment, our consumer segment picked up seasonally as industrial and automotive segments declined on a relative basis.
For our EMS market segment.
Consumer segment picked up seasonally as industrial and automotive segments declined on a relative basis.
Speaker 1: transcript
Speaker 1: And while the automotive segment lost relative share, it grew during the quarter by 7% on an absolute dollar basis.
And while the automotive segment loss relative share it grew during the quarter by 7% on an absolute dollar basis from a full year perspective, we continue to expect our automotive markets up it to outperform other cycle.
Speaker 1: transcript
Speaker 1: From a full year perspective, we continue to expect our automotive market summit to help perform other sex.
On page 10, you will find key line items from our balance sheet.
Speaker 1: transcript
Speaker 1: On page 10 you will find key line items from our balance sheet.
Speaker 1: transcript
Speaker 1: At the end of the third quarter, we had cash and cash equivalents and current financial assets of $71.9 billion. Our total interest bearing debt was down $32.1 billion to $219.2 billion.
At the end of the third quarter, we had cash and cash equivalents and current financial assets of $71 $9 billion.
Our total interest bearing debt was down $32 1 billion to $219 2 billion total unused credit lines amounted to $347 billion, our EBITDA for the quarter was 27 8 billion.
Ken Chan: On page 10, you will find key line items from our balance sheet. At the end of the third quarter, we had cash and cash and equivalent and current financial assets of 71.9 billion dollars. Our total interest bearing debt was down 32.1 billion to 219.2 billion. Total unused credit lines amounted to 347 billion dollars. Our EBITDA for the quarter was 27.8 billion. As mentioned in our previous quarter, our net debt to equate this quarter was up as a result of cash usage for annual dividend payment.
Speaker 1: transcript
Speaker 1: Total unused credit lines amounted to $347 billion. Our EBITDAF for the quarter was 27.8 billion.
Kenneth Hsiang: Our EBITDA for the quarter was TWD 27.8 billion. As mentioned in our previous quarter, our net debt to equity this quarter was up as a result of cash usage for our annual dividend payment. On page 11, you will find our equipment capital expenditures. Machinery and equipment capital expenditures for Q3 in US dollars totaled $239 million, of which $121 million were used in packaging operations, $89 million in test operations, $28 million in EMS operations, and $1 million in interconnect material operations, and others. Current quarter EBITDA of $0.9 billion US dollars continues significantly to outpace our equipment capital expenditures of $0.2 billion dollars.
Ken Hsiang: Our EBITDA for the quarter was TWD 27.8 billion. As mentioned in our previous quarter, our net debt to equity this quarter was up as a result of cash usage for our annual dividend payment. On page 11, you will find our equipment capital expenditures. Machinery and equipment capital expenditures for Q3 in US dollars totaled $239 million, of which $121 million were used in packaging operations, $89 million in test operations, $28 million in EMS operations, and $1 million in interconnect material operations, and others. Current quarter EBITDA of $0.9 billion US dollars continues significantly to outpace our equipment capital expenditures of $0.2 billion dollars.
Speaker 1: transcript
Speaker 1: As mentioned in our previous quarter, our net debt to equity this quarter was of as a result of cash usage for annual dividend payments.
As mentioned in our previous quarter, our net debt to equity this quarter was up as a result of the cash usage for annual dividend payments.
Speaker 1: transcript
Speaker 1: On page 11, you will find our Equipment Capital expenditures, Machinery and Equipment Capital expenditures for the third quarter and US dollars totaled 239 million, of which 121 million were used in packaging operations, 89 million in test operations, 28 million in EMS operations, and 1 million in interconnect material operations and others.
On page 11, you will find our equipment capital expenditures machinery and equipment capital expenditures for the third quarter in U S dollars totaled $239 million of which $121 million were used in packaging operations $89 million and test operation.
Ken Chan: On page 11, you will find our equipment capital expenditures, machinery and equipment capital expenditures for the third quarter and US dollars totaled 239 million of which 121 million were used in packaging operations, 89 million in test operations, 28 million in EMS operations and 1 million interconnect material operations and others. Current quarter EBITDA of 0.9 billion US dollars continues significantly to outpace our equipment capital expenditures of 0.2 billion dollars. It is worth noting that with more excitement surrounding AI, our leading edge advanced packages in our vertically integrated or VI pack offerings are getting a lot more attention from our shareholders as well as our customers.
<unk> $28 million.
S operations, and 1 million in interconnect material operations and others.
Speaker 1: transcript
Speaker 1: Current quarter EBITDA of $0.9 billion US dollars continues significantly to outpace our equipment capital expenditures of $0.2 billion.
Current quarter EBITA of 0.9 billion U S dollars continues significantly to outpace our equipment capital expenditures of zero point $2 billion.
Kenneth Hsiang: It is worth noting that with more excitement surrounding AI, our leading-edge advanced packages in our vertically integrated or VIPack offerings are getting a lot more attention from our shareholders as well as our customers. At this point, we are expecting incremental customer adoptions of our fan-out and interposer-based solutions, along with increasing collaborations with upstream foundry partners on leading-edge advanced packaging. As a result, we will be making incremental investments to support these businesses subject to financially justifiable returns. While revenues related to these products are relatively small, representing a low single-digit percentage of ATM revenues, we believe we see significant growth opportunities in the coming year. We are in October now, and the year is almost done. Much of the original wafer banks for our ATM business still remain to be addressed.
Ken Hsiang: It is worth noting that with more excitement surrounding AI, our leading-edge advanced packages in our vertically integrated or VIPack offerings are getting a lot more attention from our shareholders as well as our customers. At this point, we are expecting incremental customer adoptions of our fan-out and interposer-based solutions, along with increasing collaborations with upstream foundry partners on leading-edge advanced packaging. As a result, we will be making incremental investments to support these businesses subject to financially justifiable returns. While revenues related to these products are relatively small, representing a low single-digit percentage of ATM revenues, we believe we see significant growth opportunities in the coming year. We are in October now, and the year is almost done. Much of the original wafer banks for our ATM business still remain to be addressed.
Speaker 1: transcript
Speaker 1: It is worth noting that with more excitement surrounding AI, our leading edge advanced packages in our vertically integrated or the IPAC offering.
It is worth noting that with more excitement surrounding AI are leading edge advanced packages in our vertically integrated or the AIPAC offerings are getting a lot more attention from our shareholders as well as our customers.
Speaker 1: transcript
Speaker 1: are getting a lot more attention from our shareholders as well as our customers.
Speaker 1: transcript
Speaker 1: At this point, we are expecting incremental customer adoptions of our fan out and interposer-based solutions along with increasing collaboration with upstream boundary partners on leading edge advanced packs.
At this point, we are expecting incremental customer adoption of our fan out and enter poser based solutions, along with increasing collaboration with upstream foundry partners on leading edge advanced packaging.
Ken Chan: At this point, we are expecting incremental customer adoptions of our fan out and interposer based solutions along with increasing collaboration with upstream boundary partners on leading edge advanced packaging. As a result, we will be making incremental investments to support these businesses subject to financially justifiable returns. And while revenues related to these products are relatively small, representing a low single digit percentage of ATM revenues, we believe we see significant growth opportunities in the coming year.
Speaker 1: transcript
Speaker 1: As a result, we will be making incremental investments.
As a result, we will be making incremental investments to support these businesses subject to financially justifiable returns are.
Speaker 1: transcript
Speaker 1: to support these businesses subject to financially justifiable return.
Speaker 1: transcript
Speaker 1: And while revenues related to these products are relatively small, representing a low single-digit percentage of ATM revenue.
And while revenues related to these products are relatively small representing a low single digit percentage of ATM revenues. We believe we see significant growth opportunities in the coming year.
Speaker 1: transcript
Speaker 1: we believe we see significant growth opportunities in the coming year.
Speaker 1: transcript
Speaker 1: We are in October now and the year is almost done. Much of the original wafer banks for ATM business still remain to be addressed.
We are in October now and the year is almost done.
Much of the original wafer bags for ATM business still remain to be addressed.
Kenneth Hsiang: As with many situations during the downturn, our wafer bank situation has become a bit complicated. During Q3, while some wafer banks were gradually being worked down, the composition of some of those wafer banks appeared to be replenishing instead of just declining. In effect, we saw newer wafers started to come in and replace older ones. Devices on these older wafers may continue to be sold, perhaps by being reskewed or by being marked down. If that is the case, we will provide packaging and testing services for those products. For us, the focus going forward should be placed on the newer generation of products.
Ken Hsiang: As with many situations during the downturn, our wafer bank situation has become a bit complicated. During Q3, while some wafer banks were gradually being worked down, the composition of some of those wafer banks appeared to be replenishing instead of just declining. In effect, we saw newer wafers started to come in and replace older ones. Devices on these older wafers may continue to be sold, perhaps by being reskewed or by being marked down. If that is the case, we will provide packaging and testing services for those products. For us, the focus going forward should be placed on the newer generation of products.
Speaker 1: transcript
Speaker 1: As with many situations during the downturn, our Wait for Banks situation has become a bit complicated.
As with many situations during the downturn, our wafer bank situation has become a bit complicated.
Ken Chan: We are in October now and the year is almost done. Much of their original wafer banks for ATM business still remain to be addressed. As with many situations during the downturn, our wafer bank situation has become a bit complicated. During the third quarter, while some wafer banks were gradually being worked down, the composition of some of those wafer banks appeared to be replenishing instead of just declining. In effect, we saw newer wafers started to come in and replace older ones.
Speaker 1: transcript
Speaker 1: During the third quarter, while some wafer banks were gradually being worked down, the composition of some of those wafer banks appeared to be replenishing instead of just declining. In effect, we saw newer wafers started to come in and replace older ones.
During the third quarter, while some way for banks, we are gradually being worked down the composition of some of those wafer banks appeared to be replenishing instead of just declining <unk>.
In effect, we saw newer wafer started to come in and replace older ones.
Speaker 1: transcript
Speaker 1: Devices on these older wafers may continue to be sold, perhaps by being re-skewed or by being marked down. And if that is the case, we will provide packaging and testing services for those products.
Vices on these older wafers may continue to be sold perhaps by being re skewed or by being marked down and if that is the case, we will provide packaging and testing services for those products.
Speaker 1: transcript
Speaker 1: But for us, the focus going forward should be placed on the newer generation of products. And while we are not in position to predict how long those new products will stay in the channel before they sell through in the end market.
Ken Chan: Devices on these older wafers may continue to be sold. Perhaps by being rescued or by being marked down. And if that is the case, we will provide packaging and testing services for those products. But for us, the focus going forward should be placed on the newer generation of products. And while we are not in position to predict how long those new products will stay in the channel before they sell through in the end markets, we do believe that the overall environment heading into 2024 appears to be improving.
But for US the focus going forward should be placed on the newer generation of products and while we are not in position to predict how long those new products will stay in the channel before they sell through in the end markets. We do believe that the overall environment.
Kenneth Hsiang: While we are not in position to predict how long those new products will stay in the channel before they sell through in the end markets, we do believe that the overall environment heading into 2024 appears to be improving. Our customers have been more cautious in their approach towards restocking. Overall demand looks marginally better as consumers finish their post-COVID catch-up spending. Businesses are looking to implement AI to optimize their business operations. Consumers are discovering how new AI technology may help improve their lives. It is an opportunity to target a new generation of products at a new generation of consumer demand. Looking out into Q4, we see many products continuing their seasonal builds. While we did see a welcomed mild seasonal ramp, we have not necessarily seen a rapid recovery for the industry.
Ken Hsiang: While we are not in position to predict how long those new products will stay in the channel before they sell through in the end markets, we do believe that the overall environment heading into 2024 appears to be improving. Our customers have been more cautious in their approach towards restocking. Overall demand looks marginally better as consumers finish their post-COVID catch-up spending. Businesses are looking to implement AI to optimize their business operations. Consumers are discovering how new AI technology may help improve their lives. It is an opportunity to target a new generation of products at a new generation of consumer demand. Looking out into Q4, we see many products continuing their seasonal builds. While we did see a welcomed mild seasonal ramp, we have not necessarily seen a rapid recovery for the industry.
Speaker 1: transcript
Speaker 1: we do believe that the overall environment heading into 2024 appears to be improving. Our customers have been more cautious in their approach towards restocking. Overall demand looks marginally better as consumers finish their post-COVID catch-up spending.
Heading into 2024 appears to be improving.
Our customers have been more cautious in their approach towards restocking overall demand looks marginally better as consumers finish their post COVID-19 catch up spending.
Speaker 1: transcript
Speaker 1: businesses are looking to implement AI to optimize their business operation.
Businesses are looking to implement AI to optimize their business operations consumers are discovering how new AI technology may help improve their lives.
Ken Chan: Our customers have been more cautious in their approach towards restocking. Overall, the man looks marginally better as consumers finish their post-COVID catch-up spending. Businesses are looking to implement AI to optimize their business operations. Consumers are discovering how new AI technology may help improve their lives. It is an opportunity to target a new generation of products at a new generation of consumer demand. Looking out into the fourth quarter, we see many products continuing their seasonal bills.
Speaker 1: transcript
Speaker 1: Consumers are discovering how new AI technology may help improve their lives.
Speaker 1: transcript
Speaker 1: It is an opportunity to target a new generation of products at a new generation of consumer
It is an opportunity to target a new generation of products at a new generation of consumer demand.
Looking out into the fourth quarter, we see many products continuing their seasonal build.
Speaker 1: transcript
Speaker 1: Looking out into the fourth quarter, we see many products continuing their seasonal bills.
Speaker 1: transcript
Speaker 1: And while we did see a welcomed mild seasonal ramp, we have not necessarily seen a rapid recovery for the end.
And while we did see a welcome mild seasonal ramp we have not necessarily seen a rapid recovery for the industry.
Kenneth Hsiang: As an extension to this concept, we believe the seasonal forces of product cycles are still stronger than the recovery we are encountering. As such, we see our Q4 revenues to be more indicative of waning seasonal builds than the rising momentum of a full recovery. For our EMS business, the Q3 shallower than normal product ramps turn into a longer building season with a peak in Q4. Product mix and the cessation of foreign exchange benefits will result in a lower quarterly operating margin, similar to year-to-date levels. We would like to summarize our outlook for Q4 as follows. For our ATM business in NT dollar terms, our ATM Q4 2023 revenues should decline low to mid single digits quarter over quarter. Our ATM Q4 2023 gross margin should be flattish as compared to the Q3 2023.
Ken Hsiang: As an extension to this concept, we believe the seasonal forces of product cycles are still stronger than the recovery we are encountering. As such, we see our Q4 revenues to be more indicative of waning seasonal builds than the rising momentum of a full recovery. For our EMS business, the Q3 shallower than normal product ramps turn into a longer building season with a peak in Q4. Product mix and the cessation of foreign exchange benefits will result in a lower quarterly operating margin, similar to year-to-date levels. We would like to summarize our outlook for Q4 as follows. For our ATM business in NT dollar terms, our ATM Q4 2023 revenues should decline low to mid single digits quarter over quarter. Our ATM Q4 2023 gross margin should be flattish as compared to the Q3 2023.
Ken Chan: And while we did see a welcomed mild seasonal ramp, we have not necessarily seen a rapid recovery for the industry. As an extension to this concept, we believe the seasonal forces of product cycles are still stronger than the recovery we are encountering. As such, we see our fourth quarter revenues to be more indicative of waning seasonal bills than the rising momentum of a full recovery. For EMS business, the third quarter shallower than normal product reps turn into a longer building season with a peak in the fourth quarter. Product mix and the cessation of foreign exchange benefits will result in a lower quarterly operating margin similar with year-to-date levels.
Speaker 1: transcript
Speaker 1: As an extension to this concept, we believe the seasonal forces of product cycles are still stronger than the recovery we are encountering.
As an extension to this concept we believe the seasonal forces of product cycles are still stronger than the recovery we are encountering.
Speaker 1: transcript
Speaker 1: As such, we see our fourth quarter revenues to be more indicative of waning seasonal bills than the rising momentum of a full recovery.
As such we see our fourth quarter revenues to be more indicative of waning seasonal builds than the rising momentum of a full recovery.
Speaker 1: transcript
Speaker 1: For our EMS business, the third quarter shallower than normal product wraps turn into a longer building season with a peak in the fourth quarter.
For our EMS business, the third quarter shallower than normal product reps turn into a longer.
Building season, with a peak in the fourth quarter.
Speaker 1: transcript
Speaker 1: Product mix and the cessation of foreign exchange benefits will result in a lower quarterly operating margin similar with your today low.
Product mix and the cessation of foreign exchange benefits will result in a lower quarterly operating margin similar with year to date levels.
We would like to summarize our outlook for the fourth quarter as follows.
Speaker 1: transcript
Speaker 1: We would like to summarize our outlook for the fourth quarter as follows.
Speaker 1: transcript
Speaker 1: for our ATM business in NT dollar terms, our ATM fourth quarter, 2023 Revenue.
For our ATM business.
In NT dollar terms, our ATM fourth quarter 2020 revenues.
Speaker 1: transcript
Speaker 1: should decline low to mid single digits quarter over quarter.
Should decline low to mid single digits quarter over quarter.
Ken Chan: We would like to summarize our outlook for the fourth quarter as follows. For our ATM business in NT dollar terms, our ATM fourth quarter, 2023 revenues, should decline low to mid-single digits quarter over quarter. Our ATM fourth quarter, 2023 gross margin, should be flatish as compared to third quarter, 2023. For EMS business in NT dollar terms, our EMS fourth quarter, 2023 revenues should increase percentage wise in the low teens quarter over quarter. Our EMS fourth quarter, 2023 operating margin should be similar or slightly higher than our EMS year-to-day 2023 operating margin of 3.3%.
Our ATM fourth quarter 2023, gross margin should be flattish as compared to third quarter 2023.
Speaker 1: transcript
Speaker 1: Our ATM fourth quarter, 2023 gross margin, should be flatish as compared to third quarter, 2023.
Kenneth Hsiang: For our EMS business in NT dollar terms, our EMS Q4 2023 revenues should increase percentage-wise in the low teens quarter over quarter. Our EMS Q4 2023 operating margin should be similar or slightly higher than our EMS year-to-date 2023 operating margin of 3.3%. That is the conclusion of our prepared remarks. I would like to open the floor to questions.
Ken Hsiang: For our EMS business in NT dollar terms, our EMS Q4 2023 revenues should increase percentage-wise in the low teens quarter over quarter. Our EMS Q4 2023 operating margin should be similar or slightly higher than our EMS year-to-date 2023 operating margin of 3.3%. That is the conclusion of our prepared remarks. I would like to open the floor to questions.
Speaker 1: transcript
Speaker 1: For our EMS business, in NT dollar terms, our EMS fourth quarter 2023 revenues should increase percentage wise in the low teens quarter over quarter.
For EMS business in NT dollar terms, our EMS fourth quarter 2023 revenues should increase percentage wise in the low teens quarter over quarter.
Speaker 1: transcript
Speaker 1: our EMS fourth quarter 2023 operating margin should be similar or slightly higher than our EMS year today 2023 operating margin of 3.3.
Our EMS fourth quarter of 2023 operating margin should be similar or slightly higher than our MFS year to date 2023 operating margin of three 3%.
Speaker 2: transcript
Speaker 2: That is the conclusion of our prepared remarks. I would like to open the floor to questions.
That is the conclusion of our prepared remarks, I would like to open the floor to questions.
Ken Chan: That is the conclusion of our prepared remarks.
Operator: Now we would like to open the floor for questions. If you have any questions, please raise your hand. When you ask questions, please hold two questions at a time. Thank you. We have a question from Mr. Gokul Hariharan of J.P. Morgan.
Operator: Now we would like to open the floor for questions. If you have any questions, please raise your hand. When you ask questions, please hold two questions at a time. Thank you. We have a question from Mr. Gokul Hariharan of J.P. Morgan.
Now we would like to open the floor for questions.
Ken Chan: I would like to open the four questions. Now we would like to open the floor for questions. If we have any questions, please raise your hand. When you ask questions, please hold two questions at a time.
Have any question please raise your hand when.
When you ask questions. Please hold your questions at a time thank you.
We have a question from Mr. Goh Cool, how do you hold on of J P. Morgan.
Speaker 3: transcript
Speaker 3: We have a question from Mr. Goku Hariharan of JP Morgan.
Ken Chan: Thank you.
Gokul Hariharan: Hello.
Gokul Hariharan: Hello.
Speaker 4: transcript
Speaker 4: Hello, thanks for the opportunity. So my first question is on the before bank comment. Quite interesting. Could you talk a little bit more, Ken and Joseph on the
Operator: Yes, Gokul.
Operator: Yes, Gokul.
Hello.
Gokul Hariharan: Thanks for the opportunity. My first question is on the wafer bank comment. Quite interesting. Could you talk a little bit more, Ken and Joseph, on the composition of that wafer bank? Are you seeing new wafers coming in for one kind of application while the older wafers that are not yet getting fully depleted is for some other kind of application? Is there any different application that you're seeing in terms of the wafer bank inventory buildup and reduction? To the extent that you have visibility for, could you talk a little bit about how quickly this wafer bank could potentially get depleted over the next maybe couple of quarters or so? That's my first question.
Gokul Hariharan: We have a question from Mr. Gokul, Hariharan of JPE Morgan. Hello. Yes.
Gokul Hariharan: Thanks for the opportunity. My first question is on the wafer bank comment. Quite interesting. Could you talk a little bit more, Ken and Joseph, on the composition of that wafer bank? Are you seeing new wafers coming in for one kind of application while the older wafers that are not yet getting fully depleted is for some other kind of application? Is there any different application that you're seeing in terms of the wafer bank inventory buildup and reduction? To the extent that you have visibility for, could you talk a little bit about how quickly this wafer bank could potentially get depleted over the next maybe couple of quarters or so? That's my first question.
When we come to the African Blue My first question is on Liberty Mutual Bank Goldman a quite interesting Ah could you talk a little bit more again Joseph.
B.
Speaker 4: transcript
Speaker 4: composition of the wifer bank. Are you seeing new wifers coming in for one kind of application while the older wifers that are not yet getting fully depleted as for some other kind of application? Is there any difference by application that you are seeing in terms of the wifer bank inventory buildup and reduction?
Competition.
Are you seeing.
Ken Chan: Thank you for the opportunity. So my first question is on the WIFR bank comment. Quite interesting. Could you talk a little bit more, Ken and Joseph, on the composition of the WIFR bank. Are you seeing new WIFRs coming in for one kind of application, while the older WIFRs that are not yet getting fully depleted is for some other kind of application? Is there any difference by application that you are seeing in terms of the WIFR bank inventory, build up and reduction?
<unk> newly booked Dominion's board, one kind of obligation while the older vehicles that are not yet getting fully deplete. Their this work on my background of obligation.
Is that any different way obligates them to do with being in terms of the riverbank monthly buildup and production.
Speaker 4: transcript
Speaker 4: And to the extent that you have this duty for, could we talk a little bit about how could we, this if a bank could potentially get depleted over the next maybe a couple of quarters or so? That's my first question. Well, I don't think we said so.
And to the extent that you have with the mood before could you talk a little bit about how quick me. This waiver bank could potentially get depleted over the next maybe couple of quarters themselves.
Kenneth Hsiang: Well, I don't think we can predict how fast or what kind of pace that the original wafer bank will be worked down. We are seeing these original wafer banks are being progressively working down to a certain level. At the same time, the overall wafer bank is still, you know, at a relatively high level because some of the wafer banks are being replaced by the new wafers that are coming in. I think at this point it's really the new products that are being launched, which is mostly in the communication consumer as well as in computing area. It's quite widespread in terms of new wafers coming in.
Joseph Tung: Well, I don't think we can predict how fast or what kind of pace that the original wafer bank will be worked down. We are seeing these original wafer banks are being progressively working down to a certain level. At the same time, the overall wafer bank is still, you know, at a relatively high level because some of the wafer banks are being replaced by the new wafers that are coming in. I think at this point it's really the new products that are being launched, which is mostly in the communication consumer as well as in computing area. It's quite widespread in terms of new wafers coming in.
Question.
I don't think so.
Ken Chan: And to the extent that you have this duty for, could you talk a little bit about how quickly this WIFR bank could potentially get depleted over the next, maybe a couple of quarters or so. That's my first question. Well, I don't think we can predict how fast or how, what kind of pace that the original WIFR bank will be will be work down. We are seeing these original WIFR banks are being progressively working down to the level.
Yeah.
Speaker 5: transcript
Speaker 5: We can predict how fast or how, what kind of pace that the original wafer bag will be, will be worked down. We are seeing these original wafer bags are being progressively working down to the certain level. But at the same time, the wafer, overall wafer bag is still out of,
We can predict how fast or how.
What kind of a pace that the.
The original wafer Greg will be will be worked out well we are seeing a.
Original waiver babies will be progressively will get down to sort of level.
But at the same time, the wafer, but overall wafer Bev you're still.
I don't know.
You're relatively high level because of some of the wafer breaks will be repaired motor do wafers that are coming in.
Speaker 5: transcript
Speaker 5: relatively high level because of some of the wafer bags that be replaced by the new wafer that are coming in. And I think at this point is really the new products that be launched, which is mostly communication, consumer as well as in computing area. It's quite West Bradet in terms of new wafer's coming in. And
Ken Chan: But at the same time, the WIFR bank overall WIFR bank is still at a relatively high level. Because of some of the WIFR banks that be replaced by the new WIFRs that are coming in. And I think at this point is really the new products that be launched, which is mostly in communication, consumer as well as in computing area. It's quite West Bradet in terms of new WIFRs coming in. And I think the overall inventory digestion is still going on and it should continue for some time.
At this point, it's really the new products being launched.
Which is will be.
The communication and consumer as well as in a.
In the computing area.
It's quite it was spread at all in terms of new waivers coming in.
Kenneth Hsiang: I think the overall inventory digestion is still going on. It should continue for some time. I think the bright side of it is that we are seeing that being worked down, and we are seeing signs of this inventory being consumed, and the digestion.
Joseph Tung: I think the overall inventory digestion is still going on. It should continue for some time. I think the bright side of it is that we are seeing that being worked down, and we are seeing signs of this inventory being consumed, and the digestion.
Speaker 5: transcript
Speaker 5: I think the overall inventory digestion is still going on. It should continue for some time. But I think the...
I think the overall inventory digestion is still going on and it should.
Continue for.
Some time.
I think the.
Speaker 5: transcript
Speaker 5: The bright side of it is we are seeing that being worked down and we are seeing signs of this inventory being consumed and the digestion should be at the tail end of the industry digestion now.
The bright side of it is we are seeing that being worked out and we are.
Ken Chan: But I think the, the bright side of it is we are seeing that being worked down and we are, we're seeing signs of this inventory being consumed and the digestion should, we should be at the tail end of the industry digestion now.
We're seeing signs of inventory being consumed.
Consumed.
Joseph Tung: We should be at the tail end of the industry digestion now.
I just didn't shoot.
Joseph Tung: We should be at the tail end of the industry digestion now.
Sure.
We should be at the tail end of the industry.
They're just now.
Gokul Hariharan: Thank you. Thanks, Joseph Tang. So, if you look at the Q4 guidance, down low to mid-single-digit, you saw pretty good improvement in communications, but both auto and industrial kind of tailed off in Q3. Is that the same trend going into Q4 with communications, consumer still relatively strong, while you see the drop-off continuing in auto and industrial? Lastly, I think on the auto industrial side, any thoughts on how this is likely to play out, given it's been a sector which has been relatively strong until very recently?
Gokul Hariharan: Thank you. Thanks, Joseph Tang. So, if you look at the Q4 guidance, down low to mid-single-digit, you saw pretty good improvement in communications, but both auto and industrial kind of tailed off in Q3. Is that the same trend going into Q4 with communications, consumer still relatively strong, while you see the drop-off continuing in auto and industrial? Lastly, I think on the auto industrial side, any thoughts on how this is likely to play out, given it's been a sector which has been relatively strong until very recently?
Thank you.
Speaker 4: transcript
Speaker 4: So if we look at the Q4 guidance download to mid-single.jb
So if you're looking at the Q4 guidance down low to mid single the dib.
Speaker 4: transcript
Speaker 4: You saw a pretty good improvement in communication by both auto and industrial kind of tailed off.
You got a pretty good improvement in communication via both auto and industrial kind of failed all.
Speaker 4: transcript
Speaker 4: in Q3 is not the same trend going into Q4 that communication is still relatively strong while you see communication consumers is relatively strong when you see the drop-off continuing in auto and industrial and lastly I think on the auto industrial side any thoughts on how this is likely to play out.
In Q3.
Gokul Hariharan: Thank you, thanks Joseph. So if you look at the Q4 guidance down low to mid single the jet. You call pretty good improvement in communication by both auto and industrial kind of failed off in Q3. Is that the same trend going into Q4 that communication is still relatively strong while you see communication consumers is relatively strong when you see the drop off continuing in auto and industrial. And lastly, I think on the auto industrial side, any thoughts on how, how this is likely to play out.
It was underpinned trend going into Q4.
Communication is still little bit stronger.
Right.
Get them to come to your mother's literally strong whether it be the dropbox continuing in auto and industrial and lastly, I think on the ortho and the steel side any any thoughts on how how does look likely to play out.
Speaker 4: transcript
Speaker 4: given it's been a factor which has been relatively strong until very recently seems like seeming to go into inventory correction now based on prior history and your judgment do you think you're going to be still drag?
Given it's been a victory doesn't mean literally strong until very recently.
Gokul Hariharan: Seems like seeming to go into inventory correction now, based on prior history and your judgment, do you think this is going to be still a drag for most of next year, like H1 of next year, at least?
Gokul Hariharan: Seems like seeming to go into inventory correction now, based on prior history and your judgment, do you think this is going to be still a drag for most of next year, like H1 of next year, at least?
Like are we.
Being too.
Seeming to go into a inventory correction now.
Based on prior history in your judgment.
Gokul Hariharan: Given it's been a factor which has been relatively strong until very recently seems like seem seem seem to seem to go into inventory correction now based on prior judge prior history and your judgment. Do you think you're going to be still drag for most of next year like first up of next year at least. I think overall situations are stabilizing now and the auto relates to be one of the brighter spots and we are making quite a bit of progress in moving up the auto part of the business.
Things are going to be still a drag for most of next year like most of it next year at least.
Speaker 4: transcript
Speaker 4: for most of next year, like first half of next year at least.
Joseph Tung: I think overall situations are stabilizing now, and the auto remains to be one of the brighter spots, and we are making quite a bit of progress in moving up the auto part of the business. I think last year we have overall about 7% of our revenue coming from automotive, and that ratio has been up to around 10% for this year. We believe it will continue to grow. Although we are seeing some level of the growth, the momentum seems to be slowing down a little bit because there are certain areas there will be some inventory that needs to be digested. Overall, I think the overall trend is still going fairly healthy. For Q4, I think it's across the board.
Joseph Tung: I think overall situations are stabilizing now, and the auto remains to be one of the brighter spots, and we are making quite a bit of progress in moving up the auto part of the business. I think last year we have overall about 7% of our revenue coming from automotive, and that ratio has been up to around 10% for this year. We believe it will continue to grow. Although we are seeing some level of the growth, the momentum seems to be slowing down a little bit because there are certain areas there will be some inventory that needs to be digested. Overall, I think the overall trend is still going fairly healthy. For Q4, I think it's across the board.
Speaker 5: transcript
Speaker 5: I think overall situations are stabilizing now and the auto remains to be one of the brighter spots. And we are making quite a bit of progress in moving up the auto part of the business.
I think overall situations are stabilized now in auto rebates to be one of the brighter spots and we are.
Making quite a bit of progress moving up the auto part of the business.
Speaker 5: transcript
Speaker 5: I think last year we have over about 7% of our revenue coming from automotive.
I think last year, we have overall of about 7% of our.
Revenue coming from automotive.
Speaker 5: transcript
Speaker 5: And that ratio has been up to 10% for this year. And we believe it will continue to grow, although we are seeing some level of...
And that ratio has been up to 10.
10% for this year.
We believe it will continue to grow although we are seeing some.
Gokul Hariharan: I think last year we have overall about 7% of our revenue coming from automotive and that ratio has been up to 10% for this year. We believe it will continue to grow although we are seeing some level of growth. The moment it seems to be slowing down a little bit because there will be some inventory that needs to be digested but overall I think the overall trend is still going fairly healthy. For quarter four I think it's across the board. I think a lot of the new products have been introduced and we are seeing the seasonal uptake from these new products that have been launched.
Level of.
Speaker 5: transcript
Speaker 5: The growth, the momentum seems to be slowing down a little bit because the, there are certain areas, there will be some inventory that needs to be digested.
The growth the momentum seems to be slowing down a little bit because they are.
Scenario, there will be some inventory that needs to be digested.
Speaker 5: transcript
Speaker 5: But overall, I think the overall trend is still going fairly healthy. Quarter four, I think it's across the board. I think a lot of the new products are being introduced. And we are seeing the seasonal updates.
Overall, I think the overall trend is still going fairly healthy.
For quarter four I think if you across the board I think a lot of the new products there'll be introduced.
Joseph Tung: I think a lot of the new products are being introduced, and we are seeing the seasonal uptick from these new products that are being launched.
Joseph Tung: I think a lot of the new products are being introduced, and we are seeing the seasonal uptick from these new products that are being launched.
We are seeing a seasonal uptick.
Speaker 5: transcript
From these new products that will be launched.
Operator: Our next question is from Miss Laura Chen of Citigroup.
Operator: Our next question is from Miss Laura Chen of Citigroup.
Speaker 3: transcript
Speaker 3: Our next question is from Miss Laura Chen of Citigroup.
Our next question is from MS. Laura Chen of Citigroup.
Laura Chen: Hi. Thank you. Can you hear me?
Laura Chen: Hi. Thank you. Can you hear me?
Alright. Thank you can you hear me.
Operator: Yes.
Operator: Yes.
Laura Chen: Yeah. Thank you for taking my question. My first question is about the CoWoS or on substrate advanced packaging expansion. Can you provide us more detail about how big of the capacity you are preparing? Also, in terms of the growth outlook, even though so far it's at very low single digit of the IC ATM business. I was just wondering your view on the capacity expansion plan and also the growth outlook. That's my first question. Thank you.
Laura Chen: Yeah. Thank you for taking my question. My first question is about the CoWoS or on substrate advanced packaging expansion. Can you provide us more detail about how big of the capacity you are preparing? Also, in terms of the growth outlook, even though so far it's at very low single digit of the IC ATM business. I was just wondering your view on the capacity expansion plan and also the growth outlook. That's my first question. Thank you.
Yes.
Speaker 3: transcript
Speaker 3: Yeah, thank you for taking my question. My first question is about the Coas or on substrate events packaging expansion. Can you provide us more detail about the how big?
Yeah. Thank you for taking my question. My first question is about <unk> or a subsidiary of events packaging expansion.
Laura Chan: Our next question is from Miss Laura Chan of City Group. Hi, thank you, Carol, here we? Yes. Yeah, thank you for taking my question. My first question is about the COAS or on sub-trail events packaging expansion. Can you provide us more detail about the how big of the capacity you are preparing? And also in terms of the growth outlook, even though so far is at very low single digit of the ICAT and business. Let's just wondering your view on the capacity expansion plan and also the growth outlook. That's my first question. Thank you.
Can you provide us more detail about how big of the capacity you are preparing and also on in terms of the growth outlook, even though so far is at very low single digit of the IC ATM business just wondering your view on.
Speaker 6: transcript
Speaker 6: of the capacity you are preparing and also in terms of the growth outlook even though so far is at very low single digits of the ICATM business, I was just wondering your view on the capacity expansion plan and also the growth outlook. That's my first question.
On the capacity expansion plan and also the growth outlook. That's my first question. Thank you as there are giving out.
Joseph Tung: Well, instead of giving out the numbers for capacity, I think what we can say is we have the sufficient installed capacity that are generating the revenue that we're generating now. We do see pretty good potential going forward. We'll be making the necessary investment provided those are, you know, financially justifiable. You know what, most of the CapEx that we're gonna put in or the investments we're gonna put in are for debottlenecking the capacity. At this point, we are confident that we should easily double that part of the revenue next year.
Joseph Tung: Well, instead of giving out the numbers for capacity, I think what we can say is we have the sufficient installed capacity that are generating the revenue that we're generating now. We do see pretty good potential going forward. We'll be making the necessary investment provided those are, you know, financially justifiable. You know what, most of the CapEx that we're gonna put in or the investments we're gonna put in are for debottlenecking the capacity. At this point, we are confident that we should easily double that part of the revenue next year.
Speaker 5: transcript
Speaker 5: Well, instead of giving out the numbers for capacity, I think what we can say is we have the sufficient capacity, installed capacity that are generating the revenue that we're generating now. And we do see pretty good potential going forward. And we'll be making the necessary investment, provided those are, you know,
The numbers for capacity I think what.
What we can say is that we have sufficient capacity installed capacity that are generating the revenue that we're jewelry, where it is now and we do see a pretty good potential going forward and.
Ken Chan: Well, instead of giving out the numbers for capacity, I think what we can say is that we have the sufficient capacity to generate the revenue that we are doing now. And we do see pretty good potential going forward and will be making the necessary investment provided those are financially justifiable. And you know, most of the capital that we're going to put in or the investment we're going to put in are for debatling the capacity. And at this point, we are confident that we should easily double that part of the revenue next year.
We'll be making the necessary investments.
Provided those are our views.
Speaker 5: transcript
Speaker 5: financially justifiable. And, you know, most of the tap packs that we're gonna put in or the investment we're gonna put in are for debatling the capacity.
Financially justifiable.
And.
Most of the Capex that we're going to put in or the best way to put it off or debottlenecking to your capacity.
Speaker 5: transcript
Speaker 5: And at this point, we are confident that we should easily double that part of the revenue next year.
And at this point, we we are confident.
We should easily doubled their part of the revenue next year.
Laura Chen: Okay. Thank you. My second question is also just wondering that you see the ATM business will see slightly down, but at the same time, the growth margin seems to be resilient at the current level. Just wondering, like in terms of the technology mix or applications, what helped you held relatively well for the profitability into Q4, even though we see some still some softness?
Laura Chen: Okay. Thank you. My second question is also just wondering that you see the ATM business will see slightly down, but at the same time, the growth margin seems to be resilient at the current level. Just wondering, like in terms of the technology mix or applications, what helped you held relatively well for the profitability into Q4, even though we see some still some softness?
Speaker 6: transcript
Speaker 6: Thank you. And also my second question is also just wondering that you see the ATM business will cease lightly down, but at the same time the growth margin seems to be resilient at the current level. So just wondering in terms of the technology mix or applications, what helped you help a relatively well for the profitability.
Okay. Thank you and also my second question is also just.
Wondering that you see the ATM business were slightly down but at the same time the gross margin since two the resilient at their current level. So just wondering like in terms of the technology mix or applications.
Ken Chan: Okay, thank you. And also my second question is also just wondering that you see the ATM business will see slightly down, but at the same time, the growth margin seems to be resilient at the current level. So just wondering like in terms of the technology mix or applications, what help you help relative well for the probabilities into Q4, even though we see some still some softness. Well, a lot of it comes with the requirements that we are building.
You held relatively well off what the profitability.
Speaker 6: transcript
Speaker 6: into Cuba, even though we see some still some stuff.
Into Q4, even though we see some still some softness.
Joseph Tung: Well, a lot of it comes with the product mix that we're building. We are in Q3 and also in Q4, we are seeing that the higher margin products representing a higher percentage of our overall revenue. Also, I think the pricing continued to be resilient and, given our scale and our technology offering and the efficiency or the level of automation that we have, we have continued to be able to maintain a reasonable pricing level and also to have pretty good control over our cost and making the margin at a, you know, we're not totally happy, but it's, you know, quite satisfactory level at this point.
Joseph Tung: Well, a lot of it comes with the product mix that we're building. We are in Q3 and also in Q4, we are seeing that the higher margin products representing a higher percentage of our overall revenue. Also, I think the pricing continued to be resilient and, given our scale and our technology offering and the efficiency or the level of automation that we have, we have continued to be able to maintain a reasonable pricing level and also to have pretty good control over our cost and making the margin at a, you know, we're not totally happy, but it's, you know, quite satisfactory level at this point.
Speaker 5: transcript
Speaker 5: Well, a lot of it comes with the product makes.
Well a lot of it comes with the Oh.
The product mix that we are building.
Speaker 5: transcript
Speaker 5: And we are in quarter three, and also in quarter four, we're seeing that the higher margin products being up.
We are.
In quarter three.
It also in quarter four we are seeing that would be the higher margin products being.
Speaker 5: transcript
Speaker 5: representing a higher percentage of overall revenue. And also, I think the pricing continued to be resilient and given our scale and our technology offering.
Representing a higher percentage of overall revenue.
And also I think the pricing continued to be resilient.
Ken Chan: And we are equal to three and also in quarter four, we're seeing that the higher margin products being now, representing a higher percentage of overall revenue. And also, I think the pricing continued to be resilient and given our scale and our technology offering and efficiency or the level automation that we have, we have, we have continued to be able to maintain a reasonable price level and also to have pretty good control over our costs and making the margin at the, you know, we're not totally happy but, you know, quite sadly level at this point.
Given our scale and our technology offering.
Speaker 5: transcript
Speaker 5: and the efficiency of the level automation that we have. We have continued to be able to maintain a reasonable price level and also to have pretty good control over our cost and making the margin at a meal.
And the efficiency or the level of automation that we have.
We had we have continue to.
Ken Chan: Even when we're anticipating a mile, decrying revenue, going into quarter four, given the efforts that we put in, we believe that we can maintain whatever margin we have achieved in quarter three, if not higher, a little bit higher.
Being able to maintain a reasonable price level and also to have pretty good control over our costs.
I'm, making the margin.
Neil.
Speaker 5: transcript
Speaker 5: We're not totally happy, but it's quite sad at every level at this point.
We're not totally happy with it.
Of course, there's every level at this point.
Joseph Tung: Even, when we're anticipating a mild decline in revenue going into Q4, given the efforts that we put in, we believe that we can maintain whatever margin we achieved in Q3, if not higher, a little bit higher.
Joseph Tung: Even, when we're anticipating a mild decline in revenue going into Q4, given the efforts that we put in, we believe that we can maintain whatever margin we achieved in Q3, if not higher, a little bit higher.
Speaker 5: transcript
Speaker 5: Even when we're anticipating a mile decrying revenue going into quarter four, given the efforts that we put in, we believe that we can maintain whatever margin we have achieved in quarter three, if not higher, a little bit higher.
Even when we were anticipating a mile declining revenue going into quarter four.
Given the efforts that we put in we believe that we can maintain.
Whatever margin, we achieved in quarter, three if not higher little bit higher.
Operator: Next question is from Mr. Bruce Lu of Goldman Sachs.
Operator: Next question is from Mr. Bruce Lu of Goldman Sachs.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Bruce Lu of Goldman Sachs.
Next question is from Mr. Bruce Lu of Goldman Sachs.
Bruce Lu: Next question is from Mr. Bruce Lu of Goldman Sachs. Hello. Given that the technology for AI in terms of packaging is so complicated for me, can you tell us what, what is the service you provided for AI? It's more linked to Fennel or, you know, software or anything, what kind of profitability, what kind of return on equity, what kind of capital intensity for this business? Well, we are getting pretty good traction with our customers in terms of both our Fennel as well as Interpol for base, kind of packaging products.
Bruce Lu: Hello? Can you hear me?
Bruce Lu: Hello? Can you hear me?
Operator: Yes.
Operator: Yes.
Hello can you hear me yes.
Bruce Lu: Okay.
Bruce Lu: Okay.
Joseph Tung: Hi, Bruce.
Joseph Tung: Hi, Bruce.
Bruce Lu: Thank you for taking my question. Hi. I think, you know, the management sounds a lot more bullish or positive in terms of AI revenue potential. Given that the technology for AI in terms of packaging is so complicated for me, can you tell us what is the service you provided for AI? It's more related to Fan-out or, you know, on substrate or anything. What kind of profitability, what kind of return on equity, what kind of capital intensity for this business?
Bruce Lu: Thank you for taking my question. Hi. I think, you know, the management sounds a lot more bullish or positive in terms of AI revenue potential. Given that the technology for AI in terms of packaging is so complicated for me, can you tell us what is the service you provided for AI? It's more related to Fan-out or, you know, on substrate or anything. What kind of profitability, what kind of return on equity, what kind of capital intensity for this business?
Speaker 7: transcript
Speaker 7: Okay, thank you for taking my question. Hi, I think the management sounds a lot more bullish or positive in terms of AI revenue potential.
Hey, guys. Thanks for taking my question, Hi, I think you know.
Bangemann sounds a lot more bullish or positive in terms of AI.
Revenue potential.
Speaker 7: transcript
Speaker 7: Given that the technology for AI in terms of packaging is so complicated for me, can you tell us what the future holds for AI in terms of packaging?
Given that the.
Technology for AI in terms of packaging is complicated for me can you tell us what.
Speaker 7: transcript
Speaker 7: What is the service you provided for AI? It's more linked to fan out or on software or anything. What kind of profitability, what kind of return on equity, what kind of capital intensity for this decision?
What is the service you provide it.
And for AI, it's more leg it too.
Now or you know.
Akshay or anything what kind of in your pocket ability what kind of return on equity what kind of capital intensity for this business.
Joseph Tung: Well, we are getting pretty good traction with our customers in terms of both our Fan-out as well as interposer-based kind of packaging products. We will be aggressively engaging these customers and try to fit their needs. At the same time we are also increasing our collaboration with the upstream foundries, in providing the sufficient capacity into this area. We are optimistic about the revenue from these product, different package type products, coming from both directions. One is our own solutions, and the other is really the collaboration with foundries.
Joseph Tung: Well, we are getting pretty good traction with our customers in terms of both our Fan-out as well as interposer-based kind of packaging products. We will be aggressively engaging these customers and try to fit their needs. At the same time we are also increasing our collaboration with the upstream foundries, in providing the sufficient capacity into this area. We are optimistic about the revenue from these product, different package type products, coming from both directions. One is our own solutions, and the other is really the collaboration with foundries.
Speaker 5: transcript
Speaker 5: Well, we are getting pretty good traction with our customers in terms of both our final as well as inter-polster based kind of packaging products.
Well, we are getting pretty good traction with our customers in terms of.
Both are a fan out as well as.
And proposal base or kind of packaging products.
Speaker 5: transcript
Speaker 5: And we will be aggressively engaging these customers and try to fit their needs.
And.
We will be we will be.
Aggressively engaging customers and try to.
Peter needs.
Speaker 5: transcript
Speaker 5: But at the same time, we are also increasing our collaboration with the upstream foundries.
But at the same time, we are also increasing our collaboration with the upstream foundries.
Bruce Lu: And we will be, we will be aggressive engaging these customers and try to fit their needs. But at the same time, we are also increasing our collaboration with the upstream boundaries in providing the sufficient capacity into this area. So we are optimistic about the revenue from these different package types, coming from both directions. One is our own solutions and the other is really the collaboration with boundaries.
Speaker 5: transcript
Speaker 5: in providing the sufficient capacity into this area. So we are optimistic about the revenue.
In providing the sufficient cause.
Possibly.
This area. So we are optimistic about the revenue.
Speaker 5: transcript
Speaker 5: from these different package type products.
From these different product packaged product.
Speaker 5: transcript
Speaker 5: coming from both directions. One is our own solutions and the other is really the collaboration with boundaries.
Coming from both directions, one is our own.
The solutions that we are there is really the collaboration with foundries.
Bruce Lu: Which one is stronger, you know, for the past three months, which one turns out to be more positive to give the management, like, stronger confidence?
Bruce Lu: Which one is stronger, you know, for the past three months, which one turns out to be more positive to give the management, like, stronger confidence?
Speaker 7: transcript
Speaker 7: But which one is stronger for the past three months? Which one?
But which one is stronger product.
Three months, which one.
Speaker 5: transcript
Speaker 5: turns out to be more positive to give the manarium like stronger confidence. Well, I think the collaboration with Bungie or yourself. The collaboration is more stable there and it's more obvious. In terms of our own solution, I think the design or the process of it is still subject to a lot of the customer.
Turns out to be more positive to get there.
There are many of them stronger confident well I think the average hours boundary or elaboration is more and more stable there and it's more.
Joseph Tung: Well, I think the
Joseph Tung: Well, I think the
Bruce Lu: Collaboration with foundry or yourself?
Bruce Lu: Collaboration with foundry or yourself?
Joseph Tung: Collaboration is more stable there, and it's more obvious. In terms of our own solution, I think the design or the process of it is still, you know, subject to a lot of the customer discussion and also co-working with our customers. We are making a lot of progress on that. We're actually in mass production, but in terms of real volume, I think we should be seeing that coming from next year.
Joseph Tung: Collaboration is more stable there, and it's more obvious. In terms of our own solution, I think the design or the process of it is still, you know, subject to a lot of the customer discussion and also co-working with our customers. We are making a lot of progress on that. We're actually in mass production, but in terms of real volume, I think we should be seeing that coming from next year.
Ken Chan: But which one is stronger for the, you know, for the past three months, which one turns out to be more positive to get the management like stronger confidence? Well, I think the collaboration with boundary or yourself. The collaboration is more stable there and it's more obvious in terms of the, in terms of our own solution that the design or the process of it is still, you know, subject to a lot of the customer.
Obvious in terms of the in terms of our own solution.
The design order process, albeit still.
Your subject to a lot of the customer.
Speaker 5: transcript
Speaker 5: discussion and also co-working with the customers. We are making a lot of progress on that. And we're actually in mass production, but in terms of real volume, I think we should be seeing that coming from next year.
Discussion it also co working with their customers.
Well, we are making a lot of progress on that.
We're actually in mass production, but in terms of real volume I think we should be seeing that coming from.
Ken Chan: Discussion and also co-working with the customers. We are making a lot of progress on that and we are actually in mass production, but in terms of real volume, I think we should be seeing that coming from next year.
This year.
Bruce Lu: Okay. Sorry. What was the profitability for that? Capital intensity.
Bruce Lu: Okay. Sorry. What was the profitability for that? Capital intensity.
Speaker 7: transcript
Speaker 7: Okay, sorry. What was the profitability for that? The capital intensity? What? The profitability? The profitability for the AI related business and the capital intensity.
Okay, Alright, so what was the profitability for that kept the profitability the profitability for the AI related business and the capital intensity for that well youre seeing our margin being a gradually improving so well.
Joseph Tung: Profitability what?
Joseph Tung: Profitability what?
Bruce Lu: Profitability. The profitability for the AI related business and the capital intensity for that.
Bruce Lu: Profitability. The profitability for the AI related business and the capital intensity for that.
Joseph Tung: Well, you're seeing our margin being gradually improving, so at least the margin should be accreted.
Joseph Tung: Well, you're seeing our margin being gradually improving, so at least the margin should be accreted.
Speaker 5: transcript
Speaker 5: Well, you're seeing our margin being gradually proving so well, at least the margin should be acquitted.
At least the margins should be accretive.
Operator: Our next question is from Mr. Charlie Chan of Morgan Stanley.
Operator: Our next question is from Mr. Charlie Chan of Morgan Stanley.
Speaker 3: transcript
Speaker 3: Our next question is from Mr. Charlie Ken of Morgan Stanley .
Our next question is from Mr. Charlie Chan of Morgan Stanley.
Charlie Chan: Hello. Thanks for taking my question. First of all, congrats for the great execution, especially for Q1, gross margin improvements.
Charlie Chan: Hello. Thanks for taking my question. First of all, congrats for the great execution, especially for Q1, gross margin improvements.
Speaker 8: transcript
Speaker 5: Hello, thanks for taking my question. So first of all, Congress or the current execution especially for the first quarter, of course, March.
Hello, Thanks for taking my question.
So the so first of all congrats for the good.
Charlie Chan: Our next question is from Mr. Charlie Chan of Morgan Stanley. Hello, thanks for taking my question.
Got it.
<unk> is basically for the first quarter.
Joseph Tung: Thank you.
Joseph Tung: Thank you.
Charlie Chan: First question is about your view about the cycle and knowing right now customers placing rush orders, your wafer bank get depleted. Do you think right now is the hard bottom cycle, meaning for Q1, you wouldn't expect a further decline of the fab utilization? Can you just give us some color about the cycle recovery? Thanks.
Gross margin improvements.
Speaker 8: transcript
Speaker 8: So first question is about your view about the cycle and now right now customers placing brushholders, your whiffer bank, get that depleted.
So first question, yes sure.
Charlie Chan: First question is about your view about the cycle and knowing right now customers placing rush orders, your wafer bank get depleted. Do you think right now is the hard bottom cycle, meaning for Q1, you wouldn't expect a further decline of the fab utilization? Can you just give us some color about the cycle recovery? Thanks.
The first question is about.
Your view about the cycle and unknown right now customers place in Russia.
Charlie Chan: So first of all, congrats for this cushion, especially for the first quarter, cross margin improvements. So first question is about your view about the cycle and now right now customers are placing rush orders, your wafer bank get depleted. But do you think right now is the hard bottom cycle meaning for the first quarter, you wouldn't expect further decline of the Feb utilization. I think give us some color about the cycle recovery. Thanks.
Rush orders your wafer bank get depleted.
Speaker 8: transcript
Speaker 8: But you think right now is the hard bottom cycle meaning for the first quarter, you wouldn't expect further decline of the FEP utilization.
But do you think right now is that the pod bottom cycle.
<unk>.
For the first quarter you will then expand that further decline of the fab utilization.
Speaker 8: transcript
Speaker 8: Give us some color about the psycho recovery thing.
Give us some color about the cycle recovery. Thanks.
Joseph Tung: Well, I certainly don't have the crystal ball for it. I think the market is still very volatile. I think one good sign of it is really we same as everybody else, we believe that we're at least at the, you know, maybe nearing the end of the inventory digestion. Still, I think that's really not. At this point, I personally don't believe that this is really the real issue here. I think the real issue is still whether the overall consumption will recover more in a stronger pace than what we're really seeing now. That, you know, that really involves a lot of different various exogenous factors.
Joseph Tung: Well, I certainly don't have the crystal ball for it. I think the market is still very volatile. I think one good sign of it is really we same as everybody else, we believe that we're at least at the, you know, maybe nearing the end of the inventory digestion. Still, I think that's really not. At this point, I personally don't believe that this is really the real issue here. I think the real issue is still whether the overall consumption will recover more in a stronger pace than what we're really seeing now. That, you know, that really involves a lot of different various exogenous factors.
Speaker 5: transcript
Speaker 5: Well, I certainly don't have to crystal ball for it. I think the market is still very volatile. I think one good sign of it is really, we same as everybody else. We believe that we're at least at the...
Oh, Whoa Whoa, I, certainly don't have the crystal ball for it.
The market is still still very volatile.
I think one good side of it is really.
We see them as everybody else, we believe that we're at least at the euro.
Joseph Tung: Well, I certainly don't have the crystal ball for it. I think the market is still very volatile. I think one good sign of it is really we same as everybody else, we believe that we're at least at the, you know, maybe at nearing the end of the inventory digestion. But still, I think that's really not, at this point, I don't, I personally don't believe that this is really the real issue here.
Speaker 5: transcript
Speaker 5: maybe at nearing the end of the inventory digestion.
Oh, maybe nearing the.
At the end of the inventory digestion.
Speaker 5: transcript
Speaker 5: but still I think that's really not
But still I think thats really not.
Speaker 5: transcript
Speaker 5: At this point, I don't, I personally don't believe that this is really the real issue here. I think the real issue is still whether the overall consumption will recover.
At this point I don't I don't I personally don't believe that this is really the real issue here I think the real issue is is still a whether the overall consumption.
We'll recover.
Speaker 5: transcript
Speaker 5: more in a stronger pace than what we're witnessing now. That's really...
More either in the stronger pace than what we were witnessing now.
Joseph Tung: I think the real issues is still whether the overall consumption will recover more in the stronger pace than what we're witnessing now. That, that, you know, that really involves a lot of different various exogenous factors, you know, the recent war that's going on in the middle is certainly doesn't help the situation. And, you know, we, we thought that the inflation is in check now. But with the war going on that may have another putting another another variable into it.
That that you know.
Really.
Speaker 5: transcript
Speaker 5: involves a lot of different various exogeneous factors.
It was a lot of different various an absolute.
Seniors are factors.
Joseph Tung: You know, the recent war that's going on in the Middle East certainly doesn't help the situation. You know, we thought that the inflation is in check now, but with the war going on, that may put in another variable into it. You know, it's very hard to predict how soon, how fast the industry will recover. We're just gonna play it by ear. I think there are good signs, there are bad signs, but you know, overall, I think we just focus on what we do best and serve our customers. You know, we are cautiously optimistic about next year.
Joseph Tung: You know, the recent war that's going on in the Middle East certainly doesn't help the situation. You know, we thought that the inflation is in check now, but with the war going on, that may put in another variable into it. You know, it's very hard to predict how soon, how fast the industry will recover. We're just gonna play it by ear. I think there are good signs, there are bad signs, but you know, overall, I think we just focus on what we do best and serve our customers. You know, we are cautiously optimistic about next year.
Speaker 5: transcript
Speaker 8: You know, the recent war that's going on in the middle is certainly it doesn't help the situation. You know, we thought that the inflation is in check now, but with the war going on that may have another
The reason war, that's going on in the Middle is certainly that doesn't help the situation.
You know we thought that the ratio is in check now.
But with the war going on that.
I may have another.
Speaker 5: transcript
Speaker 5: put in another another variable into it. So you know, it's very hard to predict how soon how fast the industry will recover. We're just going to play by ears.
Put in another another variable into it.
So it's very hard to predict how soon and how fast the industry will recover.
We're just going to tape out years I think the good.
Speaker 5: transcript
Speaker 5: There are good signs, your best signs, but, you know, overall, I think we were just we just.
There are good signs you personalize, but you know overall I think we were just so which is.
Joseph Tung: So, you know, it's, it's very hard to predict how soon, how fast the industry will recover. We're just going to pay by years. I think the good. There are good signs, their best signs, but you know, overall, I think we were just, which is focusing on what we do best and sort of our customers. And, you know, we are cautiously about next year, cautiously optimistic about next year. We believe that I'm going into q1 over. Throughout the whole year of next year, we will continue to see year-over-year growth.
Speaker 5: transcript
Speaker 8: focusing on what we do best and sort of our customers. And, you know, we are cautiously about next year. Consciously optimistic about next year. We believe that going into Q1 over...
Focusing on what we do best and serve our customers.
You know we are cautiously about next year.
Consciously optimistic about next year, we believe that going into Q1.
Joseph Tung: We believe that going into Q1, throughout the whole year of next year, we will continue to see year-over-year growth.
Joseph Tung: We believe that going into Q1, throughout the whole year of next year, we will continue to see year-over-year growth.
Over it.
Speaker 5: transcript
Speaker 5: Throughout the whole year of next year, we will continue to see your year over your growth.
Throughout the whole year of next year, we will continue to see year on year over year growth.
Charlie Chan: Okay. Thanks, Joseph. Just a look back, right? When did you start to see or feel the so-called rush orders? Can you give us a kind of a timing when did you start to see that?
Charlie Chan: Okay. Thanks, Joseph. Just a look back, right? When did you start to see or feel the so-called rush orders? Can you give us a kind of a timing when did you start to see that?
Speaker 8: transcript
Speaker 8: Okay, thanks Joseph. So, just a look back, right? When teachers doesn't see your field, so for the rush order.
Okay. Thanks Joseph.
So just to look back.
Teachers doesn't see or feel for.
Speaker 8: transcript
Speaker 8: Can you give us a kind of timing when you start to see that?
For the rush orders.
Is it.
Kind of.
Timing when we can.
Joseph Tung: Okay, thanks Joseph. So, just to look back, when you choose to start to see your field, so for the rush orders. Can you give us a kind of timing when you want to start to see that? We have been seeing rush orders throughout the years, particularly at the last month of any particular quarter, we see some rush orders coming in across the board. I think the reason for that is, the customers are, like Ken mentioned, at this point more cautious about restocking.
<unk> started to see that.
Joseph Tung: We have been seeing rush orders throughout the years, particularly at the last month of any particular quarter. We see some rush orders coming in across the board. I think that's the reason, the reason for that is, you know, the customers are, like Ken mentioned, at this point, more cautious about restocking. Since there are, you know, ample capacity as well as wafers and also materials, I think the customers will tend to wait till the last minute until they see they have a clearer view of their upcoming demand, that they will put the orders in. So that's we.
Speaker 5: transcript
Speaker 5: We have been seeing rush orders throughout the years, particularly at the, you know,
Joseph Tung: We have been seeing rush orders throughout the years, particularly at the last month of any particular quarter. We see some rush orders coming in across the board. I think that's the reason, the reason for that is, you know, the customers are, like Ken mentioned, at this point, more cautious about restocking. Since there are, you know, ample capacity as well as wafers and also materials, I think the customers will tend to wait till the last minute until they see they have a clearer view of their upcoming demand, that they will put the orders in. So that's we.
Pat.
We have you seen Russell orders throughout the years, particularly at the.
Uh huh.
No.
Okay.
Speaker 5: transcript
Speaker 5: Last month of any particular quarter we were with...
Last month of Oh for any particular quarter, who are.
We see.
Speaker 5: transcript
Speaker 5: some brush holders coming in across the board. I think that's the reason, the reason for that is, you know, really the customers are, like Ken mentioned, at this point, more cautious about restocking. And since there are, you know,
Some rush orders coming in across the board.
That's the reason the reason for that is really the customers are.
Like can measure these at this point more cautious about restocking.
And since there are no.
Speaker 5: transcript
Speaker 5: you know, ample capacity as well as wafers and also materials. I think the customers would tend to wait till the last minute until they see they have a clearer view of their upcoming...
Ample capacity.
As well as wafers it also.
Materials.
These are the customers would tend.
Joseph Tung: And since there are ample capacity as well as wafers and also materials, I think the customers would tend to wait till the last minute. Until they see, they have a clear view of their upcoming demand that they will put the orders in. So that's why we have been seeing for the past few quarters, and we are seeing that still going on at this point.
Tend to wait till the last.
Until they see.
They have a clearer view out there.
Speaker 5: transcript
Speaker 5: demand that they will put the orders in. So that's what we have been seeing for the past few quarters.
Demand.
That will put that they will put the orders in.
Joseph Tung: What we have been seeing for the past few quarters. We are seeing that still going on as at this point.
Joseph Tung: What we have been seeing for the past few quarters. We are seeing that still going on as at this point.
So that's.
Well, we have been seeing.
For the past few quarters ended.
Speaker 5: transcript
Speaker 5: We are seeing that still going on at this point
We.
We are seeing are still going on at this point.
Operator: Next question is from Mr. Rick Hsu of Daiwa Securities.
Operator: Next question is from Mr. Rick Hsu of Daiwa Securities.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Rikshu of Dawa Sikure.
Next question is from Mr. <unk> Shah of <unk> Securities.
Rick Hsu: Yeah. Hi. Good evening. Good afternoon. Can you guys hear me?
Rick Hsu: Yeah. Hi. Good evening. Good afternoon. Can you guys hear me?
Speaker 9: transcript
Speaker 9: Yeah. Hi. Great. Good afternoon. Can you guys hear me? Yes.
Yeah, Hi.
Operator: Yes.
Operator: Yes.
Good afternoon can you guys hear me yes.
Rick Hsu: Okay, great. First question is regarding your capacity utilization across the board, the ATM. I think if I don't remember wrong, Ken said something about mid-sixties for Q3, right? I assume, given your slightly decline in Q4 ATM revenue, your loading should be below mid-sixties in Q4. Is that right?
Rick Hsu: Okay, great. First question is regarding your capacity utilization across the board, the ATM. I think if I don't remember wrong, Ken said something about mid-sixties for Q3, right? I assume, given your slightly decline in Q4 ATM revenue, your loading should be below mid-sixties in Q4. Is that right?
Speaker 9: transcript
Speaker 9: First question is regarding your capacity utilization across the water ATM. I think if I don't remember wrong, can't say something about mid-60s or Q3, right? So I was...
Okay great.
First question.
Rick Hsu: Next question is from Mr. Rik Shu of Taiwan Securities. Yeah, hi. Good afternoon. Can you guys hear me? Yes. Okay, great.
Regarding your capacity.
Capacity utilization across the board the a T M I.
If I don't remember wrong, Ken said something about mid sixties will Q3, right. So I assume.
Rick Hsu: First question is regarding your capacity utilization across the board ATM. I think if I don't remember wrong, Ken said something about mid-60s or Q3, right? So I assume given your slightly declined in Q4 ATM revenue. So your loading should be below mid-60s in Q4, is that right? It will be slightly lower than 65 years.
Given you are likely to decline in Q4 ATM revenue. So your loadings cheaper below mid sixties in Q4 is that right.
Rick Hsu: Okay, great.
Joseph Tung: It will be slightly lower than 65, yes.
Joseph Tung: It will be slightly lower than 65, yes.
It will be slightly lower than 65 years.
Rick Hsu: Okay, great. Second question. Your foundry partners like TSMC, UMC see some good early signs of demand stability from PC and smartphone consumer electronic products. Do you guys agree? If so, do you see any counter-seasonal possibility for your Q1 loading, assuming there is early sign recovery, demand recovery from this consumer space?
Rick Hsu: Okay, great. Second question. Your foundry partners like TSMC, UMC see some good early signs of demand stability from PC and smartphone consumer electronic products. Do you guys agree? If so, do you see any counter-seasonal possibility for your Q1 loading, assuming there is early sign recovery, demand recovery from this consumer space?
Speaker 9: transcript
Speaker 9: OK, great. Second question. Your foundry partners, like the TSMP and UMC, see some good early signs of demand.
Okay great.
Question Your foundry partners that could get them here you, obviously see some good.
Early signs of.
Demand stability from PC and smartphone consumer electronic products.
Rick Hsu: Second question, your thoughts upon those like the TSMT and UMC see some good early signs of demand, stability from PC and smartphone consumers electronic products. Do you guys agree? And if so, do you see any count of seasonal possibilities for your Q1 loading? Assuming there is an early summary, demand recovery from this consumer space. Well, there are spotty signs of optimism, but you know, and demand remains to be seen. It could be some volatility in 2023, you know, but we believe that things are starting to look up. And that's why we, like I said earlier, we are cautiously optimistic about next year.
Speaker 9: transcript
Speaker 9: Do you guys agree? And if so, do you see any countless pieces of possibility for you to
Do you guys agree and if so do you see any counter seasonal probability people, you'll Q1 building that's looming in the early recovery demand recovery from this kind of few months.
Joseph Tung: Well, there are spotty signs of optimism, but, you know, end demand remains to be seen. There could be some volatility in 2023. You know, but we believe that things are starting to look up. That's why we, like I said earlier, we are cautiously optimistic about next year.
Brad Lin: All right, thank you so much. Thank you.
Oh.
Joseph Tung: Well, there are spotty signs of optimism, but, you know, end demand remains to be seen. There could be some volatility in 2023. You know, but we believe that things are starting to look up. That's why we, like I said earlier, we are cautiously optimistic about next year.
Speaker 5: transcript
Speaker 10: Well, there are spotty signs of optimism, but you know, Andy Mann remains to be seen.
Well they are spotty signs of optimism, but you know and demand remains to be seen.
Speaker 10: transcript
Speaker 11: There could be some volatility in 2023. But we believe that things are starting to look up. And that's why we are, like I said earlier, we are cautiously optimistic about next year. All right, thank you so much.
There could be some volatility in 'twenty three.
Neil.
I believe that things are.
Starting to look up.
That's why we are legacy.
As I said earlier, we are cautiously optimistic about next year.
Rick Hsu: All right. Thank you so much.
Rick Hsu: All right. Thank you so much.
Joseph Tung: Thank you.
Joseph Tung: Thank you.
Alright. Thank you so much thank you.
Good.
Operator: Thanks, Rick. Next question is from Brad Lin of BOA.
Operator: Thanks, Rick. Next question is from Brad Lin of BOA.
Thanks Scott.
Next question is from Brent Mayne.
Of BLA.
Brad Lin: Hello. Hi. Thanks for taking my question. I have two questions, one on generative AI and second on the, well, silicon photonics. Basically, firstly, we are encouraged to learn the management's positive comments on the new generation of the consumer demand. I'm quite curious about what kind of the new application should we expect for the consumer market, and what are the applications that are in sight for the ASE. Also, what time do we expect it to, well, take off? Thank you.
Brad Lin: Hello. Hi. Thanks for taking my question. I have two questions, one on generative AI and second on the, well, silicon photonics. Basically, firstly, we are encouraged to learn the management's positive comments on the new generation of the consumer demand. I'm quite curious about what kind of the new application should we expect for the consumer market, and what are the applications that are in sight for the ASE. Also, what time do we expect it to, well, take off? Thank you.
Brad Lin: Next question is from Brad Lin of B.O.A. Hello, hi. Thanks for taking my question. I have two questions. One on generative AI and second on the three on photonics. So basically, firstly, we are encouraged to learn the management's positive comments on the new generation of the consumer demand. I'm quite curious about what kind of the new applications we expected for the consumer market and how are the applications that are inside for the ASE and also what time do we expect it to well take off.
Speaker 11: transcript
Speaker 12: Hello, hi, thanks for taking my question. I have two questions
Hello, Hi, Thanks for taking my question I have two questions why norrington narrative AI as taken out already.
Speaker 11: transcript
Speaker 12: one on generative AI and second only well three come photonics. So basically the first we are encouraged to learn the management's positive comments on the new generation of the consumer demand. I'm quite curious about what kind of the new applications we expected for the consumer market and and how are the applications that are inside.
K Cup photonics, so basically there firstly we.
We are encouraged to learn the management's positive comment on the new generation of that consumer demand.
Hi, curious about what kind of the new application should we expect that.
For the consumer market and and are the applications that are inside for a Z and <unk> are tied to we expect it to well take off thank you.
Speaker 11: transcript
Speaker 12: for the ASE and also what time do we expect it to take off. Thank you.
Joseph Tung: Take off in what? In silicon photonics?
Joseph Tung: Take off in what? In silicon photonics?
Speaker 11: transcript
Speaker 12: Take a moment, what is the consequence? None of the new generation of the consumer demand, which may be brought by the generative AI.
Brad Lin: No, no. For the new generation of the consumer demand, which may be brought by the generative AI.
Taking all of them would be silicon photonics.
Brad Lin: No, no. For the new generation of the consumer demand, which may be brought by the generative AI.
No not for the newer generation of the consumer demand.
Which may be brought by the generative AI.
Joseph Tung: I think AI is coming, and we're expecting the AI technology to proliferate into so many different kinds of edge devices. You know, they will be the main thing for the next few years. It will be a mega driving force for the industry to grow, and we're certainly going to be well prepared for it. I think the real cream for us is not just the AI chip itself, but the proliferating applications into all different kinds of devices that will create tremendous peripheral chips demand for us to satisfy.
Joseph Tung: I think AI is coming, and we're expecting the AI technology to proliferate into so many different kinds of edge devices. You know, they will be the main thing for the next few years. It will be a mega driving force for the industry to grow, and we're certainly going to be well prepared for it. I think the real cream for us is not just the AI chip itself, but the proliferating applications into all different kinds of devices that will create tremendous peripheral chips demand for us to satisfy.
Speaker 5: transcript
Speaker 5: I think AI is coming and we are expecting the AI technology to proliferate into so many different kinds of edge devices.
I think AI is coming is coming and we.
Brad Lin: Thank you. Take a look at what is the consequence? Not for the new generation of the consumer demand, which may be brought by the generative AI. I think AI is coming and we are expecting the AI technology to proliferate into so many different kinds of edge devices and you know, it will be the main thing for the next few years and will be a mega driving force for the industry to grow and will certainly be well prepared for it.
We're expecting the.
Our technology to proliferate into so.
So many different kinds of edge.
Speaker 5: transcript
Speaker 5: And, you know, it will be the main thing for the next few years. It will be a mega driving force for the industry to grow. And we're certainly going to be well prepared for it. I think the real cream for us is not just the AI chip itself, but the proliferating applications into all different kinds of devices.
<unk>.
And you know.
It will be the main thing for the next few years.
It will be a mega a driving force for the industry to grow.
Certainly.
I'm going to be well prepared for it.
I think the.
The real cream for us is not just the AI.
<unk> itself, but the are proliferating.
Vacations into all different kinds of devices.
Speaker 5: transcript
Speaker 10: that will create tremendous peripheral chips, demand for us to satisfy.
That will create a tremendous.
Brad Lin: I think the real cream for us is not just the AI chip itself but the proliferating applications into all different kinds of devices that will create tremendous peripheral chips demand for us to satisfy. So that's a structural claim and we should see a lot of the new applications to come in a coming year. I think the moment it will start to really start to accelerate towards 2024. Got it, got it.
Peripheral chips are demand for us.
Brad Lin: Got it. That's a structural trend, and then we should see a lot of the new applications to come in, upcoming years, in AI.
Brad Lin: Got it. That's a structural trend, and then we should see a lot of the new applications to come in, upcoming years, in AI.
Two to satisfy.
Speaker 5: transcript
Speaker 5: So that's a structural trend, and we should see a lot of the new applications to come in the coming years. And I think the momentum will start to accelerate going into 2024.
Got it so that's a structural tray and then we should see a lot of the new applications with <unk> upcoming years.
Joseph Tung: Exactly, yes.
Joseph Tung: Exactly, yes.
Brad Lin: Thank you.
Brad Lin: Thank you.
Joseph Tung: I think the momentum will really start to accelerate going into 2024.
Joseph Tung: I think the momentum will really start to accelerate going into 2024.
And I think your momentum will start to.
We really start to accelerate going into 2024.
Brad Lin: Got it. My second question is on the CPO. We have learned ASE started development of the CPO or silicon photonics for a couple of years during the SEMICON. May we learn the opportunities and also the implication of the new technology, and what are the key barriers or challenges for ASE here in this new technology? Thank you.
Brad Lin: Got it. My second question is on the CPO. We have learned ASE started development of the CPO or silicon photonics for a couple of years during the SEMICON. May we learn the opportunities and also the implication of the new technology, and what are the key barriers or challenges for ASE here in this new technology? Thank you.
Speaker 11: transcript
Speaker 12: Got it. Got it. And then my second question is on the CPO. So we have learned as he started development of the CPO or you know, photonics for a couple of years during the semi comp. So may we learn the opportunities and also the implication of the new technology and what the key barriers or challenges for AC here in this new technology. Thank you.
Got it got it and then my second question is on the C. P. O. So we have learned as he started development of the CP or photonics for.
A couple of years during the semi com. So may we learned the opportunities and also the amplification.
Ken Chan: And then my second question is on the CPO. So we have learned ASE started development of the CPO or the photonics for a couple of years during the semi-com. So may we learn the opportunities and also the implications of the new technology and what the key barriers or challenges for ASE here in this new technology. Thank you. Well, now being a technology guy, I think from what I've heard that's still a few years away.
Technology and hard at key barriers or challenges for ASE here in this new technology. Thank you well now be a technology Guy I think.
Joseph Tung: Well, not being a technology guy, I think, well, from what I heard, that's still a few years away. Right now we're still focusing on the silicon photonics chips packaging test. You know, going forward, I think the technology will just push the development of CPO and we're still at the investing stage. When the demand really come, we'll be ready for it.
Joseph Tung: Well, not being a technology guy, I think, well, from what I heard, that's still a few years away. Right now we're still focusing on the silicon photonics chips packaging test. You know, going forward, I think the technology will just push the development of CPO and we're still at the investing stage. When the demand really come, we'll be ready for it.
Speaker 5: transcript
Speaker 10: Well, now being a technology guy, I think. Well, from what I've heard, that's still a few years away.
Well for one four but what I heard that's still a few years away.
Speaker 5: transcript
Speaker 10: Right now we're still focusing on the
Right now, we're still focusing on the <unk>.
Speaker 5: transcript
Speaker 10: the Silicon photonics chefs packaging test. You're going forward. I think the technology will just push the development of CBO and we're still at the investing stage. And when the demand really come, we'll be ready for it.
The silicon Photonics chips pathogen test.
You know going forward I think the technology will just.
Ken Chan: Right now, we're still focusing on the sort of photonics chips packaging test. You know, going forward, I think the technology will just push the development of CPO and we're still at the investing stage and when the demand really comes, we'll be ready for it.
We'll push the development of our CPO and.
We're still at the we're still investing.
Stage.
When the when the.
Whether the demand will become a we'll be ready for it.
Okay.
Operator: Next question is from Miss Sunny Lin of UBS.
Operator: Next question is from Miss Sunny Lin of UBS.
Speaker 3: transcript
Speaker 3: Next question is from Miss Sunny Lin of UBS.
Next question is from Mr. <unk> of UBS.
Sunny Lin: Hi. Could you hear me okay?
Sunny Lin: Hi. Could you hear me okay?
Operator: Yes.
Operator: Yes.
Hi could you hear me okay, yes.
Sunny Lin: Thank you very much for taking my questions. My first question is on interposer-based 2.5D package. I think currently the mainstream solution is based on silicon interposer. But there's increasing discussions on the technology move into RDL-based 2.5D package. Based on your engagement with the key customers, when do you think that shift will start to happen? For ASE, I assume that you should be getting more opportunities if the industry does start to make that shift.
Sunny Lin: Thank you very much for taking my questions. My first question is on interposer-based 2.5D package. I think currently the mainstream solution is based on silicon interposer. But there's increasing discussions on the technology move into RDL-based 2.5D package. Based on your engagement with the key customers, when do you think that shift will start to happen? For ASE, I assume that you should be getting more opportunities if the industry does start to make that shift.
Speaker 12: transcript
Speaker 13: Thank you very much for picking my questions. So my first question is on Interpol service 2.5D package.
Yes.
Thank you very much for taking my questions. So my first question is on.
Sunny Lin: Next question is from Ms. Sunny Lin of UBS. Hi, could you hear me? Okay. Yes. Thank you very much for picking my questions.
Is that also a base to qualify the package.
Speaker 12: transcript
Speaker 13: I think currently the mastering solution is based on silicon interposer, but there's increasing discussions on the technology move into RDL-based 2.5D package.
I think currently the messaging solution is based on silicone couple Sir.
Are they asking closing discussions on the technology move into RTL based Ah <unk>.
Ken Chan: So my first question is on Interpol sir base 2.5D package. I think currently the mainstream solution is based on the Polka Interpol sir, but there's increasing discussions on the technology move into RDL based 2.5D package. And so based on your engagement with the key customers, when do you think that should start to happen? And for ASE, I assume that you should be getting more opportunities if the industry does start to make that shift?
Speaker 12: transcript
Speaker 13: And so based on your engagement with the key customers, when do you think that should start to happen? And for ASE, I assume that you should be getting more opportunities if the industry does start to make that shift.
Eddie package and so based on your engagement with our key customers. When do you think that should all start to happen and for ASE.
Ken Chan: Yeah, we're seeing that happening now and we are we are aggressive the engaging of customers who are looking for more cost-effective solutions. You know, at this point, I think if you call Silicon based, Silicon Interpol sir base, it's still a bit the more matured kind of technology and I think the RDL based, you know, there will still be some discussions in terms of the design or the process of it that needs to be worked out individually with the customers that we are engaging now.
I assume that you should be getting more opportunities.
Joseph Tung: Yeah, we're seeing that happening now, and we are aggressively engaging our customers who are looking for a more cost-effective kind of solution. You know, at this point, I think if you call silicon-based, silicon interposer-based, it's still a bit more matured kind of technology. I think the RDL-based, you know, there will still be some discussions in terms of the design or the process of it that needs to be worked out individually with the customers that we are engaging now. We are in mass production at this point, but with limited amount.
She does start to make that shift.
Joseph Tung: Yeah, we're seeing that happening now, and we are aggressively engaging our customers who are looking for a more cost-effective kind of solution. You know, at this point, I think if you call silicon-based, silicon interposer-based, it's still a bit more matured kind of technology. I think the RDL-based, you know, there will still be some discussions in terms of the design or the process of it that needs to be worked out individually with the customers that we are engaging now. We are in mass production at this point, but with limited amount.
Speaker 5: transcript
Speaker 10: Yeah, we're seeing that happening now and we are we are aggressively engaging our customers who are looking for a more cost effective kind of solution. You know at this point I think
Yeah, we're seeing that happening now and we are we are aggressively engaging our customers.
Who are looking.
For a more cost effective.
Solution.
Euro at this point I think.
Speaker 5: transcript
Speaker 10: if you call silicon base silicon interposer base is still is still a bit
If you call it silicon base Silicon and of course, the base is still there's still a bit.
Speaker 5: transcript
Speaker 10: the more matured kind of technology and I think the RDL based, you know.
The more matured kind of technology.
The.
Speaker 5: transcript
Speaker 10: There will still be some...
The RVO base.
There will still be some.
Speaker 5: transcript
Speaker 10: discussions in terms of the design or the process of it that needs to be worked out individually with the customers that we are engaging now. We are in mass production at this point, but with limited amount, but we see this has a pretty good
Uh huh.
Discussions are in terms of the design or the process of it.
That needs to be worked out.
Visually with the customers that we are engaging now.
We are in mass production at this point.
Joseph Tung: We see this has a pretty good potential, and we will continue to make investment into it and continue to work very closely with our customers to start expanding that part of the business for us.
Joseph Tung: We see this has a pretty good potential, and we will continue to make investment into it and continue to work very closely with our customers to start expanding that part of the business for us.
With limited amount, but we see this as a critical.
Speaker 5: transcript
Speaker 10: potential and we will continue to make investment into it and continue to work very closely with our customers to to start expanding that part of the business.
Potential and we will continue to make investment into it.
Ken Chan: We are in mass production at this point, but with limited amount, but we see this has a pretty good potential and we will continue to make investment into it and continue to work very closely with our customers to start expanding that part of the business for us. Got it.
We continue to work very closely with our customers too.
To start expanding that part of the business for us.
Sunny Lin: Got it. A quick follow-up on this part of the business. In terms of the competition, and obviously the leading foundry is also aggressive on the overall technology roadmap.
Sunny Lin: Got it. A quick follow-up on this part of the business. In terms of the competition, and obviously the leading foundry is also aggressive on the overall technology roadmap.
Speaker 12: transcript
Speaker 13: Got it. So a quick follow up on this part of the business. And so in terms of the competition, obviously the leading foundry is also aggressive on the overall technology roadmap. Some of your competitors are also
Got it so a quick follow up on this part of the process.
And so in terms of the competition.
Obviously, the leading foundry ECL, so aggressive on the overall technology roadmap.
Joseph Tung: Mm-hmm.
Joseph Tung: Mm-hmm.
Sunny Lin: Some of your competitors are also focusing on exploring the opportunities. For ASE, what are some of the competitive advantage that you think you have when competing with the key projects?
Sunny Lin: Some of your competitors are also focusing on exploring the opportunities. For ASE, what are some of the competitive advantage that you think you have when competing with the key projects?
You are our.
Ken Chan: So a quick follow-up on this part of the business. And so in terms of competition, obviously the leading boundary is also aggressive on the overall technology roadmap. Some of your competitors are also focusing on exploring the opportunities and so for ESC, what are some of the competitive advantage that you think you have when competing with the key projects? Well, our long partnering relationship with the Foundry or D Foundry certainly give us an edge and, you know, given our scale and the technology that we have been brewing over the years, I think we are certainly ahead of our competitors and in whatever products that we are building today or whatever technology that we're developing.
Speaker 12: transcript
Speaker 13: focusing on exploring the opportunities. And so for ESC, what are some of the competitive advantage that you think you have when competing with the key project?
Competitors are also.
Focusing on exploiting the opportunities.
So for ESC, what are some of the competitor.
Evan hedged how do you think you have a when competing with our key projects.
Joseph Tung: Well, our long partnering relationship with the foundry certainly give us an edge. You know, given our scale and the technology that we have been growing over the years, I think we are, you know, certainly ahead of our competitors and in whatever products that we are building today or whatever technology that we're developing. Competition is given. There's always gonna be competition. The key here is really to, you know, stay focused and, you know, continue to bring out the satisfactory offering to our customers as well as our, you know, upstream foundry partners.
Joseph Tung: Well, our long partnering relationship with the foundry certainly give us an edge. You know, given our scale and the technology that we have been growing over the years, I think we are, you know, certainly ahead of our competitors and in whatever products that we are building today or whatever technology that we're developing. Competition is given. There's always gonna be competition. The key here is really to, you know, stay focused and, you know, continue to bring out the satisfactory offering to our customers as well as our, you know, upstream foundry partners.
Speaker 5: transcript
Speaker 5: Well, our long partnering relationship with the foundry or the foundry certainly give us an edge. And, you know, given our scale and the technology that we have been brewing over the years, I think we are certainly ahead of our competitors in whatever products that we are building today, or whatever technology that we are developing.
Well well all along.
Having a relationship with the foundry or the foundry.
So it gives us an edge and <unk>.
Given our scale and the.
Technology that we have been brewing.
Over the years I think we are certainly ahead of our competitors and whatever products that we are building today or whatever technology that we're developing mode.
Speaker 5: transcript
Speaker 10: So, you know, the competition is given. There's always going to be competition. The key here is we...
So you know we the competition has given the there's always going to be competition.
The key here is really to Neil.
Speaker 5: transcript
Speaker 10: stay focused and you'll continue to bring out the satisfactory offering to our customers.
Stay focused and continue to bring out the.
Ken Chan: So, you know, the competition is given, there's always going to be competition. The key here is really to stay focused and continue to bring out the satisfactory offering to our customers as well as our stream fund partners.
Satisfactory.
Speaker 5: transcript
Speaker 8: as well as our, you know, upstream Foundry partner.
Turning to our customers.
As well as our upstream.
Operator: Next question is from Mr. Zhihong of China Renaissance.
Operator: Next question is from Mr. Zhihong of China Renaissance.
<unk> partners.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Zihong of China Renaissance.
Next question is from Mr. Xie Houghton of China Renaissance.
Zhihong: Hi. Thank you. Yeah, my first question is regarding the pricing environment. So far seems to be quite stable, but would there be a risk that the pricing environment would be more aggressive, when the inflection point really kicks in, when the market really bottoms?
Szeho Ng: Hi. Thank you. Yeah, my first question is regarding the pricing environment. So far seems to be quite stable, but would there be a risk that the pricing environment would be more aggressive, when the inflection point really kicks in, when the market really bottoms?
Speaker 13: transcript
Speaker 14: Hi, thank you. My question is regarding the pricing environment so far seems to be quite stable, but would that be a risk that the pricing environment would be more aggressive and an impression point really, a significant, but when the market...
Hi. Thank you Yeah. My question first question is regarding the pricing environment. So far seems to be quite stable, but would that be a risk that the pricing environment will be more aggressive and branded and fashion quantity kicks in there mark.
Zihong: Next question is from Mr. Zihong of China Renaissance. Hi, thank you. My question is regarding the rising environment so far seems to be quite stable.
Joseph Tung: Well, pricing is, you know, pricing pressure is always there and, but given our scale and our leading position, I think our pricing is more resilient than our competitors. We will continue to find the most suitable pricing strategy for to satisfy ourselves as well as our customers.
Joseph Tung: Well, pricing is, you know, pricing pressure is always there and, but given our scale and our leading position, I think our pricing is more resilient than our competitors. We will continue to find the most suitable pricing strategy for to satisfy ourselves as well as our customers.
Great got it.
Speaker 5: transcript
Speaker 8: Well, pricing is, you know, pricing pressure is always there. And but given our scale, and our leading position, I think our pricing is more resilient than our competitors.
Well pricing is crazy prices is always there and.
Zihong: Would that be a risk that the rising environment would be more aggressive when the inflation point really exceeds, but when the market is great at bottoms? Well, pricing is always there and given our scale and our leading position, I think our pricing is more resilient than our competitors. And we will continue to find the most suitable pricing strategy for ourselves as well as our customers. Hi, I see. All right.
But given our scale.
And our leading position that they are pricing is more resilient than our competitors.
Speaker 5: transcript
Speaker 5: And we will continue to find the most suitable pricing strategy for to satisfy ourselves as well as our customers.
And we will continue to find the most suitable pricing strategy for two says ourselves as long as our customers.
Zhihong: I see. All right. Same question regarding the CapEx this year and also any initial outlook for next year's CapEx.
Szeho Ng: I see. All right. Same question regarding the CapEx this year and also any initial outlook for next year's CapEx.
Speaker 13: transcript
Speaker 14: I see. All right. Same question regarding the CapEx this year and also any initial outlook for next year's CapEx.
I see alright and.
Quick question regarding the Capex this year and also.
Joseph Tung: Nothing for next year, but this year we are sticking to our original CapEx, roughly for equipment about $1 billion. The split of it will be around 50% in assembly, 30% in tests, 17% in EMS, and 3% for material.
Initial outlook for next year's Capex.
Joseph Tung: Nothing for next year, but this year we are sticking to our original CapEx, roughly for equipment about $1 billion. The split of it will be around 50% in assembly, 30% in tests, 17% in EMS, and 3% for material.
Speaker 5: transcript
Speaker 8: Nothing for next year, but this year we are sticking to our original KAPX roughly for equipment about a billion dollars and the split of it will be around 50% in assembly, 30% in tests, 17 in EMS and 3% for material.
Nothing for next year, but this year, we are sticking to our original.
Zihong: And same question regarding the cat packs this year, and also any initial look for next year's cat packs. Nothing for next year, but this year we are sticking to our original cat packs roughly for equipment about a billion dollars. And the split of it will be around 50% in assembly, 30% in tests, 17 in EMS, and 3% for material.
Capex roughly equivalent about opioid dollar.
The split of it will be over rub, 50% in our assembly, 30% in tests 17 in EMS.
MFS and Super simple.
Material.
Operator: Next question is from Mr. Gokul Hariharan of J.P. Morgan.
Operator: Next question is from Mr. Gokul Hariharan of J.P. Morgan.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Goku Haruharan of JP Morgan.
Next question is from Mr. <unk> of J P. Morgan.
Gokul Hariharan: Yeah, hi. Thanks for taking my question. For some of these, 2.5D packaging and advanced generative AI-related products, could you talk a little bit about how much more capital intensive these investments are? I think, long time back we used to talk about $1.1 revenue for $1 of CapEx, for flip chip and much lower for wire bond. Could you talk a little bit about how we are seeing this capital intensity going up for some of these investments? Second, what is ASE's stance on taking some customer supported capacity build ups? Some of your competitors or some of your peers have kind of done some of the capacity expansion in partnership with some of these AI customers.
Gokul Hariharan: Yeah, hi. Thanks for taking my question. For some of these, 2.5D packaging and advanced generative AI-related products, could you talk a little bit about how much more capital intensive these investments are? I think, long time back we used to talk about $1.1 revenue for $1 of CapEx, for flip chip and much lower for wire bond. Could you talk a little bit about how we are seeing this capital intensity going up for some of these investments? Second, what is ASE's stance on taking some customer supported capacity build ups? Some of your competitors or some of your peers have kind of done some of the capacity expansion in partnership with some of these AI customers.
Speaker 4: transcript
Speaker 4: Hi, thanks for taking my question. So for some of these 2.5D packaging and advanced engineering related products.
Yeah, Hi, Thanks for taking my question.
Means Dupont D packaging and advanced.
Ken Chan: Next question is from Mr. Goukou, Haru Harun of JP Morgan. Hi, thanks for taking my question. So for some of these 2.5D packaging and advanced, you're going to do your little products. Could you talk a little bit about how much more capital and then see these investments are. I mean, long time back, we used to talk about $1.1 revenue for $1 cat packs for flagship and much lower for live bond. Could you could we talk a little bit about how we are seeing this capital density going up for some of these investments.
Speaker 4: transcript
Speaker 4: Could you talk a little bit about how much more capital intensive these investments are? I think long time back, we used to talk about $1 revenue for $1 of capex for flip chips and much lower for live bond. Could you could we talk a little bit about how we are seeing this capital density going up for some of these investments?
But could.
Could you talk a little bit about how much more capital C D.
All I need.
But I'm, hoping you could talk about.
1.1.
Revenue for $1 of Capex, Portland jumped on a much lower bar by bond.
Could you could you talk a little bit about how the athene.
Speaker 4: transcript
Speaker 4: Second, what is the ASB's stance on taking some customer supported capacity buildups? Some of your competitors or some of your peers have kind of done some of the capacity expansion in partnership with some of these AI customers. Any thoughts on how ASB is approaching this kind of capacity build out? And lastly, I think.
I'm going to be going up automotive allotment.
So again, a one off.
It's bonds on getting some customer.
Border capacity buildups.
Some of your company doesn't look good to us.
But in some of the about expansion in partnership with our customers.
Ken Chan: Second, what is the ASB stands on taking some customer supported capacity buildups. Some of your competitors or some of your peers have kind of done some of the best expansion and partnership with some of the AI customers. Any thoughts on how ASB is approaching this kind of capacity buildout. Lastly, I think we've been seeing capex, capex declining since 2021. So do we feel like we have sufficient inflection where we start to have to add some capacity in these capex in next year.
Gokul Hariharan: Any thoughts on how ASE is approaching this kind of capacity build-out? Lastly, I think we've been seeing CapEx cuts, CapEx declining since 2021. Do we feel like we are reaching an inflection where we start to have to add some capacity, increase CapEx in next year? Or you think given utilization is still mid-60s, next year outlook is still not that clear to guide for any meaningful CapEx increase. Thank you.
Gokul Hariharan: Any thoughts on how ASE is approaching this kind of capacity build-out? Lastly, I think we've been seeing CapEx cuts, CapEx declining since 2021. Do we feel like we are reaching an inflection where we start to have to add some capacity, increase CapEx in next year? Or you think given utilization is still mid-60s, next year outlook is still not that clear to guide for any meaningful CapEx increase. Thank you.
Customers.
Thoughts on how he is approaching it.
The basketball now.
Speaker 4: transcript
Speaker 4: We've been seeing CapExX, CapEx declining in 2021. So do we feel like we are still in section where we start to have to add some capacity in these CapExXX in next year? Or you think the utilization is still in 60s? Next year, our flow goes to not bad clear to guide for a meaningful CapExX increase. Thank you.
Luckily.
Hmm.
Maybe being Capex cuts.
<unk> declined to make any one so the likelihood we gained inflection.
You start to add some capacity.
Capex in.
In next year or do you think utilization of <unk>.
Blown coastal.
Bob do you want to.
Joseph Tung: Well, like I said, we are seeing a better overall market environment for next year. It wouldn't be surprised that next year's CapEx, although I don't have the number here, but I do believe that the CapEx that we need to put in for next year will be higher than this year. In terms of, you know, the advanced packaging, I think, like we said, right now we're still at a very early stage in developing this part of the business. I think we don't have sufficient data points to come up with a real or more precise investment intensity at this point.
Joseph Tung: Well, like I said, we are seeing a better overall market environment for next year. It wouldn't be surprised that next year's CapEx, although I don't have the number here, but I do believe that the CapEx that we need to put in for next year will be higher than this year. In terms of, you know, the advanced packaging, I think, like we said, right now we're still at a very early stage in developing this part of the business. I think we don't have sufficient data points to come up with a real or more precise investment intensity at this point.
Speaker 5: transcript
Speaker 10: Well, we are we are seeing a better.
Albert any meaningful bump.
Okay.
Well, let me say, we are we are seeing a better.
Ken Chan: Or you think the realization is to be 60 next year outflow because still not not not that clear to guide for a meaningful capex increase. Well, like I said, we are seeing a better. Overall, multi-environments for next year. It wouldn't be surprised that we next year's CAPEX, although I don't have the number here, but I do believe that the CAPEX that we need to put in for next year will be hired in this year.
Speaker 5: transcript
Speaker 5: overall market environment for next year. It wouldn't be surprised that we, next year's CAPEX, although I don't have the number here, but I do believe that the CAPEX...
Our overall market environment for next year.
It wouldn't be surprised that we next year's Capex, although I don't have the number here, but I do believe that the capex.
Speaker 5: transcript
Speaker 8: that we need to put in for next year will be higher than this year.
But we need to put in for next year will be higher than this year.
Speaker 5: transcript
Speaker 10: In terms of the, you know, the advanced packaging, I think the like we said,
In terms of the no.
The events packaging I think the.
Speaker 5: transcript
Speaker 10: Right now we're still at the early stage and developing this part of the business. And so I think we don't have its sufficient data points.
Like we said.
The right now is we're still.
Earlier early very early stage and developing this part of the business and so I think we do we don't have a sufficient data points.
Ken Chan: In terms of the events, packaging, I think, like we said, right now, we are still at the early stage and developing this part of the business. So I think we don't have its sufficient data points to come up with a real or more precise investment intensity at this point. Plus, like I mentioned earlier on, whatever investment that we are on the table today for this type of products is mostly for debuddling the current capacity that we have.
Speaker 5: transcript
Speaker 10: to come up with a real or more precise investment intensity at this point. Plus, like I mentioned earlier on, whatever investment that we are on the table today for this type of product.
To come up with a real or more precise.
Joseph Tung: Like I mentioned earlier on, you know, whatever investment that we are on the table today for this type of products is mostly for debottlenecking the current capacity that we have. I don't have a real number for, in terms of capital intensity for this type of product until we collect more data points and until this part of the business becomes a large enough pool of business that we can come up with the more meaningful, you know, numbers for it.
Investment intensity at this point, but.
Joseph Tung: Like I mentioned earlier on, you know, whatever investment that we are on the table today for this type of products is mostly for debottlenecking the current capacity that we have. I don't have a real number for, in terms of capital intensity for this type of product until we collect more data points and until this part of the business becomes a large enough pool of business that we can come up with the more meaningful, you know, numbers for it.
As I mentioned.
Earlier on you do whatever investment that we are on the table today for this type of products.
Speaker 5: transcript
Speaker 8: is mostly for debuddling the current capacity that we have. So I don't have a real number for in terms of capital intensity for this type of product until we collect more data points and until this part of the business becomes a...
It's mostly for.
Deep boggling, the Quebec is the current capacity that we have so I don't have a real number four in terms of capital intensity to the cyber product until we collect more data points and.
Until this this part of the business becomes a.
Speaker 5: transcript
Speaker 10: larger enough pool of this is that we can come up with the more meaningful
Ken Chan: So I don't have a real number for in terms of capital intensity to this type of product until we collect more data points and until this part of the business becomes a larger enough pool of business that we can come up with the more meaningful numbers for it. I think whatever we are going to do is, really, we will look at the demand, we will look at the technology that's required or the equipment that's required, and also the business terms that we can get. So when we put the investment in, it will be suitable for the demand and also so that it creates the justifiable financial return for us.
Larger enough.
Poor business that we could come up with the <unk>.
Uh huh.
A more meaningful.
Joseph Tung: I think, you know, whatever we're gonna do is really we will look at the demand, we will look at the technology that's required or the equipment that's required, and also the business terms that we can get. When we put the investment in, it will be suitable for the demand and also can create a justifiable financial return for us.
The real.
Joseph Tung: I think, you know, whatever we're gonna do is really we will look at the demand, we will look at the technology that's required or the equipment that's required, and also the business terms that we can get. When we put the investment in, it will be suitable for the demand and also can create a justifiable financial return for us.
Speaker 5: transcript
Speaker 8: I think whatever we're going to do is really, we will look at the demand, we will look at the technology that's required or the equipment that's required, and also the business terms that we can get. So when we put the investment in, it will be suitable for the demand and also that could create a justifiable financial return for us.
Numbers for it.
I think youll whatever we are we're going to do is really we will look at the demand we will look at the.
<unk> technology, that's required or the equipment is required and also the business terms that we could get.
Ken Chan: Okay.
When we put the investment in it will be suitable for the sort of demand. It also.
Okay created justifiable financial return for us.
Gokul Hariharan: Okay. Got it. My second question is on the adoption of chiplets. We've seen a lot of that happen in the HPC side. Broadly, could you talk a little bit about how the chiplet adoption helps or changes ASE's role? Either adds to it or takes away something, but just how you think about it. More specifically, do you see more chiplet-related packaging potentially getting adopted even in the communication, the mobile smartphone segment, which is largely monolithic right now, looking out maybe a couple of years in terms of what you see and have discussions with your key mobile customers?
Gokul Hariharan: Okay. Got it. My second question is on the adoption of chiplets. We've seen a lot of that happen in the HPC side. Broadly, could you talk a little bit about how the chiplet adoption helps or changes ASE's role? Either adds to it or takes away something, but just how you think about it. More specifically, do you see more chiplet-related packaging potentially getting adopted even in the communication, the mobile smartphone segment, which is largely monolithic right now, looking out maybe a couple of years in terms of what you see and have discussions with your key mobile customers?
Speaker 4: transcript
Speaker 4: Okay, got it. My second question is on the adoption of triplets. We've seen a lot of that happen in the...
Okay.
My second question is on <unk>.
Alright.
Chip.
Speaker 4: transcript
Speaker 4: in the HPC side. Broadly could you talk a little bit about how the chiplet adoption helped our changes?
I mean, it's been a lot of that happening in a b.
In the HP right.
Rob could you talk a little bit about how the chip lip adoption helped odd changes.
Ken Chan: My second question is on the adoption of triplets. We have seen a lot of that happen in the HPC side. Broadly could you talk a little bit about how the triplet adoption helps or changes in the ASP role, either adds to it or takes away something but just how you think about it. And most specifically, we use the more triplet related packaging potentially getting adopted even in the communication, the mobile smart phone segment which is mostly monolithic right now looking out and be a couple of years in terms of what you see me and have discussions with your key mobile customers.
Speaker 4: transcript
Speaker 4: ASP role either adds to it or takes away something but just how you think about it. And more specifically, do you see more chiplet related packaging potentially getting adopted even in the communication, the mobile smartphone segment, which is largely monolithic right now, looking out maybe a couple of years in terms of what you see and have discussions with your key mobile customers.
Our A&P growing Oh, that's to add Doug.
But just how you think about it and more specifically.
Do you see more chip packaging.
Packaging.
Potentially getting adopted even in the communication the mobile smartphone languages, largely bonanno takeaway, Bob looking out maybe a couple of deals in terms of what are you seeing an uptick.
Joseph Tung: Well, I guess the chiplet is certainly the, you know, technology that's required for, especially for advanced nodes. You know, there's physical boundaries that we need to break through the chiplet packaging. It is a growing trend. At this point, we think it's still predominantly in the HPC area or networking. When or how fast it will move into other areas, I think it will take some time for us to have a better grasp of its development.
Joseph Tung: Well, I guess the chiplet is certainly the, you know, technology that's required for, especially for advanced nodes. You know, there's physical boundaries that we need to break through the chiplet packaging. It is a growing trend. At this point, we think it's still predominantly in the HPC area or networking. When or how fast it will move into other areas, I think it will take some time for us to have a better grasp of its development.
Speaker 5: transcript
Speaker 10: Well, I guess Chiblet is certainly the technology that's required, especially for MS nodes. And there's physical boundaries that we need to break through the Chiblet packaging. So it is a going trend. And at this point, we've seen a lot
The question is with your key mobile customers.
Well I guess, a similar certainly the you know the the technique.
Technology, that's required for especially for our vessels.
There is physical bond movies that we'd need to breakthrough through the drill bit.
Ken Chan: Well, I guess the triplet is certainly the technology that's required, especially for our best notes and there's physical boundaries that we need to breakthrough through the triplet packaging. So it is going trend and we will at this point we sing, is still predominantly in the HPC area or networking, when or how fast it will move into other areas. I think it will take some time for us to have a better grasp of this development.
Packaging.
So it is a growing trend and we will at this point we see.
Speaker 5: transcript
Speaker 8: is still predominantly in the HPC area or networking. When or how fast it will move into other areas, I think it will take some time for us to have a better grasp of this development.
Thank you.
It's still predominantly in the SBC area networking.
When or how fast it will move into other areas.
I think it will take some time for us to.
To have a better grasp of all of its development.
Operator: Next question is from Bruce Lu of Goldman Sachs.
Operator: Next question is from Bruce Lu of Goldman Sachs.
Speaker 3: transcript
Speaker 3: Next question is from Bruce Lue of Gommasek.
Next question is from Bruce Lu of Goldman Sachs.
Bruce Lu: Hi. Joseph, I wanna ask about the dividend. Given your, you know, EBITDA is so much stronger than the CapEx, can we expect a higher dividend payout ratio moving forward, or at least for this year? You know, you are paying, you know, TWD 8, TWD 7 for the last two years, given the weakness of this year, but your cash flow is still very strong, right? Can we expect a higher payout ratio this year?
Bruce Lu: Hi. Joseph, I wanna ask about the dividend. Given your, you know, EBITDA is so much stronger than the CapEx, can we expect a higher dividend payout ratio moving forward, or at least for this year? You know, you are paying, you know, TWD 8, TWD 7 for the last two years, given the weakness of this year, but your cash flow is still very strong, right? Can we expect a higher payout ratio this year?
Speaker 7: transcript
Speaker 7: Hi Joseph, I want to ask about the dividend. Given your, you know, Aveda is so much stronger than the TAPAC, can we expect a higher dividend pay-out ratio moving forward or at least for this year? You know, you're paying, you know, $8, $7 for the last two years, given the weakness of this year, but your cash was still very strong. So can we expect a higher pay-out ratio this year?
Hi.
Joseph I wanted to ask about the dividend.
Yeah David.
Bruce Lu: Next question is from Bruce Lue of Goldman Sachs. Hi Joseph, I want to ask about the dividend. Given your, you know, maybe not, it's so much stronger than the Tech Tech.
So much stronger than the Capex.
And we expect a higher dividend payout ratio moving forward.
Joseph Tung: Can we expect a higher dividend pay average or moving forward, or at least for this year? You're paying, you know, $8, $7 for the last two years, given the weakness of this year. But your test was still very strong. So can we expect a higher pay average of this year? I think we have been paying 60 to 65% over the years.
At least for this year.
Paying $8 $7. The last two years given the weakness of this year, but cash flow is still very strongly so can we expect a higher payout ratio this year.
Joseph Tung: I think we have been paying 60% to 65% over the years. Well, this is not up to me to answer. I think this has to go through the board. You know, given the circumstances, I think we will have a good discussion on how we address this issue. Sorry, I can't.
Joseph Tung: I think we have been paying 60% to 65% over the years. Well, this is not up to me to answer. I think this has to go through the board. You know, given the circumstances, I think we will have a good discussion on how we address this issue. Sorry, I can't.
Speaker 5: transcript
Speaker 8: I think we have been paying 60 to 65 percent over the years and we'll.
Uh huh.
I think we have been pay 60% to 65% over the.
Speaker 5: transcript
Speaker 8: This is not up for me to answer. I think this has to go through the board and given this circumstance, I think we will have.
Yes, and a little.
This is not for me to answer I think this has to go through the board and.
You know given the circumstance I think we will have.
Speaker 5: transcript
Speaker 5: Good discussion on how we address this issue.
A good discussion on how we are how we address this issue.
Bruce Lu: Yeah. You mentioned I understand that just like, you know, you could maintain the 60, 70 percent, given that the earnings declined more than that. You know, we don't want to see the, you know, the delivery share goes down much. I mean, that's the investor feedback. Another question for the-
Bruce Lu: Yeah. You mentioned I understand that just like, you know, you could maintain the 60, 70 percent, given that the earnings declined more than that. You know, we don't want to see the, you know, the delivery share goes down much. I mean, that's the investor feedback. Another question for the-
Joseph Tung: Well, this is not up for me to answer, I think this has to go through the board. And, you know, given the circumstances, I think we will have a good discussion on how we address this issue. Sorry, I think. I understand that just like, you know, if you've maintained the 60 to 70% given by the earning decline more than that. So, you know, we don't want to see the, you know, the numbers shape will start much.
Speaker 7: transcript
Speaker 7: I understand that just like you know, you could maintain a 60-70% given by the earnings decline more than that. So we don't want to see the...
Alright.
No.
I understand that just right you could maintain a 60, 70% given by the earnings decline more than that so.
Speaker 7: transcript
Speaker 7: And now let's finish with.
We don't want to see the you know.
David I appreciate both fell in March.
Joseph Tung: Yeah, yeah. I understand.
Joseph Tung: Yeah, yeah. I understand.
Definitely investment B bench and all that.
Bruce Lu: Another question for your testing. I mean, I think I do recall in early 2022, management turns more aggressive in testing, which generate pretty stronger growth and earnings. However, if you look at from Q2, Q3, your testing revenue, the growth rate was substantially slower than your packaging business.
Bruce Lu: Another question for your testing. I mean, I think I do recall in early 2022, management turns more aggressive in testing, which generate pretty stronger growth and earnings. However, if you look at from Q2, Q3, your testing revenue, the growth rate was substantially slower than your packaging business.
Speaker 7: transcript
Speaker 5: Another question was your testing. I mean, uh,
Understood.
Another question Whats your testing.
Speaker 7: transcript
Speaker 7: I think I do recall in early 2022, I managed to return to more aggressive testing, which generally were pretty strong growths and earnings. However, if you look at from very good, very good order, you're testing revenue, the growth rate was substantially slower than you're packaging this.
I mean.
I think I do recall in early 2022 minutes returns more aggressively testing, which generally have a pretty strong growth in earnings. However, if you look at bonds.
Joseph Tung: I mean, just to invest in feedback.
Joseph Tung: Another question was your testing. I mean, I think I do recall in early 2022, management turns more aggressive in testing, which generally are pretty strong growth and earnings. However, if you look at it from the third quarter, your testing revenue, the growth rate was substantially slower than your packaging business. At the same time, your peers that are testing this, they're pretty good with, you know, very impressive share price.
Third quarter Youre testing revenue courseware was substantially slower than your packaging business.
Joseph Tung: Mm-hmm.
Bruce Lu: At the same time, your peers, the testing business, is doing pretty good with, you know, very impressive share price. What kind of testing strategy can we expect? Do we expect some change for the testing? Do we turn more aggressive into the testing? Do we get involved in the wafer-level testing moving forward? What kind of strategy can we expect?
Bruce Lu: At the same time, your peers, the testing business, is doing pretty good with, you know, very impressive share price. What kind of testing strategy can we expect? Do we expect some change for the testing? Do we turn more aggressive into the testing? Do we get involved in the wafer-level testing moving forward? What kind of strategy can we expect?
Speaker 7: transcript
Speaker 7: At the same time, it appears that testing this is doing pretty good with very impressive share price.
At the same time your peers testing business is doing pretty good with.
Speaker 7: transcript
Speaker 7: So what kind of testing strategy can we expect? Do we expect some change for the testing? Do we turn more aggressive into the testing? Do we get involved in the waiver level testing moving forward? What kind of strategy can we expect?
Very impressive share price.
So what kind of testing strategy can we expect do we expect some change for the testing do we.
More aggressively into the testing do we get involved with the wafer level testing going forward, what kind of dose strategy what can.
Joseph Tung: Well, we still have the same view on testing that we believe still has good potential for us. It does have good potential for us. We want to remain aggressive in making testing a larger part of our overall. We're gonna come back and revisit the overall situation and see how we can move further toward our target and to bring this part of the business up. What are the right business that we should be pursuing? What kind of new technology that we should be investing in? That's an ongoing process.
Joseph Tung: Well, we still have the same view on testing that we believe still has good potential for us. It does have good potential for us. We want to remain aggressive in making testing a larger part of our overall. We're gonna come back and revisit the overall situation and see how we can move further toward our target and to bring this part of the business up. What are the right business that we should be pursuing? What kind of new technology that we should be investing in? That's an ongoing process.
Speaker 5: transcript
Speaker 10: Well, we still have the same view on testing that we believe still has, it does have good potential for us. And we want to maintain, remain aggressive in making tests.
Joseph Tung: So what kind of testing strategy can we expect? Do we expect some change for the testing? Do we turn more aggressive into a testing? Do we get involved with a level of testing when we forward? What kind of strategy we're going to, can we expect? Well, we still have the same view on testing that we believe still has, it does have good potential for us. And we want to maintain, remain aggressive in making tests. This is a larger part of overall. And we're going to come back and revisit the overall situation and see how we can move further to our target and to bring this part of the business up.
Can we expect.
Well, we still have the same view on testing that we believe still has it does have good potential for us.
We we we we want to make a remain aggressive.
Speaker 5: transcript
Speaker 10: business a larger part of our overall. And we're gonna come back and revisit the overall situation and see how we can move further toward our targets and to bring this part of the business up. What are the right business that we should be pursuing? What kind of new technology that we should be investing in? That's an ongoing.
Making the tests.
This is a larger part of our overall.
Well, we're going to come back and revisit the overall situation.
See how we can.
We'll further tour our targets and to.
To bring this part of the business up.
What are the ROE basis that we should be pursuing what kind of.
A new technology that we should be investing in that.
Speaker 5: transcript
Speaker 8: process. I think the reason you're kind of a slower growth pace in tests is because of the overall products.
Joseph Tung: I think the reason, you know, kind of a slower growth pace in tests is because of the overall products shifting in this market at this point. I think that that's one of the main reasons why we're seeing some of the differences in the test business growth pattern between us and our competitor. We're gonna look into this and we're gonna put our focus back on tests, and we'll continue to drive that business.
Joseph Tung: I think the reason, you know, kind of a slower growth pace in tests is because of the overall products shifting in this market at this point. I think that that's one of the main reasons why we're seeing some of the differences in the test business growth pattern between us and our competitor. We're gonna look into this and we're gonna put our focus back on tests, and we'll continue to drive that business.
That's ongoing.
Process.
I think.
Joseph Tung: What are the ribases that we should be pursuing? What kind of new technology that we should be investing in? That's an ongoing process. I think the reason, you know, kind of a slower growth pace in tests is because of the overall, product shifting in this market at this point. So I think that that's one of the main reasons why we're seeing some of the differences in the in the test business growth pattern between us and our competitor. But we're going to we're going to look into this and we're going to put our focus back on the test. We'll continue to drive that business.
The.
Reason.
You kind of a slower.
Both spacing tests is because of the overall.
Products.
Speaker 5: transcript
Speaker 10: this market at this point. So I think that, that's...
Shifting in this.
This market at this point so.
Speaker 5: transcript
Speaker 8: one of the main reasons why we're seeing some of the differences in the test business growth pattern between us and our competitor. But we're going to look into this, and we're going to put our focus back on tests. We'll continue to drive that business.
I think that.
Yes.
While the main reasons why.
We've seen some of the differences in.
In the test business.
Gross pattern between us and our competitor.
We're going to we're going to look into this and we're going to put a focus.
Back on test and will continue.
Operator: Next question is from Mr. Zhihong of China Renaissance.
Operator: Next question is from Mr. Zhihong of China Renaissance.
To drive that business.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Xi Hong of China Renaissance.
Next question is from Mr. <unk> of China Renaissance.
Zhihong: Oh, yeah. Thanks for taking the question. Yeah. Regarding the interposer business, do you have any plan to get into the fabrication part of the business?
Szeho Ng: Oh, yeah. Thanks for taking the question. Yeah. Regarding the interposer business, do you have any plan to get into the fabrication part of the business?
Speaker 13: transcript
Speaker 14: Oh, yeah, thanks for the interaction. Yeah, regarding the interposive business, do you have any plan to get into the fabrication product in the business?
Oh, yeah. Thanks for taking my question.
Zihong: Next question is from Mr. Sihong of China and Renaissance. Oh, yeah, thanks for to get a question. Yeah, regarding the Interpose of Business, do you have any plan to get into the fabrication product in the business? I'm sorry, I didn't get you question. What do you have any plan to build an Interpose of Internality? Build Interpose of Internality. Right. I wish we could.
Regarding to the inter posted business do you have any plan to get into the fabrication.
Joseph Tung: I'm sorry, I didn't get your question.
Joseph Tung: I'm sorry, I didn't get your question.
Part of the business.
Zhihong: Do you have any plan to build an interposer internally?
Szeho Ng: Do you have any plan to build an interposer internally?
Speaker 13: transcript
Speaker 14: I don't have any plan to build an interposer.
I'm, sorry, I didn't get your question.
Do you have any plan to ask do you plan to close the economy.
Joseph Tung: Build interposer internally?
Joseph Tung: Build interposer internally?
Speaker 5: transcript
Speaker 8: Build in the poster internally. I wish we could.
Zhihong: Right.
Szeho Ng: Right.
Joseph Tung: I wish we could, but no, I don't think we have any plans of doing that.
Joseph Tung: I wish we could, but no, I don't think we have any plans of doing that.
Bill is a closer internally right.
Speaker 13: transcript
Speaker 14: No, I don't think we have any plans of doing that. Because he doesn't fit our DNA right, I think for Indeposra. Does that do what?
I wish we could but.
Zhihong: I see. Because it doesn't fit our D&A, right? I think for interposer.
Szeho Ng: I see. Because it doesn't fit our D&A, right? I think for interposer.
No I don't think we have any plans of doing that.
Because it doesn't fit our DNA right I think it goes right.
Joseph Tung: Doesn't fit what?
Joseph Tung: Doesn't fit what?
Zhihong: It doesn't fit our D&A. I mean, the business or the know-how.
Szeho Ng: It doesn't fit our D&A. I mean, the business or the know-how.
This would be what.
Ken Chan: No, I don't think we have any plans of doing that. Because he doesn't fit our DNA, right? I think for Interpose. Does that be what? I did this in fit our DNA. I mean, the business or the know how. I'm not sure this is really what our strength is and this is a wafer process and worth and we have so I don't see the real good fit in it. Yeah, that makes sense. Yeah.
Alright, it affected our rdna, having their data.
Charlie Chan: Okay, thank you very much.
The business.
Joseph Tung: I'm not sure this is really what our strength is. This is a wafer process and we're an assembly house, so I don't see the real good fit in it.
Arthur Knowhow.
Joseph Tung: I'm not sure this is really what our strength is. This is a wafer process and we're an assembly house, so I don't see the real good fit in it.
Speaker 5: transcript
Speaker 5: our strength is and this is a way for a process and for assembly house so I don't see the real good fit.
I'm not sure this is really what.
Our strength is and.
This is a wafer process.
Or assembly house so.
I don't see it.
Zhihong: Okay. Yeah, that makes sense. Yeah. Okay. Thank you very much. This is it.
Szeho Ng: Okay. Yeah, that makes sense. Yeah. Okay. Thank you very much. This is it.
A real good fit in it.
Okay perfect.
Yeah, Okay. Thank you very much.
Operator: Next question is from Mr. Charlie Chan of Morgan Stanley.
Operator: Next question is from Mr. Charlie Chan of Morgan Stanley.
Speaker 3: transcript
Speaker 3: Next question is from Mr. Charlie Chen of Morgan Stanley .
Next question is from Mr. Charlie Chan of Morgan Stanley.
Joseph Tung: Hi, Charlie.
Joseph Tung: Hi, Charlie.
Charlie Chan: Hey, Joseph. Thanks for taking my question again. I'm not trying to be picky, but I'm very interested about your previous comments. You said that usually in the previous quarters, right? Rush order only happened in the quarter end. Now we are at the beginning of the quarter, you still see rush orders coming in. Am I getting anything wrong or is that a sign of the kind of demand is actually better than expected? How do we re-read this? Thanks.
Charlie Chan: Hey, Joseph. Thanks for taking my question again. I'm not trying to be picky, but I'm very interested about your previous comments. You said that usually in the previous quarters, right? Rush order only happened in the quarter end. Now we are at the beginning of the quarter, you still see rush orders coming in. Am I getting anything wrong or is that a sign of the kind of demand is actually better than expected? How do we re-read this? Thanks.
Speaker 8: transcript
Speaker 15: Hey, just a sense of taking my question again. So I'm not trying to be picky, but I'm very interested about your previous comment.
Hi, Charlie.
Hey.
Thanks for taking my question again so.
Trying to be picky, but I'm very interested about your previous comments.
Charlie Chan: Next question is from Mr. Charlie Chen of Morgan Stanley. Hi, Charlie. Hey, there's a sensor taking my question again. So I'm not trying to be picky, but I'm very interested about your previous comments. You said usually in a in a in a previous quarter, right? Russia would have only happened in a quarter and but now we're at the beginning of the quarter, you still see a Russia orders coming in. Am I getting anything wrong or is that a sign of the kind of demand is actually better than expected?
Speaker 8: transcript
Speaker 15: You said usually in the previous quarters, right, rush order only happened in quarter end. But now we are at the beginning of the quarter, you still see rush orders coming.
You said that usually.
In the previous quarters, right Rush order only happen in a quarter again, but now we are at the beginning of the quarter you still see a rush orders coming in.
Speaker 5: transcript
Speaker 10: Am I getting anything wrong or is that a sign of the kind of demand is actually better than expected? How do we read this? Thanks. No, I'm saying the pattern seems to be remaining.
And I get anything wrong or is that a sign of the kind of demand is actually.
Pedro the expanded how do we how do we.
Joseph Tung: No. I'm saying the pattern seems to be remaining. That's to say, by end of the quarter, we could see some other rush orders coming in.
Joseph Tung: No. I'm saying the pattern seems to be remaining. That's to say, by end of the quarter, we could see some other rush orders coming in.
Great. Thanks.
Thanks.
No I'm, saying the pattern seems to be.
Speaker 5: transcript
Speaker 10: That's to say by end of the quarter, we could see some other.
Mainly.
That's to say bye.
Charlie Chan: How do we how do we read this? Thanks. No, I'm saying the pattern seems to be remaining. That's to say by end of the quarter, we could see some other Russia orders coming in. I'm simply trying to say that the quarter and Russia orders seems to be the pattern. I'll go deal now. Yes. Okay, okay. Thanks.
By end of the quarter.
Charlie Chan: Okay.
We could see.
Charlie Chan: Okay.
Joseph Tung: I'm simply trying to say that, you know, the quarter-end rush orders seems to be the pattern of up until now. Yes.
Speaker 5: transcript
Speaker 8: I'm simply trying to say that, you know, the quarter end rush order seems to be the pattern.
Joseph Tung: I'm simply trying to say that, you know, the quarter-end rush orders seems to be the pattern of up until now. Yes.
Other rush orders coming in.
I'm also very excited to say that deal.
Quarter end rush orders seems to be the pattern.
Charlie Chan: Okay. Thanks. So another follow-up question or two if I may. One is the AI chip testing business, right? Like, no matter if you're those are ASIC.
Charlie Chan: Okay. Thanks. So another follow-up question or two if I may. One is the AI chip testing business, right? Like, no matter if you're those are ASIC.
Speaker 8: transcript
Speaker 15: Okay, okay, thanks. So another follow question or two, if I may. One is the
I'll go through them now yes.
Okay. Okay. Thanks.
A follow up question or two if I may.
Speaker 8: transcript
Speaker 15: the AI chip testing business, the metaGP or the ASIC, sessions in the interest of a
One is the <unk>.
The AI chip.
Joseph Tung: Mm-hmm.
Charlie Chan: It seems like your competitor in the testing business are gaining a lot of market share. I just wanted to know any fundamental reason behind that. Second part of question is more about long term, because as you can see data for mature node foundry, that's a capacity expansion is happening in China. So just wondering if China in the long term will gain market share, whether that means the ASE in the backend foundry service will lose market share because you probably, I'm not sure, right? You probably sold your China operation a couple years ago.
Charlie Chan: It seems like your competitor in the testing business are gaining a lot of market share. I just wanted to know any fundamental reason behind that. Second part of question is more about long term, because as you can see data for mature node foundry, that's a capacity expansion is happening in China. So just wondering if China in the long term will gain market share, whether that means the ASE in the backend foundry service will lose market share because you probably, I'm not sure, right? You probably sold your China operation a couple years ago.
Chip placed in base and say the Nomura GPU or AC.
Ken Chan: So another follow question or two, if I may, one is the AI chip testing business, right? The meta GPU or those are ASIC, right? Since like your carburetor in the in testing business are gaining a lot of market share. I just want to want to know any fundamental reason behind that. And second part of question is more about long term because I just can see that for maternal foundry, that's a capacity spendings happening in China.
Speaker 8: transcript
Speaker 15: Business are gaining a lot of market share. I just want to know any fundamental reason behind that.
Inside your.
Tibet or in a in pacing business gaining market share.
Speaker 8: transcript
Speaker 15: And second part of question is more about long term because as you can see there's a mature no boundary that's a capacity to manage that's happening in China so I'm just wondering you
They know any fundamental reason behind that.
And the second part of question is more about long term because.
Right.
You can see data for mature foundry.
Our capacity expansion is happening in China.
Speaker 8: transcript
Speaker 15: China in the long term will again market share whether that means that ASC in the big end foundry series will lose market share because you you probably I'm not sure right but you you probably sold your China operation couple years ago
So just wondering if.
In the long term, we will gain market share whether that means the ASC and the big end foundry series.
No.
Sluggish it because he probably.
Ken Chan: So I'm just wondering if China in the long term will gain market share whether that means that ASIC in the big end foundry series will lose market share because you probably, I'm not sure, right? But you probably solved your China operation a couple of years ago. Well, I think our China operation remained in Suzhou, which is under spill. It's a bit different from the four factories that we saw two years ago.
Joseph Tung: Well, I think our China operation remained in Suzhou, which is under SPIL. It's quite different from the four factories that we sold two years ago. I think the Suzhou factory today is a more advanced facility than the four that we sold. It does address the growing demand in China, particularly when the whole industry is kind of polarizing at this point, where China demand remains into China, and the outside of China goes to outside.
I'm not sure I bet, you probably saw it with your China operation couple of years ago.
Joseph Tung: Well, I think our China operation remained in Suzhou, which is under SPIL. It's quite different from the four factories that we sold two years ago. I think the Suzhou factory today is a more advanced facility than the four that we sold. It does address the growing demand in China, particularly when the whole industry is kind of polarizing at this point, where China demand remains into China, and the outside of China goes to outside.
Speaker 5: transcript
Speaker 8: Our channel operation remained in Suzhou, which is under spell.
Well I think the.
Our China operation remains.
Speaker 5: transcript
Speaker 8: It's quite different from the four factories that we sold two years ago. I think the Suzo factory today is more of a vez.
Sure Joe.
Which is under spill.
It's a bit different from its quite different from the.
In fact, we thought we saw two years ago are they the pseudo factory today is a more adverse.
Speaker 5: transcript
Speaker 10: facilitate and the before that we saw. And it does address the, the,
Facility there.
Is the Florida, we sold.
It does suggest the.
Ken Chan: I think the Suzhou factory today is the best facility than the four that we saw. And it does address the going demand in China, particularly when things are, the whole industry is kind of polarizing at this point where China demand remains into China and the outside of China goes to outside. So I think the Suzhou being more advanced, more efficient, more cost-effective kind of a facility, I think it does. It's doing quite well actually in China, particularly in terms of serving the Chinese customers with higher end technology requirements.
Speaker 5: transcript
Speaker 5: the going demand in China, particularly when the when things are the whole industry is kind of polarizing at this point, where China demand remains into China. And the outside of China goes to outside
D a.
The growing demand in China, particularly when the when things are.
The whole industry is kind of a polarizing at this point.
Where China demand, we may seem to China.
Charlie Chan: Mm-hmm.
Joseph Tung: I think the Suzhou being more advanced, more efficient, more cost-effective kind of a facility, I think it does, it's doing quite well actually in China, particularly in terms of serving the Chinese customers with a higher-end technology requirement. We are, we're confident that in China, we could be losing some revenue in terms of dollar, but in terms of business, we're actually gaining better quality business in China.
Speaker 5: transcript
Speaker 10: So I think the Suzhou being more advanced, more efficient, more cost effective.
Joseph Tung: I think the Suzhou being more advanced, more efficient, more cost-effective kind of a facility, I think it does, it's doing quite well actually in China, particularly in terms of serving the Chinese customers with a higher-end technology requirement. We are, we're confident that in China, we could be losing some revenue in terms of dollar, but in terms of business, we're actually gaining better quality business in China.
And also China goes to outside.
So I think they are.
<unk> been more there's more efficient more cost effective.
Speaker 5: transcript
Speaker 10: kind of a facility. I think it does, it's doing quite well actually in China, particularly in terms of serving the Chinese customers with a higher end technology.
Kind of a facility I think it does.
It is doing quite well actually in China, particularly in terms of serving the.
China cost Chinese customers with a higher end.
Speaker 5: transcript
Speaker 10: So we are confident that we can in China, we could be losing some revenue in terms of dollar, but in terms of business, we're actually getting gaining better quality business in China.
Technology.
Requirement.
So we are.
We're confident that the U a E.
In China.
We could be losing some revenue in terms of dollar or in total.
Ken Chan: So we are, we're confident that in China, we could be losing some revenue in terms of dollar, but in terms of business, we're actually gaining better quality business in China. The testing business, yeah, the first part of the testing, yeah, for the GPU and ASE Tech. Other than congratulating our competitors, doing a very good job in securing that process, we have to catch up to do and we will do so. Okay. Good to know. Thank you. If you have any questions, please raise your hand. There is no more questions. Okay. Thank you all for coming.
This is where we're actually getting gaming.
Charlie Chan: Mm-hmm.
Joseph Tung: Well, I think-
Joseph Tung: Well, I think-
Charlie Chan: The testing business. Yeah.
Charlie Chan: The testing business. Yeah.
Speaker 8: transcript
Speaker 15: the testing business. Yeah. That's the first part of the. Testing for the GPU and ASIC. Yes.
Better quality business in China.
Joseph Tung: That's the first part of the.
Joseph Tung: That's the first part of the.
Charlie Chan: Yeah, testing.
Charlie Chan: Yeah, testing.
Joseph Tung: Oh, okay.
Joseph Tung: Oh, okay.
Charlie Chan: Testing, yeah, for the GPU and ASIC. Yes.
Charlie Chan: Testing, yeah, for the GPU and ASIC. Yes.
Hum.
Okay.
Yes.
Got it.
Joseph Tung: Other than congratulating our competitors doing a very good job in securing that part of the business, well, we have some catch up to do, and we will do so.
Joseph Tung: Other than congratulating our competitors doing a very good job in securing that part of the business, well, we have some catch up to do, and we will do so.
Speaker 10: transcript
Speaker 11: other than congratulating our friends, they're doing a very good job in securing that part of the business. We have to catch up to do and we will do so. Okay, okay. Good to know. Thank you.
Okay.
Yes for sure.
GPU in it yes.
Other than congratulating, okay, where they're doing a very good job in a secured basis.
Charlie Chan: Okay. Good to know. Thank you.
Charlie Chan: Okay. Good to know. Thank you.
We have some catch up to do and what we will do so.
Okay. Okay.
Operator: If you have any question, please raise your hand. There is no more questions.
Operator: If you have any question, please raise your hand. There is no more questions.
Okay, great. Thank you.
Okay.
If you have any question please raise your hand.
Joseph Tung: Okay. Thank you all for coming. Sorry for my low voice because I caught a cold. You know, thank you again for joining us, and we'll see you next quarter.
Joseph Tung: Okay. Thank you all for coming. Sorry for my low voice because I caught a cold. You know, thank you again for joining us, and we'll see you next quarter.
Speaker 14: transcript
Speaker 10: Okay, thank you all for coming. Sorry for my...
There is no more question.
Okay. Thank you all for coming sorry for my.
Speaker 14: transcript
Speaker 8: low voice because I caught a cold.
Speaker 14: transcript
Speaker 8: Thank you again for joining us and we'll see you next quarter.
Low voice, because I caught a cold.
But you know.
Thank you again for joining us and we will see you next quarter.
Ken Chan: Sorry for my low voice because I caught a cold.
Ken Chan: But, you know, thank you again for joining us and we'll see you next quarter.