Q4 2024 ASE Technology Holding Co Ltd Earnings Call
[music].
Yeah.
Yeah.
Hello, I attend Shai the head of Investor Relations for ASE technology, holding welcome to our fourth quarter and full year 24 earnings release.
Thank you for attending our earnings release today.
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. These forward looking statements are subject to a high degree of risk and our actual results to differ materially for.
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, Ifr Ash results presented using Taiwan I F. R. S may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese gap.
Speaker Change: I'm joined today by Dr. Chan with our C O O and Joseph Tung our CFO for today's presentation Doctor will will be giving the company's key message I will be going over financial results and Joseph will then go through our company side of it.
Speaker Change: Both T&D Joseph will then be available to take your questions. During the Q&A session that follows during the Q&A session I will be moderating receiving an added needed clarifying and condensing each interaction down to a single question.
Speaker Change: With that let me hand, the presentation over to Dr. Tien Wouk Ken.
Speaker Change: First of all thank you related heavy Chinese new year to all of you.
Speaker Change: Let me give you the a recap for 2024.
Speaker Change: Our consolidated revenues grew 2% year on year in 2024.
Speaker Change: With ATM revenues up 3% year on year.
Speaker Change: We have seen a very strong demand for.
For leading edge packaging and testing.
Speaker Change: While the mainstream segment was a mixed bag.
Speaker Change: We saw a soft recovery.
Speaker Change: In some segments.
Speaker Change: And some other segments due to inventory correction as wise and market demand.
Speaker Change: We're lagging behind the general market.
Speaker Change: Leading edge advanced packaging and testing revenues war over USD 600 million.
Speaker Change: Accounting for around 6% our eighth.
Speaker Change: <unk> ATM revenues.
Speaker Change: Up from USD $250 million.
Speaker Change: In 22 three.
Speaker Change: Our test business grew 9% year on year.
Speaker Change: In 2024.
Speaker Change: And in particular grew 18% year on year in Q4 of 'twenty four.
We do expect the testing revenue.
Speaker Change: We will have accelerated momentum into 2025.
Speaker Change: <unk> increased turnkey.
Speaker Change: As well as our expanding leading edge test.
Speaker Change: Our machinery Capex was U S 1.9 billion.
Speaker Change: Op by a billion versus 2023.
Speaker Change: Mainly driven by advanced packaging and testing.
Speaker Change: Next let me give you a 2025 outlook.
Our ATM business.
Speaker Change: To outgrow the logic semiconductor market driven.
Driven by strong momentum of our leading edge advanced packaging and testing businesses.
Speaker Change: Leading edge advanced packaging and test revenues.
Speaker Change: Two increased by.
Speaker Change: By U S 1 billion.
Speaker Change: Versus 2024.
That will account for about 10% of our growth.
In 2025.
Speaker Change: While the general segment.
Will be better than 2024.
Speaker Change: We expect them to grow mid to high single digit year on year.
Speaker Change: On the investment in R&D human capital advance packaging and testing capacity and also factory automation in all of the Smart factory buildings.
We will continue to accelerate in preparation for the AI led Super cycle, which we believe have started in 'twenty 'twenty four and we'll see the momentum in 2025 20 to PSX N B L.
Lastly, let me give you a market landscape.
S E positioning.
Speaker Change: We believe that Tau semiconductor revenues are likely to reach one trillion in the next decade.
Driven by AI robotics.
Electrification of all systems.
Speaker Change: Also the energy and the Iot related products.
A S he's well positioned to benefit.
So on the strong demand of leading edge advanced technology as well as the growing volume of peripheral chips on.
On accelerating edge AI adoption.
Speaker Change: A comprehensive technology toolbox.
Speaker Change: Three D 2.5 D fan out.
Speaker Change: Large panel.
Speaker Change: Sid.
Speaker Change: Co packed optics.
Speaker Change: Our automation.
Scale advantages.
Speaker Change: As well as the geographic diversification of AUC make.
Make a S a preferred partner.
For customers.
A S a strong financial performance.
Speaker Change: And flexibility and agility.
Handling.
Speaker Change: Business model evolution.
Further widen the moat against competitors.
Let me pass the floor back to Ken.
Doctor: Doctor will.
Speaker Change: I will now go over the financial results the fourth quarter, ATM and EMS businesses came in slightly better than originally anticipated R. A T M businesses fourth quarter outperformance was driven primarily by some communications related business strength.
Strength was driven by our test business with the growing 11% quarterly for the full year, our ATM business grew by 3%, our leading edge advanced packaging business accounted for most of the scope.
And so testing finished Sha we believe our test growth will be even stronger during 2025, our overall equipment utilization was in the mid to high sixties.
For EMS partners, despite a muted fourth quarter outlook due to earlier seasonality our S. I P product flow came in slightly ahead of our expectations during the fourth quarter for the full year. Our EMS business was flash. We believe that this is somewhat in line with the electronics industry.
Speaker Change: As a whole.
Should be noted that in earlier seasonality somewhat distort annual comparison for our EMS business and to a lesser extent also at holding company level.
Speaker Change: Please turn to page six where you will find our fourth quarter consolidated results.
Speaker Change: For the fourth quarter, we recorded fully diluted EPS of $2 Summertime and basic EPS of $2 15, such consolidated net revenues increased 1% sequentially and year over year.
Speaker Change: We had a gross profit of $26 6 billion with gross margin of 16.4%. Our gross margin declined by 0.1 percentage point sequentially and improved by your 0.4 percentage points year over year the.
The sequential decline in margin is principally due to lower profitability for Marty M. S.
Speaker Change: Our R&D expenses increased by zero point $4 billion sequentially and by $1.5 billion annually to 15.4 billion. The sequential increase in our operating expenses are primarily due to leading edge advanced packaging and testing services ramp up and.
Speaker Change: Timing of equity compensation related expenses from our ATM business the year over year increase in operating expenses is primarily attributable to continued R&D staff up and other labor related costs.
Speaker Change: Our operating expense percentage increase sequentially by 0.2 percentage points annually by 0.8 percentage points year over year to 9.5%.
Speaker Change: Our operating expense probably requires a bit of explanation here.
Speaker Change: Tons of preparation and groundwork for our leading edge advanced packaging related businesses started in late 2023 and ramped dirt during 2024.
We have been vessel hiring and training new employees throughout 2024, we also needed to ramp our new product introduction efforts, including perfecting tooling and process flows that eventually need to be in place finally semiconductor manufacturing has become very visible Ralph.
The world the skills necessary to prepare manage and run manufacturing also are in high demand.
Retention of our employees has become increasingly important in all of this has been done in an inflationary environment.
As such these expenditures have created a round and our operating expenses that started in 2024.
Speaker Change: We used our operating expenses continuing to rise on an absolute basis.
Speaker Change: But will level off in the middle part of 2025 further as revenues related to these efforts grow our operating expense percentage should startup decline.
Speaker Change: The back half of 2025.
Speaker Change: Operating profit was 11.2 billion down 0.3 billion sequentially and neuro point 6 billion year over year operating margin declines are a 0.3 percentage points sequentially and declined 0.5 percentage points year over year. We believe this margin decline list price.
Speaker Change: Merrily, driven by higher compensation and ramp up expenses related to leading edge advanced packaging and geographical scale up across our H M M.
Speaker Change: E M S businesses.
Speaker Change: During the quarter, we had a net non operating gain of zero point $2 billion, our nonoperating gain for the quarter primarily consists of net foreign exchange hedge activities profits from associates and other nonoperating income offset in part by net interest expense.
Speaker Change: Of $1.3 billion.
Speaker Change: Tax expense for the quarter was 1.9 billion.
Speaker Change: Our effective tax rate for the quarter was 16%.
Speaker Change: The effective tax rate during the quarter was lower than expected primarily as a result of higher tax credit.
Speaker Change: Credit recognition.
Speaker Change: Net income for the quarter was 9.3 billion, representing a decrease of 0.4 billion sequentially and 0.1 billion year over year.
Speaker Change: NT dollar appreciated Europe, 0.5% against the U S dollar sequentially, while depreciating, 0.75% annually.
Speaker Change: From a sequential perspective, we estimate the NT dollar appreciation had a 0.1 percentage point negative impact to the company's gross and operating margins all from an annual perspective, we estimate the NT dollar depreciation had a 0.2 percentage point positive impact to companies.
Speaker Change: Gross operating margin.
Speaker Change: 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 27.3 billion with a 16.8% gross margin.
Speaker Change: Operating profit would be 12.1 billion with an operating margin of 7.5% net profit would be 10.2 billion with a net margin of six 3% basic EPS, excluding PPA expenses would be $2 36.
Speaker Change: Please refer to page seven here you will find the 2024 consolidated full year results versus 2023 full year results fully diluted EPS for the year was $7 23 times, while basic EPS was $7 52 subs for 2020 for consolidated net revenue.
Speaker Change: Improved 2% as compared with 2023, ATM improved by 3%, while EMS business improved 2% annually.
Speaker Change: Gross profit for the year was 96.9 billion, improving 5.2 billion year over year or by 6%.
Speaker Change: In 2020 for our consolidated gross margin improved <unk> five percentage points to 16.3% principally as a result of foreign currency fluctuation and improved operating leverage from our ATM business offset in part by higher utility costs.
Speaker Change: Operating expenses increased $6 4 billion for the year and came in at 57.8 billion higher operating expenses as discussed earlier are the result of the ramp up of leading edge advanced packaging services and higher labor related costs, our overall operating expense.
Speaker Change: Percentage also increased to 9.7% as a result of these increases.
Speaker Change: Operating profit for the year was 39.2 billion for the year declining $1.1 billion.
Speaker Change: Operating margin for the year was 6.6% representing a decline of 0.3 presented points from 2023.
Speaker Change: We recorded a net nonoperating gain of 2.5 billion for the year, including a net interest expense of 4.9 billion versus 4.7 billion in 2023, although interest rates may appear to be moderating. We believe that our interest expenses will most likely increase or stay near current levels header.
Speaker Change: Into next year, given additional borrowing necessary to fund our expansion.
Speaker Change: Most of nonoperating gains were associated with our foreign currency hedging activities.
Total tax expense was $7 8 billion the effective tax rate for the year was 18.6% current year income tax expense came in lower as a result of recognized deferred tax assets from increased government incentive programs on R&D.
Speaker Change: For the coming year, we believe our ongoing effective tax rate will be lowered by increased government incentive programs and offset in part by our recent global minimum tax applications.
Speaker Change: We expect that the effective tax rate for the coming year will be slightly below 20%.
Speaker Change: Net income for the year increased by 2% to 30, who point 5 billion.
Speaker Change: On a full year basis, we estimate that the depreciating NT dollar had a positive 0.8 percentage point impact gross and operating margin.
Speaker Change: Removing the effect of EPA depreciation our gross margin would be 16.9% our operating margin would be 7.3% our basic EPS would be $8 50 for such an.
Speaker Change: On page eight is a graphical presentation of our consolidated quarterly financial performance on a year over year basis gross margins have been gradually improving.
Speaker Change: The operating margin front as was stated earlier operating expenses such.
Speaker Change: This increase in profit.
Speaker Change: Operations of leading edge advanced packaging.
Speaker Change: Labor staff up offshore its site expansion costs from our EMS businesses and equity combination.
Speaker Change: On page nine is our ATM P&L. The ATM revenue reported here contains revenues eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses.
Speaker Change: For the fourth quarter of 2024 revenues for our ATM business were $88 4 billion.
Speaker Change: Point 6 billion, the previous quarter and up $6 4 billion from the same period last year. This represents a 3% increase sequentially and eight 8% increase annually.
Speaker Change: Gross profit for our ATM business was $20 6 billion up 0.8 billion sequentially and up 1.4 billion year over year.
Speaker Change: Gross profit margin for ATM business was 23, 3% op 0.2 percentage points sequentially and down 0.1 percentage points year over year.
Speaker Change: The sequential margin improvement was primarily related to higher test and leading edge advanced packaging business offset in part by the impact of product mix shift. The annual margin decline is primarily the result of higher utility costs product mix us offset embarked by favorable foreign exchange.
Speaker Change: During the fourth quarter operating expenses were 11.2 billion op 0.6 billion sequentially.
Speaker Change: 1.2 billion year over year the sequential.
Speaker Change: Increase in operating expenses was primarily driven.
Speaker Change: By scale out of compensation costs, including headcount and timing of certain equity compensation.
Speaker Change: The annual operating expense increase was driven primarily by the continued scale up of R&D labor and timing of equity compensation.
Speaker Change: Our operating expense percentage for the quarter was 12, 6% increase same 0.3 percentage point sequentially and up <unk> four percentage points annually, the sequential and annual increases were primarily due to labor ramp ups preparing for higher leading edge advanced packaging revenues during the fourth quarter.
Speaker Change: Operating profit was 9.4 billion, representing an increase of 0.2 billion Boes.
Speaker Change: Both quarterly and annual operating margin was 10.7% flat sequentially and down 0.5 percentage points year over year.
Speaker Change: For foreign exchange, we estimate that N T to U S. Dollar exchange rate had a negative 0.2 percentage point impact on our a T M sequential margins in a positive zero, a four percentage point impact on a year over year basis.
Without the impact of PPA related depreciation and amortization ATM gross profit margin would be 24% and operating profit margin would be 11.6%.
Speaker Change: On page 10, we have our ATM full year P&L 'twenty 'twenty four revenues for our ATM business improved by 3% with our packaging and test businesses up to and 9% respectively.
Speaker Change: Gross profit for the year improved 6% to 73.2 billion gross margin was 22, 5% up 0.7 percentage points margin improvement was the result of higher factory efficiency and a favorable foreign exchange environment offset in part by higher <unk>.
Utility costs and factory supply consumption.
Speaker Change: Due to shifting product mix.
Speaker Change: Operating expense percentage increased 0.9 percentage points to 12.6%.
Speaker Change: Operating profit Nudged up 0.2 billion to 32 billion, while operating margin declined 0.3 percentage points to nine 8%.
Speaker Change: For foreign exchange on a full year basis, we estimate that the depreciating NT dollar had a 1.4 percentage point impact on margins went up the impact of PPA expenses gross profit margin would be 23, 5% and operating margin would be 11.1.
Speaker Change: On page 11, you'll find a graphical representation of our ATM P&L.
Speaker Change: On page 12 is our ATM revenue by Juicy market segments, you can see here the relative strength of our communications segment during the fourth quarter as previously mentioned, our leading edge advanced services are currently spread across our computing and communications segments.
Speaker Change: On page 13, you'll find our ATM revenue by service type.
Speaker Change: The most prominent thing here is that our wire bond services saw gradual declines over the last eight quarters traditional.
Speaker Change: Traditional wire bond products are an everyday electronics like Wifi televisions and household appliances frequently they're not the main chip, but mainly serves.
Speaker Change: Supporting roles as peripherals like a screen or power controller.
Speaker Change: This chart shows is somewhat simple concept more basic products like many of those upgrades during COVID-19 have a longer replacement cycle.
Speaker Change: We would expect to see a pickup in wire bond when a general recovery starts to happen a corollary you can see from this chart is that there is strength in our advanced packaging and test businesses. We believe our efforts involved with growing our test business are continuing to pay off our tests are.
Speaker Change: Services have also managed to outgrow that corporate average going from 16% to 18% of.
Speaker Change: Our test business grew by 11% quarterly and 18% annually.
Doctor: As Doctor will mentioned earlier with your test business accelerating during 2025.
Speaker Change: On page 14, you can do the first quarter results of our E&S business. During the quarter EMS revenues were 74.9 billion declining 0.5 billion or 1% sequentially and $4 3 billion or 5% year over year.
Speaker Change: The sequential and annual revenue declines are primarily the result of accelerated seasonality for the year.
Speaker Change: Sequentially, our EMS businesses gross margin declined <unk> seven percentage points to eight 3%. This change was principally result of the product mix and lowering operating leverage.
Speaker Change: Operating expenses within our EMS business declined 0.1 billion sequentially and while embracing the 0.3 billion annually.
Speaker Change: <unk> expense decrease was primarily attributable to lower compensation expenses, while the annual increases related to geographical expansion and acquisitions.
Speaker Change: Operating margin for the fourth quarter, 2.7% declining 0.6 percentage points sequentially.
Speaker Change: And declining 0.8 percentage points year over year, the sequential and annual declines were primarily due to product seasonality. Our EMS fourth quarter operating profit was $2 billion down 0.5 billion sequentially, while down 0.8 billion annually.
Speaker Change: For the full year, our EMS business experienced a somewhat meter electronics demand environment for the full year <unk> revenues grew by 2%.
Speaker Change: Gross margin crude by 0.3 percentage points, primarily due to product mix operating margin for the year was 2.9%.
Speaker Change: Decline in our EMS operating margin, primarily due to geographical expansion and acquisition with differing cost structures.
Speaker Change: Operating profit declined by $1 billion.
Speaker Change: On page 15, you'll find graphical representation of our EMS revenue by application.
Speaker Change: There was a slight shift from consumer devices to communications devices. The shift here are generally due to underlying proxy seasonality.
Speaker Change: On page 16, you will find key line items from our balance sheet at the end of the year, we had cash cash equivalents and current financial assets of $85.9 billion.
Speaker Change: Our total interest bearing debt increased by zero point $7 billion to 213.9 billion.
Speaker Change: Total unused credit lines amounted to 375.7 billion, our EBITDA for the quarter was 28.8 billion.
Our net debt to equity this quarter was 0.37.
Speaker Change: On page 17, you will find our equipment capital expenditures relative to our EBITDA.
Speaker Change: Machinery and equipment capital expenditures for the fourth quarter in U S dollars totaled $648 million of which $321 million were used in packaging operations $209 million in testing operations $23 million in EMS operations and $5 million and interconnect.
Speaker Change: <unk> operations and others.
Speaker Change: Machinery and equipment capital expenditures for 2024 in U S dollars total.
Speaker Change: $1.876 billion.
Speaker Change: Of which 957 million were used in packaging operations $815 million in testing operations 89 million EMS operations and $15 million in interconnect material operations and others.
Speaker Change: In addition to spending on machinery and equipment. We also spent $655 million on land and building or for simplicity sake facilities during the fourth quarter.
Speaker Change: We're all spending 1.1 billion for the full year.
Speaker Change: During the year 'twenty 'twenty four we invested significantly in our facilities as part of our generational advance and packaging technology.
Speaker Change: Given that our facilities spending is sporadic in nature.
Speaker Change: Historically discussed our capital expenditures, mainly as it pertains to our machinery and equipment funding for the sake of comparability.
Speaker Change: Our facilities were also previously more generic and a specialized as our machinery and equipment, but factory automation advancing technologies and tighter building first applications are now driving new facility investments the scale of investment steps op and now also recently.
Speaker Change: Rapid and significant technology advancements and competitive advantages for our businesses.
Speaker Change: At this point I would like to hand, the presentation over to Joseph for further discussion on our overall company outlook Joseph.
Joseph Tung: Thank you again.
Joseph Tung: Let me give you first quarter 'twenty outlook.
Joseph Tung: Based on our current business outlook and exchange rate assumption.
Joseph Tung: <unk> overall performance for the first quarter of 2025 to be volatile.
Joseph Tung: For ATM in NT dollar terms.
Joseph Tung: Our ATM first quarter 2025 revenue.
Joseph Tung: Should decline mid single digits quarter over quarter.
Joseph Tung: And gross profit margin should decline slightly more than one percentage point quarter over quarter.
Joseph Tung: Well, yes.
Joseph Tung: In NT dollar terms.
Joseph Tung: EMS first quarter 2025 revenue should decline slightly year over year.
Joseph Tung: <unk> first quarter 'twenty funded by the operating margin should decline by 30 basis points year over year.
Joseph Tung: Now on top of our first quarter guidance.
Joseph Tung: I will also like to give you some more color.
Joseph Tung: Overall ATM business in 2025.
Joseph Tung: First on revenue.
Joseph Tung: As Tim mentioned RV.
Joseph Tung: Our leading edge packaging and testing business will continue to see very strong momentum and.
Joseph Tung: We expect to add another billion dollars of revenue in this area or 10% of our revenue idiot revenue growth.
Joseph Tung: In terms of general market.
Joseph Tung: But our revenue to grow in line with the industry, giving us above mid single digits.
Joseph Tung: ATM revenue growth.
Joseph Tung: And to support this business prospect.
Joseph Tung: We will need to further expand our capex in both capacity and matching securities.
Joseph Tung: For machinery and equipment, we expect our 2025 capex to be the annualized amount of fourth quarter 44 number.
Joseph Tung: And of which 60% will be used for leading edge.
Joseph Tung: To support the strong demand.
Joseph Tung: Also to support the aggressive expansion of both turnkey and pure testing businesses.
Joseph Tung: Over 30% of the total cabinet the months of the year will be allocated to that.
Joseph Tung: Also as mission by Ken.
Joseph Tung: Mafia III building that become an essential part of our overall, leading edge service offering.
Speaker Change: As such we will need to double our capex at facility is to around $2 billion in multiple new sites, both in Taiwan and overseas.
Joseph Tung: Yeah.
Joseph Tung: Secondly, I would like to talk about probability.
Joseph Tung: We ended 2024 with an ATM gross profit margin of around 22, 5%.
Joseph Tung: Which is a bit short of our structural gross margin target of 24.
Joseph Tung: Due to a softer than expected recovery of general market.
Joseph Tung: Which consequentially close sequentially, a sub 70% utilization rate.
Joseph Tung: On top of that our margin was also impacted by the inflationary or deflationary environment.
Joseph Tung: With elevated costs, including electricity prices and logistics cost index, etc.
Joseph Tung: We're also experiencing a higher ramp up cost of manpower and capacity as we're in the investment and expansion mode. At this point.
Joseph Tung: Yes.
Joseph Tung: Entering 2025.
Joseph Tung: Once we have progressively complete the program.
Joseph Tung: Our leading edge capacity in the second half of this year.
Joseph Tung: We expect ATM gross profit margin to reach the midpoint of our tortilla.
Speaker Change: <unk> with Cowen you quantify full year ATM gross margin recovery to structure, a T a target of 24% to 30%.
Speaker Change: And expect to see further improvement in profitability in 2036.
Speaker Change: And our business.
Speaker Change: Our operating expenses.
The higher operating expenses, mainly due to active R&D investment, including stepping up of R&D personnel.
Speaker Change: Tier one and overseas expansion and upfront cost from new facility.
Speaker Change: We do expect in 2025.
Speaker Change: <unk> operating expense ratio should decline by a notch, but remains to be higher than previous years as well.
Speaker Change: We continue the investment in leading edge technology human capital as well as.
Very upfront costs related to new facilities.
Speaker Change: We believe the operating leverage of these investments will become more meaningful starting in the latter part of 'twenty 'twenty four or into 2026.
Speaker Change: And therefore, opex percentage will start leveling off.
Speaker Change: As we enter the full ramp up of the newly invested capacity.
Speaker Change: And finally.
Speaker Change: I would like to state that there are many uncertainties ahead that could very well change the overall landscape of our business prospect.
Speaker Change: With that in mind, we were.
Speaker Change: Staples on effectively executing our plan for the year.
Speaker Change: And hopefully we will have a very busy two.
Speaker Change: 2014.
Speaker Change: Ahead of us.
Speaker Change: You very much.
Speaker Change: Okay.
Speaker Change: During the Q&A session that follows.
Speaker Change: We should we would appreciate it if questions can be kept concise and ask one at a time.
Speaker Change: Colors will be allowed to ask two questions per ton the questions already asked one at a time.
Speaker Change: I'll, let me read each question and repeating ask question to Joseph and channels.
Speaker Change: Yes.
Speaker Change: Again, we will be limiting the number of questions asked to two per tonne had asked one at a time.
Speaker Change: Okay.
Speaker Change: We had a question from me.
Speaker Change: <unk> of Citigroup.
Speaker Change: Hello, Hi.
Speaker Change: Hi, Thank you for taking my questions a question agenda.
Speaker Change: My first question is that can I.
Speaker Change: I clarify.
Speaker Change: You mentioned about Fleming's billions of revenue for the leading age.
Speaker Change: Okay.
Speaker Change: Additional need another 1 billion contribution or the overall advanced packaging would you be open one bit.
King: King you may get it clear.
King: Tim mentioned is that on top of the 600 million dollar revenue achieved in 2020.
King: Or we will add another billion dollar.
King: Our revenue in the leading edge.
King: Okay, Yeah, that's very clear and can you for the also clarified that among that can.
King: Can we kind of a breakdown of that advanced packaging.
King: Two quick Fridays between like a T P or potentially a ethic or maybe H a N a as well.
King: All right.
King: Blended we will now give you the breakdown.
King: Okay. Thank you. Thank you.
Thank you.
King: My second question is are we know that deletion the based on the new restrictions following E U S guidance.
King: Yes.
King: Clients Chinese guys at TSMC.
King: Events node, mainly to the packaging by so quote.
Ned: Oh, it's Ned.
King: Why is that.
Ned: Yeah, so otherwise.
Ned: Is his empty you may not really be able to ship to those Chinese customers. So far.
Ned: Z perspective.
Ned: We are in the widening.
Ned: I'm just wondering that do.
Ned: Do we see that surge request or older what would that impact the hour.
Ned: Deterioration rate or I could potential.
Ned: Oh, the visibility of our outlook for the near term.
Laura: Thank you Hi, Laura.
Laura: You you are asking about the <unk>.
Speaker Change: Impact on our business right right right Okay.
Laura: Okay.
Okay.
Laura: Alright.
Laura: This is a new regulation from the I S.
Laura: And.
Laura: As we speak we are working aggressively with our foundry partner.
Laura: As well as many customers.
Laura: We're trying to understand the detailed execution the rules.
Laura: And also the the capacity requirement. So all of this are in the process right now.
Laura: The number that we've provided.
Laura: Currently does not include this potential upside.
Laura: We do understand there will be outside however, we do not have a definitive plan in terms of when this upside will happen.
Laura: The pricing.
Laura: As well as the type of package that are required. So at this point in time, we do understand this is an upside and we are aggressively working with our partner and customer trying to fill that demand.
Laura: Right now we don't have any more detailed information to provide.
Laura: Okay. Thank you I appreciate it very clear.
Laura: Yeah.
Laura: Yeah.
Laura: Morgan Stanley.
Oh, a gentleman and arris.
Laura: Happy new year.
Laura: So my first question is.
Laura: Sure.
Laura: Our new CIS.
Developments is basically.
Laura: You at the beginning at the opening remark equation about the co package.
Speaker Change: Optics, Ken can management took it all what our ASIC group can do for these oh.
C P O advanced packaging and testing.
Speaker Change: This is okay can we step problem on this topic.
Speaker Change: Charlie Your question Merrill edge to co package optics or are you asking in general about our R&D efforts.
Speaker Change: The CPO for example, what kind of service.
Speaker Change: Hey, Ken.
Speaker Change: Provide timing but.
Speaker Change: It would.
Speaker Change: It would be great. If you took about kind of a big picture I hope.
Speaker Change: You're working with.
Speaker Change: That AIG, if your customer supply chain and your foundry partner.
Speaker Change: They used a CPO development, because I believe ASIC and new.
Speaker Change: And there could be a lots of bottleneck in the supply chain. So so I'm not sure how ASE is going to to contribute to that.
Speaker Change: Okay, Charlie wants to know about the overall CPO.
Charlie Merrill: Involvement that ASE has at this time.
Speaker Change: If we could first answer that.
Speaker Change: Well I think you ever said as the new technology.
Speaker Change: Like.
Speaker Change: Like any new technology. It takes some time to incubate.
Speaker Change: As these crude is playing the.
Speaker Change: Critical.
Speaker Change: Role in the supply chain as part of the opt overall puzzle.
Speaker Change: We're working with our foundry partner closely the foundry technologies also evolving.
Speaker Change: We're working with our AC suppliers.
Speaker Change: Their architecture and system design.
Speaker Change: Well as to request to the foundry partner also evolving.
Speaker Change: And we're working with the <unk> system.
Speaker Change: In other words their overall thermal electrical power delivery.
Speaker Change: Under all of this constraint.
Speaker Change: We firmly believe the silicon photonics will be a vital.
Speaker Change: Incremental innovation to address many of these issues.
Speaker Change: And together with other innovations.
Speaker Change: So as I said that the ASC will play a critical role.
Speaker Change: In this new innovation.
Speaker Change: In terms of how do we work with our foundry a six and a system customers I will not be able to reveal.
Speaker Change: Any development plan the only thing I can say is we've been working on this for quite some time.
And then beyond.
Speaker Change: Everybody's moving.
Speaker Change: Very harden.
Speaker Change: As well as there are competing technology.
Speaker Change: We know all of the competing.
Speaker Change: <unk> technology will have a plateau and we have a ceiling, we firmly believe that the optics.
Speaker Change: We will be.
Speaker Change: A critical innovation or for the whole supply chain ecosystem.
Speaker Change: Pretty much I can't I can tell you so far in terms of revenue ramp up.
Speaker Change: The we are ramping up revenue however, nothing major at this point in time, if that's what you're interested.
Speaker Change: Thank you.
Speaker Change: Got you.
Speaker Change: Doctor.
Speaker Change: So my.
Speaker Change: I have a second question, but.
Speaker Change: Somehow can I have a clarification on.
Speaker Change: Lauren's question on the Oh ambien.
Speaker Change: Well is it okay.
Charlie Merrill: Charlie I would like to.
Charlie Merrill: So youre asking that does not count as your second question Charles.
Charlie Merrill: As I said because vacation he said okay. Okay, yeah sure sure.
Speaker Change: We can clarify for Charlie and for Lora.
Speaker Change: 1 billion extra revenue and the components of that.
Speaker Change: Yeah, Yeah, and then I have a second more importantly, why don't we go go for the second one I think there's also bought into.
Speaker Change: You have your investors because you can see how does the.
Speaker Change: Geopolitical dynamic space or your foundry partners may need.
Speaker Change: I need to say or is there you are.
Speaker Change: <unk> production plant. So there has been some discussion about winter.
Speaker Change: Since these should also.
Speaker Change: To cause.
Speaker Change: <unk> capacity New U S.
Speaker Change: And we're kind of being that the ASC becomes a more important partner.
Speaker Change: With TSMC in in <unk>. So the the reasonable question you said that winter.
Kelsey: As he said Kelsey during your.
Speaker Change: Kind of advanced packaging.
Speaker Change: Opportunity or operation in the U S.
Speaker Change: Yeah.
Speaker Change: Okay.
Charlie Merrill: Charlie would like first clarification on the $1 billion number and then if we could follow up with.
Charlie Merrill: The current U S geopolitical climate impact on our overall business at the time.
Ken: Got it thanks, Ken Yes, it was it because the last time you took about.
Ken: Advanced packaging, a total grammys out one btn, but now youre talking about.
Ken: One beta Usr's DJ.
Ken: <unk> and when you Institute all right it kind of.
Ken: Took.
Ken: <unk> is a.
Ken: Combining the niche and.
Ken: So I kind of get very very confused.
Ken: We got to let him answer first.
Speaker Change: Thank you.
Ken: Alright.
Ken: Terms of the billion dollar extra revenue.
Ken: From leading edge.
Ken:
Ken: Three quarter of it two.
Ken: Quarter of the AR will be willing and will be for peg from packaging.
Ken: I'm sorry.
Ken: And another 25% it will be coming from a bench testing.
Ken: It does answer your question on the first part.
Ken: Okay.
Ken: So 25% is.
Ken: But vince.
Ken: <unk>.
Ken: And 75% from lead.
Ken: Leading edge.
Ken: Thank you Jamie is it.
Ken: 75% related to advanced packaging, 25% related to testing.
Ken: Oh I see.
Ken: Of leading edge type products.
Ken: Oh, I see I see and then there's a huge upside right because.
Ken: Last year, you did a 600 million U S ours.
Ken: The original guidance he said.
Ken:
Ken: Above 1 billion so so.
Ken: So the original guidance you said that.
Youre going to grow over 400 million Usr's families I know youre growing one beating yourself Australia.
Is it a right comparison compared to your.
Ken: The numbers again, I think David Lee.
Oliver: We have leading edge revenue of around 250 million Oliver Alright, we grew that business in 'twenty four to over 600 million.
Ken: This year, we will add another $1 billion extra revenue.
Oliver: Visit.
Oliver: New technology.
Okay altogether, it'll be overlap with $6 billion from leading edge.
Oliver: Okay and that your previous guidance of both won but you didn't say how much it both the one beat in.
Oliver: Right correct, okay. Okay.
Oliver: And then as a super clear thank you.
Oliver: I'll go back to that a major question. Thank you.
Oliver: Your U S S plan.
Oliver: It's a.
Oliver: I'm trying to figure out the best way to answer that question.
Oliver: Okay.
Oliver: We have been working very closely with our in customers ask a partner to explore.
Oliver: What is the moat.
Oliver: Efficient.
Oliver: As was visible way.
Oliver: To ramp up.
Oliver: All sorts of packaging, including leading edge anywhere in the world.
Oliver: The current plan is.
Oliver: ASE will like to figure out.
Oliver: The mythology.
Oliver: The process.
Oliver: The automation.
Oliver: Ordered the yield.
Oliver: And all of the design database.
Oliver: In Taiwan, and this is where our resource are mostly concentrated.
Oliver: Before we have full confidence.
Oliver: We can fully execute the ramp.
Oliver: With reasonable results.
Oliver: We will not go outside of Taiwan.
Oliver: One we have achieved that.
Oliver: We will consider how to move.
Oliver: The person now that we have trained by then.
Oliver: The equipment the build of material.
Oliver: Now we have all ready mastered by then.
Oliver: Into other part of the World.
Oliver: The reason being.
Oliver: As we transfer some of the leading edge.
Oliver: By the way leading edge are constantly evolving every year is different.
Oliver: We are in this punches against resource and technology and Knowhow.
Oliver: Still the investment.
Oliver: And the qualification.
Oliver: Choirs, so much R&D resources.
Oliver: It's simply cannot be executed for ASE in any kind of a second life situations.
Oliver: It has to be a quarter, where all of our resource are concentrated so we can constantly.
Oliver: Maneuver in changed configuration and resource requirement and to ordered the run the experiments to know the right things to do.
Oliver: To really master that.
Oliver: Going to overseas.
Oliver: We will not do our customers.
Oliver: In the country that we're moving to direct service.
Oliver: And that has been the agreement that I have are.
Oliver: We have with our foundry partner as well as with our end customers.
Oliver: So did the the short answer is yes.
Oliver: We have all of this in the plan.
Oliver: However, we are in good communication to all of the rather than parties about a status were in.
Oliver: The value we have created.
Oliver: The learning a Z.
Oliver: That we have acquired.
Oliver: And I believe the end customer like the kind of rationale.
Oliver: Because I don't think this is just a money thing.
Oliver: At the end of the day is the utilization to cost.
Oliver: And for leading edge packaging is really about a yield so.
Oliver: So we really have them.
Oliver: Yes.
Oliver: Today I, just simply do not have the knowledge, we do not have the resource.
Oliver: To create a satellite situation.
Speaker Change: I see you guys have very very clear that seems gentlemen, and thanks Iris.
Speaker Change: You have a question from Mr. Goldcorp opening how long of JP Morgan.
Speaker Change: Okay.
Speaker Change: Yes, hi.
Speaker Change: Yeah.
Speaker Change: My first question is on best I think you mentioned no quibble with that.
Speaker Change: That's an accident rate in terms of growth.
Speaker Change: Is that an acceleration from the 18% year on year growth that we saw in Q4.
Speaker Change: That explanation any color you can give us on the test.
Speaker Change: <unk> also previously I think you talked about reaching 20% of revenues.
Speaker Change: Midterm target.
Speaker Change: Could you talk a little bit about when do you have that insight.
Speaker Change: As to reach 25% of revenues.
Speaker Change: And lastly, just wanted to understand.
Speaker Change: What are the margins for testing light.
Low to mid 30% level or is there some upside given that you are doing a lot more advanced.
Speaker Change: So <unk>, you're asking about our general test as Nash and.
Speaker Change: In relation to how it's going to grow.
Speaker Change: And then eventually the target in terms of where we want to get it to an overall margin structure basically the touch business.
Speaker Change: Yes.
Speaker Change: Yes, that's right yes.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: I think the momentum.
Speaker Change: Momentum of our business.
Speaker Change: Thank you.
Speaker Change: Putting a CBD.
Speaker Change: And we do have a fairly aggressive growth platform as well.
Speaker Change: Solve.
Speaker Change: Are they increasing iron key ratio.
Speaker Change: As well as trying to grab more pure testing business as well.
Speaker Change: So in the.
Speaker Change: I'd say as I mentioned that we are on our investment and tests will continue.
Speaker Change: To occupy a large chunk of overall capex.
Speaker Change: Roughly over 30% of the capital will be spent on test. This year and continued again I think this year, our test business will outgrow our Paddington misses by twofold.
Speaker Change: At this point.
Speaker Change: Okay does that answer your question.
Speaker Change: Yes could you also talk a little bit about the <unk> of packaging.
Speaker Change: That quickly.
Speaker Change: Quite clear.
Speaker Change: The penetration compared to Q4.
Speaker Change: Could we also talk a little bit of the models for dash.
Speaker Change: Our premium to sending us means like low to mid 30% gross margin.
Speaker Change: Is that interesting.
Speaker Change: Is it even given that you have a lot more advanced testing business right now.
Speaker Change: Tech business, we continue to have.
Speaker Change: Both the stable margin F.
Speaker Change: The 35% ish.
Speaker Change: Origin that.
Speaker Change: Year on year out and we're seeing that continuing.
Speaker Change: In 2025 as well.
Speaker Change: Got it thank you very much.
Speaker Change: My second question.
Speaker Change: Is on the leading edge advanced packaging and testing revenues.
Speaker Change: I think our understanding of the markets understanding is right now that most of this is in partnership with the leading foundry.
Speaker Change: How was the.
Speaker Change: Business momentum.
Sure.
Speaker Change: Full stack.
Speaker Change: Hum.
Speaker Change: Leading edge advanced packaging interesting going are we starting to get more.
Speaker Change: Full stack business also either on our own steam or.
Speaker Change: B D boundary and also.
Speaker Change: <unk> also talked about potentially <unk> being applied to some non AI applications also.
Speaker Change: Could you talk a little bit about what you're seeing on does too.
Speaker Change: <unk> and <unk>.
Speaker Change: J D packaging or non AI applications human right now most of it is AI.
Speaker Change: So you're asking about our leading edge advanced packaging.
Speaker Change: And in terms of.
Speaker Change: Are the developments within our focus type.
Speaker Change: <unk> type solutions.
Speaker Change: To a certain extent weather.
Speaker Change: Sure.
Speaker Change: Whether there is there is other R&D applications related to fan out that at this point yes.
Speaker Change: Yes outside of AI, because right now it seems like mostly but how do you see that being adopted by other customized that'd be in HBV at even at the mall.
Speaker Change: Okay.
Speaker Change: Alright, it's like all new technology, you always start with a bulldozer.
Speaker Change: And then the industry will find that anchor.
Speaker Change: Application or anchor customer or set of customers and.
Speaker Change: And that's why we have to create a brand new packaging technology, which has been around for a few years.
Speaker Change: But in the last two years he has gone through a rapid ramp up to.
Speaker Change: So now become more sophisticated and more mature with better known yield.
Speaker Change: As was the yield or any kind of evolution.
Speaker Change: That's what we have.
Speaker Change: After that.
Speaker Change: The other customers will start adopting the same type of modality. So the answer your original question yes.
Speaker Change: We have seen other non AI.
Speaker Change: Well I'm not sure exactly you know what is now a I know it seems like everything thing unrelated but anyway.
Speaker Change: If you really need to differentiate.
Speaker Change: They are there other type application also adopting the same type of platform, we have seen that now.
Speaker Change: Now what we have seen more is.
Speaker Change: The related fields.
Speaker Change: I or AI peripheral.
Speaker Change: We will have the basic.
Speaker Change: Basic customers.
Speaker Change: As well as system customer.
Speaker Change: <unk> Cushing for the old vintage or their own version of the architecture.
Speaker Change: And that evidently will fall into the similar type of platform.
Speaker Change: So.
Speaker Change: From <unk> perspective.
Speaker Change: We have two things.
Speaker Change: We keep a very transparent communication with our partners our end customers are all foundry customers.
Speaker Change: So we're fully aware of what we're doing across the board.
Speaker Change: So there's no confusion about who does what.
Speaker Change: At all are doing objective is to make sure we deliver as much as we can.
Speaker Change: The ecosystem required firsthand.
Speaker Change: The second thing is as we're going through this ramp.
Speaker Change: We will make sure we have the good yield.
Speaker Change: It doesn't matter, which route that you're working through.
Speaker Change: So this is the process.
Speaker Change: Now we're going through right now.
Speaker Change: 2023 is we'll start at.
Speaker Change: 'twenty 'twenty four really is a year of transition I think the oil companies, including ASC, we spend a majority of the time trying to figure out.
Speaker Change: In which direction do we ramp.
Speaker Change: And how do we ramp so it has been by people four four for everybody.
Speaker Change: 24 will be the 125 will be the first year, we start seeing the effect of all of the deployment and the investment.
Speaker Change: Which should be follow through by 2026 and 2027.
Speaker Change: Now in order to ramp.
Speaker Change: 'twenty three 'twenty, four and 'twenty, five and become bigger impact in 'twenty six 'twenty seven.
Speaker Change: You need to have all this come in.
Speaker Change: Now AI or other type application to come in.
Speaker Change: Also not just the chip design Dr. B, the AC guys needs to come in the system people needs to come in and more importantly.
Speaker Change: As the AI algorithm become more efficient.
Speaker Change: It will enable or entice them.
Speaker Change: A different kind of algorithm.
And different kind of applications. So I think the AI edge devices with.
Speaker Change: We'll also be.
Speaker Change: We will have a lot of invented.
Speaker Change: Which means that there'll be more heartware were integrated.
Speaker Change: System level hardware that are required and all of this we will use the similar type of platform, although different configuration different bill of materials.
Speaker Change: It's a very long answer, but it's a good question.
Okay.
Speaker Change: Thanks.
Speaker Change: Maybe one clarification on.
Speaker Change: Outsourcing part from the partnership with the foundry versus.
Speaker Change: Your own.
Speaker Change: Stack solutions, including bulk order book was branch like what is the kind of mix that you are expecting over the next maybe I think this year, maybe next year in terms of your visibility.
Speaker Change: Okay.
Speaker Change: Can we take that on the inner circle back a little bit later.
Yes, I apologize.
Speaker Change: Next question is from Mr. Brett Lynn L. B O N E.
Brett Lynn: Well. Thank you management for taking my question I have questions. So the first one I would like to follow up their component of the well grow without adding the best pattern for this year, obviously, the at least 1.6.
Brett Lynn: BLA in kind of the revenue from this segment is well clearly pretty strong upside and 75% for all packaging I'd have you, 5% bond that pain.
Brett Lynn: Well were you I would like to know if.
Brett Lynn: There. It is it was there anything change in management in turns out in terms of this the revenue target for the tiny font or that was simply in line with irritation places the moniker or six months ago and that if there is upside the stock coming from the packaging side.
Brett Lynn: Or is there any significant breakthrough in the from the testing side. Thank you.
Speaker Change: So Brian Youre looking for what changed in the meantime that.
Brett Lynn: You perceive that the number.
Speaker Change: As <unk> ramped up right.
Brett Lynn: What are the factors that changed.
Brett Lynn: I guess, yes, and then for the component the entire 25.
Brett Lynn: If that there is upside then well Arthur to previous expectation is Scott coming from packaging or testing.
Brett Lynn: Okay.
Brett Lynn: We can take that.
Brett Lynn: Brad wants to know about the components in that.
Brett Lynn: What changed.
In the meantime to within those components for us to come up with our $1 6 billion dollar target.
Brett Lynn: To answer the question I think the best way is there was no surprise.
Brett Lynn: Yes.
Brett Lynn: The only thing.
Brett Lynn: The guard band.
Brett Lynn: Joseph and myself, our previous estimate as our own ability to execute.
Brett Lynn: The demand.
Brett Lynn: I think I'm going to talk about the demand there.
Brett Lynn: Clearly, how do we ramp our resources facility.
Brett Lynn: <unk>.
Brett Lynn: But we don't necessarily use all of it is immaterial.
Brett Lynn: We don't necessarily use out of the same equipment and there hasn't been a lot of collaboration.
Brett Lynn: Everybody's side.
Brett Lynn: I think <unk>.
Brett Lynn: As we walk through 2024.
Brett Lynn: We start to gain confidence.
Brett Lynn: We can execute.
To our.
Brett Lynn: Plan.
Brett Lynn: So the I think the short answer is.
Brett Lynn: There was no.
Brett Lynn:
Brett Lynn: Outside or surprising news.
Brett Lynn: Throughout 2024.
Brett Lynn: I think <unk>.
Brett Lynn: Likewise.
Brett Lynn: In 2025.
Brett Lynn: While we're executing a deliberate a manufacturing side.
Brett Lynn: We will continue to expand.
Speaker Change: Based on the roadmap how.
Brett Lynn: We have made it too.
Brett Lynn: To our end customers and to our partner.
Brett Lynn: In terms of the assembly and testing portion there could be minor adjustment.
Brett Lynn: But largely because it was a turnkey so we pretty much know what our ratio is.
I think Joseph and I would talk about this this is really the first time.
Speaker Change: At Boto, both of hungry to be explicit and giving you a very special number and also the mix.
Brett Lynn: Because we do have sufficient confidence in.
Brett Lynn: In delivering this at least to 2025 level.
Around midyear, we will.
Brett Lynn: Probably give you a better color about the 2026.
Brett Lynn: I do understand that there has been concern about the.
Brett Lynn: Whether there's a market fluctuation either up or down.
Brett Lynn: But based on our visibility for.
Brett Lynn: For hardware demand.
Brett Lynn: No I think work to India under supply situation. So again, we're just trying to ramp up to.
Brett Lynn: To best our capability in terms of the long term.
Brett Lynn: The capacity.
Brett Lynn: And there are other concern you view, putting all of this capacity.
Brett Lynn: Let's just say 510 years down the road can use them.
Brett Lynn: I believe is the.
Brett Lynn: AI is at the early stage.
Brett Lynn: We're seeing the hyper scaler.
Brett Lynn: At high level.
Brett Lynn: And over time, the other application, which I've answered previously.
Brett Lynn: We'll ask the real volume is going to be in the edge.
Brett Lynn: I think the kind of capacity, we put it in a way.
Brett Lynn: We'll be fungible and flexible in nature.
Brett Lynn: We will be able to tailor.
Brett Lynn: For many applications and many of the customers long term.
Brett Lynn: And most importantly, I think can talk about this.
Brett Lynn: I think this is the right time, we need to widen the moat.
Brett Lynn: Bye.
Brett Lynn: Making the appropriate affordable investment.
Brett Lynn: And trying to create the smart factory and all of the large number of database.
Brett Lynn: Because the knowhow on the AI and the platform in a brain level.
Brett Lynn: We help us tremendously.
Brett Lynn: In terms of <unk>.
Brett Lynn: Credibility and also confidence to our system customer when they want to when they are ready to create the edge devices for their edge system.
Brett Lynn: Which will involve many of the things that we're doing and the H P C level.
Brett Lynn: <unk>.
Brett Lynn: Okay.
Brett Lynn: Thanks, very much that's very clear and they're well may I follow up did the math all the OS sowed by Western Meek. Please go ahead.
Brett Lynn: Yeah, so how what's the mix of the well testing and package. It four times a day for you if I may.
Brett Lynn: That's your second question no.
Brett Lynn: Well why don't we go onto a wider okay. So yeah, yeah. Yeah. So my second question would be on the UL. Obviously, we are very happy to learn that that this kind of other beds packaging are leading edge advanced packaging would be applied to an application a crows GPU ASIC and when the edge devices.
Brett Lynn: And so.
Brett Lynn: That's the main Timothy and you're seeing the strength and momentum maybe in the now well.
Brett Lynn: No not on the GPU side or.
Brett Lynn: If there if.
Brett Lynn: Any well well option that management can take with the amendment pyro ties.
Brett Lynn: Either ASIC GPU or edge device.
Brett Lynn: And our web BD, well criteria, maybe profitability or margins. Thank you.
Brad: Brad wants to Brad your question related to our so our preference or even.
Brett Lynn: What.
Brett Lynn: Devices potentially outside of that that we are being exposed to.
Brett Lynn: In terms of days, leading edge about the packages is that primarily right.
Brett Lynn: Yes, and then well it would be great to know, if well with irwell ethic, or GPU or the edge device well.
Brett Lynn: With this kind of the best packaging technical architecture.
Brett Lynn: One we are doing better or well, providing better margin for the first thank you all.
Brett Lynn: I could probably answer that but I'm going to let I'm going to pass that along.
Brett Lynn: Well the the the correct answer.
Brett Lynn: We're working with all of them.
Brett Lynn: Which is the true.
Brett Lynn: And we in this space there are limited.
And customers, so I will not be able to go down to the detail because now whatever asset you can immediately link that to the customers there arent that many of them are.
Brett Lynn: The the truth is we're working with all of them trying to develop the appropriate architecture based on their requirements and their requirement would change will evolve based on their may update our yield manufacturer ability and cost and we will provide you a better clarity when we.
Brett Lynn: I believe it is the time to to disclose our right now we won't be to give you any kind of priority or you know who's taking west Danesh.
I only lump.
All of the debt.
Speaker Change: The leading edge and one confusion I would like to clarify a little bit the ASE versions of leading edge is a very leading edge defined by our foundry customers.
Speaker Change: Which is why 250 ramp up to 600, <unk> when Bob ran up to $1 6 billion.
Speaker Change: The other advanced packaging for example, a seven nanometer is also advantaged.
And we do not count that as the leading edge.
Speaker Change: On the <unk>.
Speaker Change: Such that we can give you better clarity.
Speaker Change: A little bit more specific.
Speaker Change: Alright, but there are other opportunity.
Speaker Change: No seven nanometer or the 14 nanometer, they're also used pre the leading at the.
Speaker Change: The previous advanced packaging is a little bit confusing there, but I just want to make sure you understand what we're referring to for the one 6 billion. Thank you.
Speaker Change: Thank you, yes, I do thank you very much.
Brad: Thank you Brad.
Speaker Change: We have a question from Mr. Jason <unk>.
Speaker Change: CL Securities.
Speaker Change: Hello can you hear me.
Speaker Change: Yes, yes.
Speaker Change: Thank you for taking my question and.
Speaker Change: And my follow up the last question in terms of the white leased.
Speaker Change: We hear some rumors suggests that is six edge production line in China cannot support the client who are.
Speaker Change: Are not into the white list so.
Speaker Change: Wondering if you can give us more detail is your whole group Ken Oh.
Speaker Change: So supports.
Speaker Change: The clients or or or.
Speaker Change: <unk> production could not support.
Speaker Change: If you can give us more detail. Thank you.
Speaker Change: Jason Your question relates to the U S V I S.
Speaker Change: Vacations in terms of.
Speaker Change: Our ability to work.
Speaker Change: Work with wireless or beyond the Wedbush correct.
Speaker Change: Correct.
Speaker Change: You're predominantly in China can also support.
Speaker Change: The client who are not in the wireless is that okay or or.
Speaker Change: Only non China production lines.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Jason I would like to know more about our capabilities to support.
Speaker Change: Right less than non wireless customers are within our China facility.
Speaker Change: Yeah, Yeah. Thank you.
Speaker Change: Well, we want to be careful here because I don't want to give you any information that is not pertinent.
Speaker Change: Is that does not stick to the pis requirement.
Speaker Change: Right now we're in the process clarifying.
Speaker Change: For example.
Speaker Change: Our factory.
Speaker Change: Located inside of China.
Speaker Change: Which set of customer can lever.
Speaker Change: Onto this is clarified we would not give you any kind of official statement.
Speaker Change: We are in the process of working with our foundry partner.
As well as with the authority.
Speaker Change: The precise requirement.
Speaker Change: Pertinent to that questions.
Speaker Change: But what I can tell you is.
Speaker Change: In case, our China facility and not support any customer per se.
Speaker Change: And then we will explore the maximum probability of supporting that customer in Taiwan.
Speaker Change: And we're confident we will be able to come up with enough capacity in due time to support that.
Speaker Change: For other customers that would like to move to Taiwan.
We are in the process of.
Speaker Change: Defining the required capacity the investment.
Speaker Change: While we're ramping up all of the other leading edge.
Speaker Change: However, ramping up Arthur advanced capacity will be a easier task because ASE factories in Taiwan.
Speaker Change: A highly automated.
Speaker Change: But we don't believe that challenge is too daunting Bosch. However, we cannot give you a definitive answer because we do not have a definitive clarity at this point maybe towards the second quarter, we'll have a better clarity and we'll be able to give you the right and.
Speaker Change: Sure.
Speaker Change: Misleading you.
Speaker Change: Thank you.
Speaker Change: That's helpful.
Speaker Change: My second question is in terms of your outlook for your.
Speaker Change: Kind of applications. So could you. Please give some colors in terms of of course momentum in terms of communication computing consumer intangible or industrial.
Speaker Change: That's all.
Speaker Change: And a quick kind of gross momentum.
Speaker Change: Did you expect for this year.
Speaker Change:
Speaker Change: Stomach creations or a new market shares or N demands improvement. Thank you very much.
Speaker Change: So Jason Youre looking for clarification or more color on that.
Speaker Change: The various growth opportunities available to us.
Speaker Change: Yeah, correct, yeah in different kind of applications.
Speaker Change: Okay.
Speaker Change:
Speaker Change: If we could answer.
Speaker Change: But what's the growth be in various applications.
Speaker Change: What or what we're expecting.
Speaker Change: Well I think it's logical to assume that.
Speaker Change: In the coming quarters.
Speaker Change: P C or computing.
Speaker Change: Sure.
Speaker Change: We'll have we'll show the strongest momentum.
Speaker Change: In total the general market was seeing communication.
Speaker Change: The Capri.
Speaker Change: Better than other sectors.
Speaker Change: I see.
Speaker Change: Every.
Speaker Change: Els.
Speaker Change: Maybe automotive.
Speaker Change: You've seen that in a recovery mode and we are seeing.
Speaker Change: This is in these areas.
Let's start to come back in the 2025.
Speaker Change: Although both what's it take a little while before.
Speaker Change: Before and I think the most recent.
Speaker Change: Consensus is that.
It would be maybe third quarter. This year, when we started to see automotive.
Speaker Change: Coming back to our board.
Speaker Change: Stable level.
Speaker Change: So I think in terms of the.
Speaker Change: Our revenue components I think.
Speaker Change: It's I think it's logical to assume that computing will continue to occupy.
Speaker Change: Percentage of our revenue.
Speaker Change: Headwaters.
Speaker Change: Okay.
Speaker Change: Thank you Adam.
Speaker Change: Thank you.
Speaker Change: Thank you very much.
Speaker Change: Can do we have any other questions from analysts.
Speaker Change: Hi, yes.
Speaker Change: We actually have a question that was.
Speaker Change: Sent over from Us from Sunny Lin of UBS I think she may be having some problems with her.
Speaker Change: With her internet.
Speaker Change: She asked.
Speaker Change: Regarding our collaboration with battery under advanced packaging.
Speaker Change: Would we be able to do more with them.
Speaker Change: And in particular.
Speaker Change: Whether whether the on substrate component is.
Speaker Change: The main business.
Speaker Change: We're sticking with that.
Speaker Change: I think the right way to answer that question is D. I think our foundry partners open to all suggestions and visibility.
Speaker Change: And then the.
Speaker Change: The requirement is.
Speaker Change: Can we fulfill the capacity with.
Speaker Change: An acceptable yield and ramp up quality.
Speaker Change: And then the is there is a step by step process.
Speaker Change: With the strength of poor from a foundry partner to guide us to get with our partner and customer.
Speaker Change: Trying to achieve that and I think we're trying to.
Speaker Change: Execute.
Speaker Change: Two.
Speaker Change: To that target to that of chapter.
Speaker Change: In terms can we expand.
Speaker Change: The current portfolio into something else.
Speaker Change: I don't think a foundry partner is objecting to it.
Speaker Change: The I think everything is possible, but at this point in time.
Speaker Change: We would like to hold that comment until we have better clarity.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: Her second question here.
Speaker Change: Relates to.
Speaker Change: Our investment in leading edge advanced packaging.
Speaker Change: Whether it is weather.
Speaker Change: Whether it's highly concentrated in terms of ultimate device or whether we view that this type of investment and widely usable or <unk> going forward.
Speaker Change: I thought I just answered that question.
Speaker Change:
Speaker Change: Yes, yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay do we have another question.
Speaker Change: Yeah.
Speaker Change: Yes, we do have Mr. Vogel <unk> <unk>.
Speaker Change: For the call.
Speaker Change: Oh, hi, Thanks for taking my follow up.
Speaker Change: So just.
Speaker Change: Enabling this morning on the advanced packaging and testing.
Speaker Change: No.
Speaker Change: Your partner has talked about.
Speaker Change: <unk> revenues for them.
Speaker Change: <unk>.
Speaker Change: And over the next five years and when I look at it.
Speaker Change: <unk>.
Speaker Change: Leading edge advanced packaging exposure. It also keeps track the leading foundries.
Speaker Change: AIE revenues, but pretty much like a one year lag.
Speaker Change: So is that does that kind of like the growth rate that we can expect or your business also when you're married.
Speaker Change: That does.
Speaker Change: It does.
Speaker Change: Foundry only partner like should we expect that you should also be able to grow those revenues at Laguardia.
Speaker Change: CAGR over the next five years.
Speaker Change: And then adding the capex spend.
Speaker Change: So <unk>, you're asking regarding whether our leading edge advanced packaging tracks with.
Or how that tracks with <unk>.
Speaker Change: Foundry H P C growth boundaries.
Speaker Change: Yes exactly.
Speaker Change: Even if our data where you fit within the target for the next five years.
Speaker Change: Okay.
Speaker Change: We would like to take this one year at a time.
Speaker Change: Okay.
Speaker Change: I think the there is a lead indicator.
Speaker Change: If you look at the our announcement.
Speaker Change: Capex of machinery.
Speaker Change: That normally will give you a very good indicator.
Speaker Change: On the right track or not.
Speaker Change: If we're now on the right track.
Speaker Change: We will try to reduce the spending.
Speaker Change: We know of.
Speaker Change: <unk>.
Speaker Change: The trajectory is not heading the right direction.
Speaker Change: So at this point in time, we would like to take a more conservative approach, let's just take one year at a time I think for 'twenty 'twenty four we.
Speaker Change: We deliver we executed.
Speaker Change: 2025, the first year, we're trying to give a preposition.
Speaker Change: We gave you a target for full year, which we have never done that.
Speaker Change: The I think we would like to be weighted to.
Speaker Change: To the second quarter to the third quarter before we give you the 'twenty six 'twenty seven projection. Thank you.
Speaker Change: Got it and honest.
Speaker Change: Capex.
Speaker Change: Could we talk a little bit about what does the yard.
Speaker Change: Kind of.
Speaker Change: Like payback or like how do you how do you think about that Capex and the Ottawa.
Speaker Change: The estimate.
Speaker Change: Maybe he just says how do you think about the capex.
Speaker Change: It will be do we have a number attached to it that begin begin Chad.
Speaker Change: And in terms of <unk>.
Speaker Change: <unk> that youre looking at.
Speaker Change: So you are looking for that the cabinet or a <unk>.
Speaker Change: General philosophy in terms of how.
Speaker Change: We look at our Capex.
Speaker Change: Exactly because this year I think the total capex seems like it's not all been also right.
Speaker Change: And mission.
Speaker Change: I think where we're not yet that is state of the these new investments.
Speaker Change: Thank you.
Speaker Change: A little bit premature to to pinpoint exactly what kind of return to what kind of.
Speaker Change: Capital intensity, that's required for the for the business.
Speaker Change: So we will like to reserve that until later.
Speaker Change: Maybe in the second half we will have.
Speaker Change: More accurate numbers.
Speaker Change: To.
Speaker Change: To address this issue.
Speaker Change: But what I can say is brought by the.
Speaker Change: But the business that we're writing today.
Speaker Change: The leading edge is margin accretive business for us.
Speaker Change: Okay.
Speaker Change: Got it understood that's very clear thank you.
Speaker Change: Thank you.
Speaker Change: Yeah. There is no other questions from the floor.
Speaker Change: Uh huh.
Speaker Change: If there are no other questions I think we can end it right here, where we're getting close to about our in App.
Speaker Change: You for attending.
Speaker Change: Our full year earnings release, we will see you next quarter.
Speaker Change: Thank you.