Q1 2025 ASE Technology Holding Co Ltd Earnings Call

Operator: Thank you for attending our earnings releases 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.

Please Nike 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.

Operator: 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 stated. 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 including those presented by our subsidiary using Chinese GAP.

<unk> 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 as presented in accordance with Taiwan I F. R. S.

Speaker Change: Results presented using Taiwan, I FRS may differ materially from results using other accounting standards, including those presented by our subsidiary to using Chinese gap I'm joined today by Joseph Tung, Our CFO for today's presentation I'll be going over the financial results Ed.

Operator: I am joined today by Joseph Tung, our CFO. For today's presentation, I will be going over the financial results and company guidance. Joseph will then be able to take your questions during the Q&A session that follows.

<unk> company guidance Joseph would then be able to take your questions. During the Q&A session that follows during the Q&A session I will be moderating receiving an as needed clarifying and condensing each interaction down to a single question with that let's get started with the finance.

Operator: During the Q&A session, I will be moderating, receiving, and as needed, clarifying and condensing each interaction down to a single question. With that, let's get started with the financial. Our first quarter revenues came in ahead of our original outlooks for both our ATM and EMS. There appeared to be a slight accelerated seasonality from certain customers that emerged during the first quarter. Especially as it pertains to our We believe there are some customers looking to minimize supply chain volatility. by building secure inventory ahead of potential.

Speaker Change: All results are.

Speaker Change: Our first quarter revenues came in ahead of our original outlooks for both our ATM and EMS businesses, there appeared to be a slight accelerated seasonality from certain customers that emerged during the first quarter.

Speaker Change: Partially as it pertains to our EMS business.

Speaker Change: We believe there are some customers looking to minimize supply chain volatility by building secure inventory ahead of potential trade tariffs with that said we are unable to quantify such impact as we do not have a method to ascertain inventory build levels from regular order flow.

Operator: With that said, we are unable to quantify such impact as we do not have a method to ascertain inventory build levels from regular order.

Operator: On the flip side, we also saw some delay in upstream component availability due to the January earthquake in southern Taiwan. Within our ATM business, our leading-edge advanced packaging, or LEAP, services continued its strong growth and were generally full during the quake. For the first quarter, LEAP services accounted for 10% of our overall ATM revenues, as compared to 6% for the full year. Our test business also continued its strong momentum growing 2% in the usually seasonally down quarter. Our overall utilization rate came in slightly above our original expectation of 65%. with the latter part of the quarter faring better than the beginning.

Speaker Change: <unk>.

Speaker Change: On the flip side, we also saw some delay in upstream component availability due to the January earthquake in southern Taiwan within our ATM business, our leading edge advanced packaging or leap services continued its strong growth.

Speaker Change: And we're generally fall during the quarter for the first quarter leave services accounted for 10% of our overall ATM revenues as compared to 6% for the full year 2024.

Speaker Change: Our test business also continued its strong momentum growing 2% and they usually seasonally down quarter. Our overall utilization rate came in slightly above our original expectation of 65% for the quarter with the latter part of the quarter fairing better than the beginning of the quarter.

Operator: Test utilization was full for advanced platforms while being in the 60s for trailing edge. Our EMS. also came in a bit ahead of expected. At this point, we believe our EMS business customers... May be adjusting order flow.

Speaker Change: Test utilization was fall for advanced platforms, while being in the sixties for trailing edge capacities.

Martin M.: Martin M. S business also came in a bit ahead of expectations. At this point, we believe our EMS business customers may be adjusting order follow patterns for the year and as a result, our EMS business may be experiencing a potentially shallower seasonal dip for the year.

Operator: of the Year. And as a result, our EMS business may be The overall macro environment has been rather unsettled over the early part of this year. Given that our strategic decisions and investments are evaluated on a long-term basis, These decisions become significantly more difficult with rapidly changing businesses. For us, volatility is the enemy of sound long-term planning. But even with such volatility, we can continue to focus on core trends of our industry and the Technological trends, such as the increasing importance of package-based connective technology, will continue to persevere regardless of the macro. Continuous improvement of our process.

Speaker Change: Yes.

Speaker Change: The overall macro environment has been rather unsettled over the early part of this year.

Speaker Change: Given that our strategic decisions and investments are evaluated on a long term basis. These decisions becomes significantly more difficult with rapidly changing business fundamentals.

Speaker Change: For us volatility is the enemy of sound long term planning and strategy, but even with such volatility. We can continue to focus on core trends of our industry and the strengths of the company.

Speaker Change: Technological trends such as the increasing importance of package base connective technologies will continue to persevere, regardless of the macro environment. The continuous improvement of our process technologies remains paramount to continuing to extend.

Operator: remains paramount to continuing to extend our competitive advantage. From a business perspective, we also continue to believe the assuredness of profitability. and the market sustainability of our product. remain the key evaluation points when looking at business opportunities. Small and Large.

Speaker Change: Our competitive advantages.

Speaker Change: From a business perspective, we also continue to believe the assuredness of profitability.

Speaker Change: And the market sustainability of our product offerings remain the key evaluation points when looking at business opportunities, both small and large.

Operator: In a nutshell, we need to minimize the short-term noise in order to reach the long-term. For today, we will attempt to avoid the noisy play-by-play while continuing to try to offer insights into the strategy and positioning of the company on a longer.

Speaker Change: In a nutshell, we need to minimize the short term noise in order to reach the long term signal for.

Speaker Change: For today, we will attempt to avoid the noisy play by play while continuing to try to offer insights into the strategy and positioning of the company on a longer term basis.

Operator: With that, let's go through the numbers and Please turn to page 3 where you will find our First Quarter Consolidated In the first quarter, we recorded fully diluted EPS of $1.00. Basic EPS of $1.75. Consolidated net revenues declined by 9% sequentially and increased 12% year-over-year. We had a gross profit of $24.9 billion with a gross margin of $16.9 billion. Our gross margin improved by 0.4 percentage points sequentially and improved by 1.1 percentage points year-over-year. The sequential improvement in margin is primarily due to foreign exchange fluctuations and the higher ATM products. The annual improvement is primarily due to foreign exchange, higher utilization, and beneficial products.

Speaker Change: With that let's go through the numbers in more detail.

Speaker Change: Please turn to page three where you will find our first quarter consolidated results. The first quarter, we recorded fully diluted EPS of $1 and 64 sides and basic EPS of $1.75.

Consolidated net revenues declined by 9% sequentially and increased 12% year over year, we had a gross profit of 24.9 billion with a gross margin of 16.8% our gross margin improved by 0.4 percentage points sequentially.

Speaker Change: And improved by 1.1 percentage points year over year, the sequential improvement in margin is primarily due to foreign exchange fluctuations and the higher ATM product mix. The annual improvement is primarily due to foreign exchange higher utilization and beneficial product mix or.

Operator: Our operating expenses decreased by $0.2 billion sequentially. and increased by $1.9 billion annually. $15.2 billion. A sequential decrease in operating expenses is primarily due to lower factory supply and other expenses related to lower consumption during the holiday . offset by higher labor due to incremental The year-over-year increase in operating expenses is primarily attributable to continued R&D staff-up and other labor-related costs and geographical size. Our operating expense percentage increased sequentially by 0.8%. annually by 0.3 percent. year-over-year to 10. Operating profit was 9.7 billion, down 1.5 billion sequentially, and up 2.2 billion year-over-year. Operating margin declined 0.4 percentage points sequentially and improved 0.9 percentage points year over year.

Operating expenses decreased by 0.2 billion sequentially and increased by 1.9 billion annually to 15.2 billion.

The sequential decrease in operating expenses is primarily due to lower factory supply and other expenses related to lower consumption during the holiday period offset by higher labor due to incremental hiring.

Speaker Change: The year over year increase in operating expenses is primarily attributable to continued R&D staff up and other labor related costs and geographical site expansion.

Speaker Change: Our operating expense percentage increased sequentially by 0.8 percentage points and annually by 0.3 percentage points year over year to 10.3%.

Speaker Change: Operating profit was $9 7 billion down 1.5 billion sequentially and up 2.2 billion year over year.

Speaker Change: Operating margin declined 0.4 percentage points sequentially and improved 0.9 percentage points year over year.

Operator: During the quarter, we had a net non-operating gain of $0.1 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 in part by net interest expense of $1.3 billion. Tax expense for the quarter was $1.9 billion. Due to timing of certain tax expenses, our effective tax rate for the quarter was $29,000. higher than our full year projection of slightly below 20. Net income for the quarter was $7.6 billion, representing a decrease of $1.8 billion sequentially and an increase of $1.9 billion year-over-year. The NT dollar depreciated 2% against the U.S.

Speaker Change: During the quarter, we had a net nonoperating gain of zero point $1 billion.

Speaker Change: Our nonoperating gain for the quarter, primarily consists of net foreign exchange hedging activities profits from associates and other nonoperating income offset in part by net interest expense of $1.3 billion.

Tax expense for the quarter was 1.9 billion due to timing of certain tax expenses, our effective tax rate for the quarter was 20.6% higher than our full year projection of slightly below 20%.

Speaker Change: Net income for the quarter was 7.6 billion, representing a decrease of 1.8 billion sequentially and an increase of 1.9 billion year over year. The NT dollar depreciated, 2% against the U S dollar sequentially, while depreciating, 4.8%.

Operator: dollar sequentially while depreciating 4.8%. From a sequential perspective, we estimate the NT dollar depreciation had a 0.6% attribute Positive impact to the company's growth and operating market.

Speaker Change: Annual it from a sequential perspective, we estimate the NT dollar depreciation had a 0.6 percentage point positive impact to the company's gross and operating margins.

Operator: while from an annual. We estimate the NT dollar depreciation had a 1.4 percentage point positive impact to the company's growth.

Speaker Change: While from an annual perspective, we estimate the NT dollar depreciation had a 1.4 percentage point positive impact to the company's gross and operating margins on the bottom of the page we provide key P&L line items without the inclusion of PPA related expenses.

Operator: On the bottom of the page, we provide key P&L line items without the inclusion of PPA requirements. consolidated gross profit excluding PPA expenses with $5.4 billion with a 17.2% Operating profit would be $10.5 billion with an operating margin of $7.5 billion. Net profit would be $8.4 billion, with a net margin of $5.3 billion. Basic EPS excluding PPA expenses would be $1.99.

Speaker Change: Sedated gross profit, excluding PPA expenses would be 25.4 billion with a 17.2% gross margin.

Operating profit would be 10.5 billion with an operating margin of 7.1%.

Speaker Change: Nonprofit would be 8.4 billion with a net margin of 5.6%.

Speaker Change: Basic EPS, excluding PPA expenses would be one dollar ninety-three sacks.

Operator: On page four is a graphical presentation of our consolidated quarterly financial performance. Gross margins have been gradually improving, even heading into our seasonally slow. On the operating margin front, operating expenses are continuing to increase. primarily for LEAP business.

Speaker Change: On page four is a graphical presentation of our consolidated quarterly financial performance gross margins have been gradually improving even heading into our seasonally slow first quarter.

Speaker Change: On the operating margin front operating expenses are continuing to increase primarily for leap business preparation.

Speaker Change: Labour acquisition, and retention and offshore site expansion costs.

Operator: On page 5 is our ATM. The ATM revenue reported here contains revenues eliminate holding company level related to intercompany transactions between our ATM and EMS. For the first quarter of 2025 revenues for ATM business were 86.7 billion down 1.7 billion from the previous and up $12.8 billion from the same person. This represents a 2% decline sequentially. 17% in Gross profit for our ATM business was $19.6 million. down $1 billion. and up 4.1 billion Euro. Gross profit margin for our ATM business was $22.7 million. down 0.7 percentage points sequentially and up 1.6 percentage points year-over-year. The sequential margin decline was primarily due to softer loading during our seasonally soft first quarter, offset in part by foreign The Annual Margin Improvement is primarily the result of higher loading, product mix, and foreign exchange differences.

Speaker Change: On page five 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 at EMS businesses.

Speaker Change: For the first quarter of 2025 revenues for our ATM business were 86.7 billion down 1.7 billion from the previous quarter and up 12.8 billion from the same period last year. This represents a 2% decline sequentially.

And a 17% increase annually.

Speaker Change: Most profit for our ATM business was 19.6 billion down 1 billion sequentially and up 4.1 billion year over year.

Speaker Change: Gross profit margin for our ATM business was 22.6% down 0.7 percentage points sequentially and up 1.6 percentage points year over year. The sequential margin decline was primarily due to softer loading during our seasonally soft first quarter.

Speaker Change: Offset in part by foreign exchange impact.

The annual margin improvement is primarily the result of higher loading product mix and foreign exchange differences offset by higher utility costs.

Operator: Offset by Hire You During the first quarter, operating expenses were $11.3 billion, up $0.1 billion sequentially, and $1.8 billion year-over-year. The sequential increase in operating related to primarily the results of R&D, ramp-up, and labor are operating expense percentage for the quarter. increasing 0.4 percentage points sequentially and up 0.2 percentage points annually. The sequential increase was primarily related to seasonality of revenue, while the annual increase was primarily due to labor ramp-ups preparing for higher leading-edge advanced During the first quarter, operating profit was $8.3 billion, representing a sequential decline of $1.1 billion, and an annual increase of $2.3 billion.

During the first quarter operating expenses were 11.3 billion up 0.1 billion sequentially and 1.8 billion year over year.

Speaker Change: These sequential increase in operating expenses were related to increased head count.

The annual increase is primarily the result of R&D ramp up and labor related expenses our operating.

Operating expense percentage for the quarter was 13%, increasing 0.4 percentage points sequentially and up 0.2 percentage points annually. The sequential increase was primarily related to the seasonality of revenue while the annual increase was primarily due to labor ramp ups.

Preparing for higher leading edge advanced packaging revenues.

Speaker Change: During the first quarter operating profit was 8.3 billion, representing a sequential decline of 1.1 billion and an annual increase of 2.3 billion operating margin was 9.6% down 1.1 percentage point sequentially, while up 1.4 percentage points year over year for <unk>.

Operator: Operating margin was 9.6%, down 1.1 percentage points sequentially, while up 1.4 percentage points year-over-year. Foreign Exchange, we estimate that the NT to U.S. dollar exchange rate potentially has a positive 0.97 percentage point increase. to our ATM sequential margins and a positive 2.3 percentage point impact on a year over year basis. Without the impact of PPA related depreciation and amortization. ATM Gross Profit Margin would be 23.2%. and Operating Profit Margin would be 10.9%.

Speaker Change: Foreign exchange, we estimate that the N T to U S. Dollar exchange rate potentially had a positive 0.97 percentage point impact to our a T M sequential margins and a positive 2.3 percentage point impact on a year over year basis.

Without the impact of PPA related depreciation and amortization ATM gross profit margin would be 23.2% and operating profit margin would be 10.5%.

Operator: On page 6, you'll find a graphical representation of our AT&T On page 7 is our ATM revenue by 3C market. You can see here that the competing segment took a big step up in terms of relative position. This was made more apparent given the stable, high-demand nature of AI. while handsets and other communications related devices were seasonally On page eight, you will find our ATM revenue by What is good to note is the testing percentage of our business has sustained We continue to believe we can gain market share and testing throughout. We now believe we are slightly ahead of plan for increasing...

Speaker Change: On page six you'll find a graphical representation of our ATM P&L.

Speaker Change: On page seven is our ATM revenue by three C market segments, you can see here that the computing segment took a big step up in terms of relative positioning of applications. This was made more apparent given the stable high demand nature of AI products, while handsets in <unk>.

Speaker Change: Their communications related devices were seasonally impacted.

Speaker Change: On page eight you will find our ATM revenue by service type moves here, we're generally product banks driven what is good to note is the testing percentage of our business has sustained at 18%. We continue to believe we can gain market share and testing throughout the year. We now believe we are.

Speaker Change: Slightly ahead of plan for increasing our test business by the end of the year, our test business should reach between 19% to 20% of our overall ATM revenue. We continued to be the largest provider of outsourced test services in the world and test is becoming a more strategically critical.

Operator: By the end of the year, our test business should reach between 19 to 20% of our overall ATMs. We continue to be the largest provider of outsourced test services in the world, and test is becoming a more strategically critical component of our overall strategy. We believe that as future products become more integrated with multi-chip and RDL-based The Insertion of Incremental during the assembly process. will become increasingly prevalent. potentially disrupting classic wafer probe and final For example, silicon and organic. like those used on the newest generation of AI. are ideally tested pre- and post-diagnosis. Post-die-attach test provides turnkey the opportunity to accelerate failure detection ahead of the final test process.

Speaker Change: <unk> component of our overall strategy, we believe that as future products become more integrated with multi chip and our D. L based packaging.

Speaker Change: The insertion of incremental test stops during the assembly processes will become increasingly prevalent potentially disrupting classic wafer probe in final test frameworks for example, silicon and organic enter posers like those used on the newest generation.

Speaker Change: <unk> of AI chips are ideally tested pre and post die attach.

Speaker Change: The post die attach test provides turnkey providers the opportunity to accelerate failure detection ahead of the final test process.

Operator: financially. We also believe that the test business is accretive to our overall ATMR. And as such, almost all acquirable tests. is good. We remain committed to being aggressive in the test. We have a target of gaining incremental test market share throughout the year.

Speaker Change: Financially.

Speaker Change: We also believe that the test business is accretive to our overall ATM margins and as such almost all Acquirable test business is good business.

Speaker Change: We remain committed to being aggressive in the test space, we have a target of gaining incremental test market share throughout the year. In particular, we continue to believe that we will start to make significant progress during the back half of 'twenty 'twenty five in regards to any.

Operator: In particular, we continue to believe that we will start to make significant progress during the back half of 2025 in regards to increasing our AI test On page 9, you can see the first quarter results of our EMS. During the quarter, EMS revenues were $62.3 billion, declining $12.6 billion, or 17% sequentially. while increasing $2.9 billion or 5% year over year. The sequential revenue decline is generally related to the seasonality of projects. While the annual revenue improvement is likely due to the current quarter following a slightly different season. Sequentially, our EMS business's gross margin improved 0.6 percentage points to 8.9.

Speaker Change: Creasing, our AI testing market share.

Speaker Change: On page nine you can see the first quarter results of our EMS business. During the quarter MFS revenues were 62.3 billion declining 12.6 billion or 17% sequentially, while increasing 2.9 billion or 5% year over year. Thus.

Speaker Change: The sequential revenue decline is generally related to the seasonality of products that we service.

Speaker Change: While the annual revenue improvement is likely due to the current quarter following a slightly different seasonal pattern.

Speaker Change: Sequentially, our EMS businesses gross margin improved 0.6 percentage points to a 0.9%.

Operator: This change was principally the result of product. Operating expenses within our EMS business declined $0.3 billion sequentially, and while increased The sequential expense decline was primarily attributable to lower running costs during the seasonally soft time Despite an absolute dollar decline in operating expenses sequentially, our first quarter operating expenses point was up 0.7. Annually, our EMS operating expense percentage was down 0.2 percentage points on higher Operating margin for the first quarter was 2.6%, declining 0.1 percentage points sequentially and year-over-year. Sequential and annual improvements were primarily due to product. Our EMS first quarter operating profit was $1.6 billion, down $0.4 billion sequentially, while flat annually.

Speaker Change: This change was principally the result of product mix.

Speaker Change: Operating expenses within our EMS business declined 0.3 billion sequentially and while increasing 0.1 billion annually. The sequential expense decline was primarily attributable to lower running costs during the seasonally soft timeframe.

Speaker Change: Despite an absolute dollar decline in operating expenses sequentially, our first quarter operating expense percentage of 6.3% was up 0.7 percentage points annually. Our EMS operating expense percentage was down 0.2 percentage points on higher revenues.

Speaker Change: Operating margin for the first quarter was 2.6% declining 0.1 percentage point sequentially and year over year, the sequential and annual improvements were primarily due to product mix.

Speaker Change: EMS first quarter operating profit was 1.6 billion down 0.4 billion sequentially, while flat annually.

Operator: You will find a graphical representation of our EMS revenue by application on the bottom The percentage shifts here are generally related to the seasonal nature of underlying consumer and communications processes.

Speaker Change: You will find a graphical representation of our EMS revenue by application on the bottom of the page the percentage shifts here are generally related to the seasonal nature of underlying consumer and communications products on page 10, you will find key line items from our balance sheet.

Operator: On page 10, 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 $93.5 billion. In Preparation for Upcoming Capital Expenditure. Total interest-bearing debt increased by $17.7 billion to $231.6 billion. We anticipate increasing our debt outstanding. Total unused credit lines amounted to $358.4 million. Our IPADA for the quarter was 27. Our net debt to equities this quarter was $41,000. As a point of reference, we anticipate that our net debt to equity will be peaking in the third quarter. at or near.

Speaker Change: At the end of the year, we had cash cash equivalents and current financial assets of $93.5 billion.

Speaker Change: In preparation for upcoming capital expenditures, our total interest bearing debt increased by $17.7 billion to 231.6 billion, we anticipate increasing our debt outstanding throughout the year.

Speaker Change: Total unused credit lines amounted to 358.4 billion, our EBITDA for the quarter was 27.6 billion, our net debt to equity this quarter was 41% as point of reference we anticipate that our net debt to equity will be peaking in the third quarter of this year.

Speaker Change: At or near 60%.

Operator: On page 11, you will find our Equipment Capital Expenditures relative to our Machinery and Equipment Capital Expenditures for the First Quarter and U.S. Dollars totaled $892 million. of which $395 million were used in packaging. $472,000,000 in test 23 million in EMS operations and 2 million. Interconnect material. In addition to spending on machinery and equipment during They also spent $410 million on facilities, which includes land. the machinery and equipment we are investing in. They also represent a broader target of servicing the generational evolution of packaging in Lakota. Future Generations of AI, Networking, and Communic- have fundamental needs for specification improvements.

Speaker Change: On page 11, you'll find our equipment capital expenditures relative to our EBITDA.

Speaker Change: Machinery and equipment capital expenditures for the first quarter in U S dollars totaled $392 million of which 395 million were used in packaging operations 472 million of testing operations $23 million in EMS operations and $2 million in.

Speaker Change: Interconnect material operation and others.

Speaker Change: In addition to spending on machinery and equipment during the quarter. We also spent 410 million on facilities, which includes land and buildings.

Speaker Change: The machinery and equipment, we are investing in this year not only represent capacities allocated for current product demand. They also represent a broader target of servicing the generational evolution of packaging and electronic devices.

Speaker Change: Future generations of AI networking and communications have fundamental needs for specification improvements only leap can provide.

Operator: Only LEAP. whether it's the need to move power delivery closer to the power. or the need to bring HBM closer to Logic. or the need to address higher IO densities and newer generations of future. All these core trends will require the generational leap in equipment and facilities we are currently installing. And though we continue to possess the ability to adjust capital equipment delivery. Current investment timelines continue to align with capacity.

Speaker Change: Whether it's the need to move power delivery closer to the package.

Speaker Change: Or the need to bring H b M closer to logic dies or the need to address higher I O densities and newer generations of future products.

Speaker Change: All of these core trends would require the generational leap in equipment and facilities. We are currently installing.

Speaker Change: And though we continue to possess the ability to adjust.

Speaker Change: Capital equipment delivery times.

Speaker Change: Current investment timelines continue to align with capacity needs.

Operator: Heading into the second quarter. product flow appears. Our leading edge advanced packaging and testing businesses continue to lead the way. And as we've mentioned, we are seeing some potential for accelerated seasonality and inventory build during the second quarter. And as stated earlier, we are not necessarily able to fully discern Customer Inventory Build, and Customer Product Sell. Avoiding a potentially thornier tariff environment by accelerating production would appear to be rational. However, it comes with a large caveat that wafers must have been completed. substrates are ready. And we have the proper tooling and capacity. support the Accelerator.

Speaker Change: Heading into the second quarter product flow appears to be a strong our leading edge advanced packaging and testing businesses continued to lead the way.

Speaker Change: And as we've mentioned we are seeing some potential for accelerated seasonality and inventory build during the second quarter and as stated earlier, we are not necessarily able to fully discern between customer inventory build and customer product sell through.

Speaker Change: Avoiding a potentially thornier tariff environment by accelerating production would appear to be rational. However, it comes with a large caveat that wafers must have been completed.

Speaker Change: Substrates are ready to go and we have the proper tooling and capacity to support the acceleration so not all who may wish to accelerate are able to do so.

Operator: So not all who may wish to accelerate are able. As such, there is some impact to our ATM business.

Speaker Change: As such there is some impact to our ATM business, but such impact is relatively limited.

Operator: Looking beyond the second quarter is probably impractical. But we, at this moment, have not seen any out-of-the-ordinary adjustments. may or may not be me.

Speaker Change: Looking beyond the second quarter is probably impractical at this time.

Speaker Change: But we at this moment have not seen any out of the ordinary adjustments, which may or may not be meaningful.

Operator: With that, we would like to summarize our for the second quarter of 2025 as follows. For our ATM business, in NTDollar terms, our ATM second quarter 2025 revenues should grow by 9 to 11%. Our ATM second quarter gross margin should increase by 140 to 180 basis points. for EMF. and NT Dollar. our EMS second quarter 2025. should decline 10%. Our EMS second quarter 2025. should decline by 100.

Speaker Change: With that we would like to summarize our outlook for the second quarter of 2025 as follows.

Speaker Change: For our ATM business in NT dollar terms, our ATM second quarter, 'twenty twenty-five revenues should grow by 9% to 11% quarter over quarter.

Speaker Change: R. A T M second quarter gross margin should increase by 140 to 180 basis points quarter over quarter.

Speaker Change: For our EMS business in NT dollar terms, our E. M. S second quarter 'twenty twenty-five revenues should decline 10% year over year.

Speaker Change: Our E M. S second quarter 2025, operating margin should decline by 100 basis points year over year.

Operator: During the Q&A session that follows, we would appreciate if questions can be kept concise and asked one at a time. I will be receiving each question and repeating the asked questions. Again, we will be limiting the number of questions. We have two questions per team. but ask one. Callers may return to the queue for additional questions.

Speaker Change: During the Q&A session that follows we would appreciate if questions can be kept concise and asked one at a time.

Speaker Change: I will be receiving each question and repeating the asked question to Joseph again, we will be limiting the number of questions asked to two questions per turn but ask one at a time.

Speaker Change: Callers may return to the queue for additional questions. Thank you.

Speaker Change: Yes.

Gokul Hariharan: Now we have a question from Mr. Gokul Hariharan.

Speaker Change: Now we have a question from Mr. Goku, how do you how long.

Gokul Hariharan: Okay, good afternoon, Ken and Joseph. Thanks for taking my question.

Speaker Change: Hey, good afternoon.

Speaker Change: Kevin Joseph Thanks for taking my question. My first question is on that.

Gokul Hariharan: My first question is on test. First of all, when you talk about increasing AI test market share, is it mainly for the dominant GPU platform that you're referring to in second half of this year? And second on test, I think I saw that the test capex even in Q1 is almost like 500 million, following on from the 900 billion that we spent last year. So we are starting to spend very heavy capex on test.

Speaker Change: First of all when.

Speaker Change: When you talk about E Z I its market share is it mainly on the dominant debuted platform that you're referring to in the second half of this year.

Speaker Change: And second on best I think I saw that the desk capex, even in Q1 is almost like 100 million.

Speaker Change: Following on from the 900 million to be spent last year.

Speaker Change: Starting to spin many heavy capex and test.

Joseph Tung: Joseph, can you outline how we should think about the economic return framework for the test investment? And how does that compare to your target ROE for the overall business, etc?

Speaker Change: Joseph can you outline how we should think about the economic return framework or the best investment.

And out of it compared to your target that OE or Google or business.

Joseph Tung: I go to so you're, you're looking for a summary in terms of What, in particular, is ramping up in the back half of the year, and also how that necessarily impacts our overall CAPEX spending for tests? Is that correct? Yeah.

Speaker Change: I go cause so you're you're looking for a summary in terms of.

Speaker Change: What <unk>.

Speaker Change: In particular is ramping up.

Speaker Change: In the back half of the year.

Speaker Change: And also how that necessarily impacts our overall capex spending for tests that correct yes.

Joseph Tung: Also, I think some economic framework, given the test CAPEX is now becoming pretty meaningful. I think even the single quarter CAPEX seems to be pretty chunky. Yeah, I think we will, we have been and will continue to be very, very aggressive in terms of making our test investment and aiming at continue to expand our market share in the test area. I think we have been making a lot of progress. As you can see, For the past two, three years, we have been growing our test portion of the business from 16% all the way to 18%.

Speaker Change: Also I think some economic framework given the desk Capex is now becoming pretty pretty meaningful in any given quarter GAAP it seems to be pretty pretty chunky.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah, I think we will we have been and will continue to be very very aggressive in terms of making our tests investment and are aiming at.

Speaker Change: To expand our market share in the test area.

Speaker Change: Area.

Speaker Change: I think we have been making a lot of progress as you can see.

Speaker Change:

Speaker Change:

Speaker Change: For the past two three years, we have been growing our test portion of the business from 16% all the way to a T and we were.

Joseph Tung: And we're looking at closing in to 20% by the end of the year.

Speaker Change: Looking at our policy aimed to 20% by the end of the year.

Joseph Tung: In terms of the composition of the test business, I think, aside from the, you know, the kind of the general market test, special emphasis is also put on the AI chips testing or more advanced testing as well. On that, I think, in terms of wafer store, we have been executing as planned and progress are being made. And I think the focus will also be turned on the final tests of these chips. And we are in the process of lining up and also aligning our capacity. And we expect to see progress in the second half of the year, in terms of penetrating into this very important market for us.

Speaker Change: In terms of the composition of the test business I think aside from the route.

Speaker Change: You know the kind of the general market tests special emphasis is also put on the air chips testing or more of us testing as well.

Speaker Change: On that I think in terms of wafers for we have been executing as planned.

Speaker Change: Progress are being made.

Speaker Change: And I think the focus will also be turn on the federal tests of these chips and we are in the process of lining up and also aligning our capacity and we expect to see our progress in the second half of the year in terms of.

Speaker Change: Penetrating into this very important market for us.

Joseph Tung: In terms of economics, I think tests, of course, as Ken mentioned, it has a higher margin. So it's a margin of creative business for us. And in terms of return, I think it has a very similar return to the leading-edge packaging on a financial point of standpoint. CapEx-wise, we will make the necessary investment.

Speaker Change: In terms of economics, I think tests of course as Kim mentioned it has a higher.

Speaker Change: Higher margin, so it's a margin accretive business for us.

Speaker Change: And in terms of return that they has the suit very similar returned to the leading edge of the packaging.

Speaker Change: On a financial point is simply Capex wise, we will make the necessary investments.

Joseph Tung: in our capex, not just on the equipment itself, but also on the facility that we need to put in to address this demand. Gokul does not answer your question. Yeah, that's pretty clear. Thanks, Ken.

Speaker Change: In our Capex not just on the equipment.

Speaker Change: Equipment is so bulls on the facility that we need to put in to address this a student demand.

Speaker Change: Goku does that answer your question.

Speaker Change: Yeah.

Speaker Change: That's pretty clear thanks again.

Gokul Hariharan: Maybe my second question is on your U.S. investments. Any plans there, given your partner, the large foundry has already announced two advanced packaging fabs in the U.S.? Also, one of your competitors seems to have gone ahead and invested a fair bit of capex in their U.S. fab, and they seem to be positioning themselves as a U.S. partner for your kind of large foundry partner. So, how do you think about U.S. investments from here on, given the environment seems to have changed a little bit? When does ASC need to start preparing for some U.S. capacity, especially for your LEAP, leading-edge advanced packaging portfolio?

Speaker Change: My second question is on your U S investments any plans there given yard.

Speaker Change: But not the large foundry has already announced two advanced editing apps in the US Are also one of your comp a good does seems to have gone ahead and invested a fair bit of capex in their U S fab and they seem to be positioning them both of the U S partner or your end of large foundry.

Speaker Change: We partner, though how do you think about our U S investments from get on given environment seems to have changed a little bit bend to the need to start providing for them U S capacity, especially body art leap.

Speaker Change: Eating a good months by picking a portfolio.

Joseph Tung: Okay, you're looking for a A summary or in terms of an overall framework for our view on the U.S. investment, right? Yes. I think we were invited by the customer to evaluate the possibility of having some operation to support their business in the United States. Currently, we are engaging in discussion and are evaluating the opportunities with interest. There are no further details so far in terms of the actual investment size or the timing of it. Any decision that we will eventually make will be made with economic viability. Is that going to be similar stuff to what you do in Taiwan right now?

Speaker Change: Broker Youre looking for a hmm a summary or in terms of an overall framework for our view on the U S investment grade.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: And I think we were invited by the customer.

Speaker Change: And two.

Speaker Change: Evaluate the possibility of having some operation to support their business in the United States.

Speaker Change: Currently we are engaging in discussion and are evaluating the opportunities with interest.

Speaker Change: There are no further details of so far.

Speaker Change: And in terms of the actual investment size or the timing of it.

Speaker Change: But any decision that we will eventually make will be made without economic viability.

Speaker Change: Okay.

Speaker Change: The event will be the Valletta stuff do what you do in Taiwan, right now or is it going to be like different maybe more advanced packaging technology compared to what do what are you investing in is just wanted to understand is it just geographic diversification not as like completely different products that you think would be invested in in the U S.

Joseph Tung: Or is it going to be like, different, maybe more advanced packaging technology compared to what you what you're investing in? Just just wanted to understand, is it just geographic diversification? Or is it like completely different products that you think would be invested in in the US? Well, I think it will be an extension of what we are offering here. But, you know, in terms of eventually what exactly that we will be doing or what kind of investment we will be making, it really depends on the the situation and also the economics of it. So I think at this point, we don't really have much detail to share with everybody, except the fact that we are being invited, and we are evaluating the situation here.

Speaker Change: Well I think it will be extension of what we are offering here bug you know in terms of eventually what exactly that will be doing or what kind of investment we will be making.

Speaker Change: It really depends on the situation and also the economics of it.

Speaker Change: So I think it did at this point, we don't really have much detail to share with everybody.

Speaker Change: Yes.

Speaker Change: Except the fact that we are being invited in.

Speaker Change: And we are evaluating the situation here.

Joseph Tung: Thank you.

Speaker Change: Got it. Thank you. Thank you.

Bruce Liu: Our next question is from Mr. Bruce Liu of Goldman Sachs.

Speaker Change: Our next question is from Mr. Bruce Lu of Goldman Sachs.

Bruce Liu: Okay, can you hear me? Hello, can you hear me? Okay, just one quick clarification from Gokul's question. Does your economic value in US when you do the evaluation, does geopolitical consider as one of the economic value? Not really. I think the, whatever, I'm sorry, Ken, you want to repeat the question? No, please go ahead.

Speaker Change: Okay coherent.

Bruce Lu: Oh, Yeah can you hear me Okay. Just one quick clarification on Cocos question does your economic value in U S. When you're doing the evaluation. This this this geopolitical consider as a one off the economic value.

Speaker Change: Not really I think the whatever.

Speaker Change: Sorry, Ken do you want to repeat the question now. Please go ahead.

Joseph Tung: Anyways, I think it's really, for our customers' requests, whatever we eventually will do is really offering our support to our customer and try to meet customers' demand in any way we can, provided that it's a feasible or economically feasible option for us. OK, thank you.

Speaker Change: Anyways I think is really a per our customers request.

Speaker Change: Whatever we eventually will do is reduce our offering of support to our customer and try to meet our customers.

Speaker Change: Demand in any way, we can provided that it's a feasible or economically feasible.

Speaker Change: Option for us.

Speaker Change: Okay. Thank you Bill for all my circumstance for the Europe again I go back go to air testing.

Bruce Liu: So my first question is for you. Again, I go back to the AI testing. You just mentioned that you are confident to win more than 50% market share in AI testing. Can you provide us some update in terms of your market share situation in different products, such as GPU versus ASIC, or final test versus oyster test, or burn-in, what kind? Do you see any disproportional market share, or where do you see the? your growth driver in this AI testing business?

Speaker Change: You guys mentioned that you are confident to win lightening up more than 50, some market share in a testing can you provide us some update.

Speaker Change: Oh in terms of your market share situation in different products, such as G. T. U verse this egg or in a final test versus Oh, Oh Oh.

Speaker Change: Ill ask wafer pass or bringing in or what do you see any disproportionate market share or where do you see the.

Speaker Change: Your gross driver in this AI test ambitious.

Speaker Change: Well.

Bruce Liu: So Bruce, you're looking for a summary in terms of our market position relative to GPUs or in total? Oh, I want to know like, you know, the market share in different products.

Speaker Change: So versus Youre looking for a summary in terms of our market position relative to gpus or in total.

Speaker Change: I wanted to know like now in the market share in different products.

Joseph Tung: I don't think we have a market share breakdown in between different products. I think the overall emphasis is really we want to expand our test business in whichever area I think that you see or more advanced or leading edge is across the board we're making efforts to penetrate this market further and we have been making a lot of progress not just on the AI chips but as an overall test basis which is being shown in the percentage of revenue as I said it has grown to 18% and we're going to reach 20% pretty soon and this effort will continue.

Speaker Change: I don't think we have a market share a breakdown in between different products I think the overall emphasis is really we wanted to.

Speaker Change: Expand our test business.

Speaker Change: In.

Whichever area, I think Doug Z or more events or leading edge is a across the board, we're making efforts to penetrate these market further and we have been making a lot of progress not just on the AI chips, but as the world turns business.

Speaker Change: Which is b is shown in the is it in the percentage of our revenue.

Speaker Change: As I said is it has grown to 18%.

Speaker Change: We're gonna reached 20% pretty soon.

Speaker Change: And the this effort will continue.

Joseph Tung: But in terms of AI chips, I think we're really the dominant player in terms of wafer sort and we're moving in very aggressively into final test as well. And we will see some results coming in, in the later part of the year. And we expect to grow this part of the business very aggressively next year as well. Does that answer your question, Bruce? Yes, thank you.

Speaker Change: But in terms of our AI chips, I think a world where really the dominant player in terms of wafer sort and we are moving in very aggressively into final tests as well.

Speaker Change: And we will see some results coming in in the later part of the year and we expect to grow this part of the business. We were aggressively next year as well.

Speaker Change: Does that answer your question Bruce.

Bruce Lu: Yes. Thank you.

Bruce Liu: So my second question, again, is for the long-term coworkers demand. There is a lot of noise about the coworkers demand. I do see some capacity planning of changes or fluctuation in TSMC.

Bruce Lu: So my second question again is for the long term a cola Steven you know Theres a lot of noise about the colas in med I always do see some capacity planning off changes all fluctuation in TSMC.

Bruce Lu: So you.

Bruce Liu: What does that change for your coworkers or similar related capacity expansion plan for later part of this year or in 2026? First, you're looking for a view on our leading edge advanced packaging roadmaps. In particular, our products are focused based product products. Is that correct? I want to make it clear that we do see the fluctuation in terms of the advanced packaging demand in, you know, one of your major partner in TSMC. And that have a secondary impact to your business or do you change any of your plans because of that? So far we haven't seen anything that's out of the ordinary.

Bruce Lu: What does that change for your cohorts or similar related capacity expansion plan for life in a native off this year or an eight or in 2026.

Bruce Lu: First you are looking for a review on a leading edge advanced packaging. Our roadmaps are in particular, our products are focused based prime products.

Bruce Lu: Correct.

Bruce Lu: I want to make it clear that we do see the fluctuation in terms of the events packaging demand in you know one of your major partner in TSMC.

Bruce Lu: Does that.

Bruce Lu: Have a secondary impact to your business or do you change any of your plan because of that.

Bruce Lu: So although we haven't seen anything that's all of the ordinary I think the things are going as planned and are.

Joseph Tung: I think the things are going as planned and in terms of a leading edge, I think we're still in in a catch-up mode in terms of building our capacity to meet the demand. And as our Foundry partner has mentioned, it has a long-term or five-year category of 45%. And we are also a true believer of the long-term prospect of this AI-related growth. And more importantly is that, you know, it's not just AI itself, but the AI-generated demand for other products as well as the AI adoption expands. So, you know, we're not gonna, we're gonna change our course in terms of making the necessary investment in time to meet this growing demand, not just on AI itself, but on the overall.

Bruce Lu: In terms of a leading edge I think we're still in the.

Bruce Lu: In a catch up mode in terms of building our capacity to meet that demand as our foundry partners mentioned it has a long term or a five year CAGR of 45, 5% and we are and.

Bruce Lu: And we are also a true believer of the long term prospect golf is a a related growth and more importantly is that you know.

Bruce Lu: It's not just AI itself, but the AI generated.

Bruce Lu: Demand for other products as well.

Bruce Lu: As the a S.

Bruce Lu: As the AI adoption expands.

Bruce Lu: So.

Speaker Change: No we're not going to we're going to change of course in terms of.

Bruce Lu: Making the necessary investment in time.

Speaker Change: To meet this growing demand and not just on AI itself well in the overall.

Bruce Liu: So right now, we're not seeing any major behavioral changes among our customers. And therefore, for this year, we're not making any changes. I don't think anything structural, any structural changes is warranted at this point. So we will just go ahead with whatever we set out to do and, you know, believe that there's gonna be short-term uncertainties or fluctuations, but the longer-term direction remains the same. And we're making all our investments according to that. Does that answer your question, Bruce? Yes. Thank you.

Speaker Change: So right now we're not seeing any major behavioral changes among our customers.

Speaker Change: And therefore the for this year.

Speaker Change: We are not making any changes I don't think anything structurally any structural changes is warranted at this point. So we will just go here with a whatever we set out to do and.

Speaker Change: Leave that.

Speaker Change: Uh huh.

Speaker Change: So there's going to be short term uncertainties will fluctuations for the longer term direction is it remains the same.

Speaker Change: And we'll.

Speaker Change: We're making the or our investments according to that.

Speaker Change: Does that answer your question Bruce Yes. Thank you.

Operator: All right. Thank you.

Speaker Change: Thank you.

Charlie Chan: Next question is from Charlie Chan of Morgan Stanley. Hello. Good afternoon, Joseph and Ken. Also, thanks for taking my question. So first of all, I wanted to know your CDIC technology development. I think the similar technology at your foundry power is the SOIC. So I'm not sure when the chip migrates to 2 nanometer whether you are receiving more business opportunity for the CDIC packaging. And can we get a sense of all your investments and potential revenue contribution next year?

Speaker Change: Next question is from Charlie Chan of Morgan Stanley.

Charlie Chan: Hello, Good afternoon, Joe.

Speaker Change: Joseph N and I can oh, so iris thanks for taking my question.

Charlie Chan: So first of all.

Speaker Change: I wanted to know your C D I b.

Speaker Change: Takeout still development of deemed a similar take hijacked your funds economy, it's all I see.

Speaker Change: So I'm not sure where the chip migrate to 10 nanometer where whether you're.

We're receiving more pieces.

Speaker Change: Pieces of a charity.

Speaker Change: A C D E packaging and can.

Speaker Change: Can we get a sense if all your investment in potential revenue contribution.

Speaker Change: Next year.

Charlie Chan: Charlie, you're looking for a update in terms of our overall positioning within the 3DIC framework, right? Yeah, because one of the very big us customer recently high profile took about the two nanometer chip at your Foundry partner. So we heard that the packaging could could could leverage some 3D IC technology, right? So wondering whether you you can see this opportunity and also how big the revenue contribution could be?

Charlie Chan: Charlie you are looking for a update in terms of our overall positioning.

Speaker Change: Within the three D I C framework right.

Yeah, because one of the Big U S. A.

Speaker Change: There is a high profile took it all at the two nanometer.

Speaker Change: Too bad to.

Speaker Change: Got you a foundry partner.

Speaker Change: So we heard that the.

Speaker Change: The packaging could could leverage some C. D E technology right. So wondering what are you you can see sees opportunity and also how big E.

Speaker Change: Route clearing contribution could be.

Speaker Change:

Joseph Tung: We really don't have much of a clarity in terms of when and how these new packages will come on stream and what kind of volume we can expect, you know, maybe next year and onwards. What we can do is, not just on 3DIC, I think a lot of the advanced technology that's now in play, including 3DIC, including CPO, including panel, I think we all... You know putting a lot of resources in this as you can see our R&D investment has been increasing year over year. You know, not just on COOS itself, but also on these upcoming technologies.

Speaker Change: But we really don't have much of a clarity in terms of when and how this new packages will come on stream and what kind of volume. We can expect a meal maybe next year onwards.

Speaker Change: Oh, well, we can do is not just on a through D. I see I think a lot of via this technology that's a.

Speaker Change: Now in play, including a three D IC, including C. P O, including a panel I think.

Speaker Change: We all are.

Speaker Change: You know, we're putting a lot of resources in this as you can see our R&D.

Speaker Change: That investment has been increasing year over year.

Speaker Change: No not just on colas itself, but also on the on disk upcoming technology, we need to prepare ourselves we are forming a very strong alliance with different parties.

Joseph Tung: We need to prepare ourselves, and we are forming a very strong alliance with different parties. Also engaging, very active engagement with our foundry partner, as well as our customers to ready ourselves for these technologies when they come on stream. So, our strategy is really to prepare ourselves, and when the volume comes, we'll be ready. Okay, thank you.

Speaker Change: So engaging.

Speaker Change: Very active engagement with a foundry partner as far as our customers are to.

Speaker Change: To ready ourselves for these technology when they come on stream. So our strategy is really to put the prepare ourselves and when the volume comps will be ready.

Joseph Tung: Okay. Thank you thanks Joseph.

Charlie Chan: Thanks, Joseph.

Charlie Chan: And if I may ask a second one, it'd be a common tariff question. So beforehand, do you see any kind of point given tariff? And also, do you see second half could be, you know, very, very moderate risk given kind of pulling in first half already, resulting in very sluggish second half growth. Charlie, you're looking for a view on the tariff impact on us, and then how that reflects various timelines in our business, right? Is that correct? Indeed, indeed. Yeah, because your Foundry partners kind of said, there's no behavior change. But two of them all guided very, very strong second quarter.

Speaker Change: And if I may ask a second one b.

Joseph Tung: Comma and tariff question ISO.

Joseph Tung: Beforehand, do you see any kind of point given tariffs and also.

Joseph Tung: Do you see second half could be.

Joseph Tung: You know very very monitor risk event.

Joseph Tung: A kind of a point.

Joseph Tung: In.

Joseph Tung: First our efforts have already resulted in very flattish second half growth.

Joseph Tung:

Charlie you are looking for a view on the tariff impact on us and then.

Joseph Tung: How that flex that.

Joseph Tung: Various timelines in our business right is that correct. Indeed, indeed, yeah, because your foundry.

Joseph Tung: Punish a.

Kind of a good fit theres no behavior change.

Joseph Tung: But the two O then okay. It is very very strong second quarter.

Charlie Chan: and very kind of implying very slow second half. So I'm wondering, because backend is even closer to customers, right? So we're looking for your view.

Joseph Tung: Very kind of implying very slow as it can have.

Speaker Change: I'm wondering because a bank and he's even.

Joseph Tung: Closer to Kosmos right, so where.

Joseph Tung: Looking for European.

Joseph Tung: Oh yes, we do have a pretty strong second quarter and that's I think something that we can We still have high confidence on that, but when it comes to second half, I mean I really, I wish I have a better answer, but I really don't have a bigger crystal ball than you do, so you know ASE Tech Hold How do we mitigate this risk? I think the first thing is to really understand what the risk is. That's more settled. I think it's very, very difficult for us to make any prediction. Whatever prediction I make, it's going to be a wrong one at this point.

Joseph Tung: Oh, Yes, we are we do have a pretty strong second quarter and that's the things something that we can.

Joseph Tung: Are we still have high confidence on that but when it comes to second half I mean.

I really I wish I have a better answer, but I really don't have a bigger of crystal bolting Youtube.

Joseph Tung: So you know.

Joseph Tung: How do we mitigate this risk I think the first thing is to really understand what the risk is.

Joseph Tung:

Joseph Tung: Does this more settled I think is very very difficult for us to make any prediction whatever prediction I make is going to be a wrong. One at this point.

Gunnar: So gunnar.

Joseph Tung: from making any real. comments on Substance for second half. Mm-hmm. Yeah, but just one ask is that do you see kind of point or is just some market speculation and customers, they just operate as usual? Well, I think it's, it's, it's, it's very normal or reasonable to have, there will be some pull-in in the doing this first half. But in terms of, like Kenneth is trying to explain, there's limitations in terms of capacity and readiness to entertain all these supposed to be put in demand. So it's very, very difficult for us to quantify how much of our growth is really coming from pulling in.

Joseph Tung: Yes.

Joseph Tung: From making any real cause.

Joseph Tung: Commerce of substance for second half.

Joseph Tung: Yeah bad but.

Joseph Tung: Just a.

Joseph Tung: <unk> said that do you see kind of a point or is it just a sound.

Joseph Tung: Market speculation and Cosmos.

Joseph Tung: The jazz to operate as usual.

Joseph Tung: Well. The thing is is is is.

Joseph Tung: It's very normal or a reasonable doubt there will be some pull in.

Joseph Tung: During the during this first half.

Joseph Tung: But in terms of like Kenneth trying to explain Ah theres still some limitations in terms of capacity and our readiness to entertain all these.

Joseph Tung: Supposed to be put in demand.

So it's very difficult for us to quantify how much of the growth.

Joseph Tung: <unk> is really coming from pulling in and there are some there are also factors affecting the quarter's performances, including.

Joseph Tung: And there are also factors affecting the quarter's performances, including, you know, we are being put on the white list. So there will be some business shifting to us. Right, right. because of that. So it's a combination of a lot of things. But as we said earlier, you know, at this point, aside from this sporadic pull-ins, we're not seeing any major behavioral changes or forecast from our customers at this point. So I think the best thing we can do is really to stay on course and just do whatever we set out to do for the year.

Joseph Tung: You know we are being put on the wireless so there will be some business shifting to us.

Joseph Tung: Right right.

Joseph Tung: Because of that so it's a combination of a lot of things.

Joseph Tung: But as a as we said the earlier you know at this point aside from this a mirror sporadic billions, we're not seen any major.

Joseph Tung: Behavioral changes or forecast from our customers at this point.

Joseph Tung: So I think the best thing we can do is reduces stay on course.

Joseph Tung: And just do whatever we set out to do for the year and you know as stay nimble and responsive to whatever changes that are coming are ahead of us.

Joseph Tung: And, you know, stay nimble and responsive to whatever changes that's coming ahead of us.

Joseph Tung: Thank you, this is super helpful. Thank you.

Joseph Tung: Thank you.

Joseph Tung: This is super helpful. Thank you.

Sunny Lin: Next question is from Sunny Lin of UVS. Sunny. Hi, could you hear me? Yes. Thank you very much. So my first question is on EMS. So if I calculate correctly, your guidance basically implies your Q2 EMS sales could drop sequentially. I know earlier you mentioned there is some earlier seasonality for bill in Q1 given the pull-in for tariff. But could you share a bit more color on why there is a pull-in in Q1, but for Q2 now there is a 90-day delay? But we have started to see orders maybe dropping off in Q2 already. So Sunny, your question relates to Our view on what is causing the movement in terms of our Q2 revenues.

Joseph Tung: Next question is from Sunny Lin of UBS.

Joseph Tung: Semi.

Joseph Tung: Hi could you hear me.

Joseph Tung: Yes.

Speaker Change: Thank you very much. So my first question is on E. M S.

Speaker Change: So if I calculate correctly at your guidance basically imply youre quite M. S cells could drop sequentially I know earlier, you mentioned are there.

Speaker Change: L. A is seasonality for appeal in Q1, given the POI for tariffs, but could you shed more color on why there is a point Q1 before Q2 now there is a 90 day delay.

Speaker Change: But we have started to see owners may be dropping off in Q2 already.

Speaker Change: So sunny your question relates to Oh [noise].

Speaker Change: Our our view on what is what is causing the movement in terms of our Q2 revenues not correct.

Sunny Lin: Is that correct? That's right. I think the pattern is a typical seasonality pattern. Second quarter is always the slowest border for us in terms of EMS. What Ken mentioned earlier on is that for the first half, when we were entering these down quarters, this time around the dip is a bit shallower than before or than previous years because of some of the pull-ins that's been happening in not just first quarter but also second quarter. But still, second quarter is the lowest quarter for us. Got it. And a quick follow up for EMS. Last year, your largest customer had earlier view for the new product.

Speaker Change: Yeah.

Speaker Change: I think the the pattern is a is a you know a typical seasonality.

Speaker Change: Pattern.

Speaker Change: Second quarter is always the slowest.

Speaker Change: Slowest quarter for us in terms of E M S.

Speaker Change: I can mention earlier on is that for the first half when we were entering this down quarters.

Speaker Change: This time around the dip is a.

Speaker Change: This shallower than before oh than previous years because of some of the port ins that's been happening in not just the first quarter goes over the second quarter.

Speaker Change: But it's still a second quarter is the dongle is the lowest quarter for us.

Speaker Change: Got it and a quick follow up for your mass.

Speaker Change: Last year, your largest customer hat Elliot bill for their new products.

Sunny Lin: So now based on your Q2 guidance, there's no earlier view for this year, right?

Speaker Change: So now based on your Q2 guidance Ah Theres no Elliott before the <expletive> right.

Speaker Change: Okay.

Joseph Tung: I can summarize your question, but I can pretty much answer it for you at this point. I don't think we can really comment on that customer per se.

Speaker Change: I can summarize your question, but I can pay for pretty much answered for you at this point I don't think we can really comment on on that customer per se do.

Sunny Lin: Do you have a different question to ask? Yeah, no problem. So maybe switching gear to your profitability in KPACs, I recall maybe two quarters ago, you mentioned that for 2025, as you start to wrap more sales from advanced packaging, the second half growth margin should be higher than first half. Although now I understand there's some macro uncertainty for second half, but does that growth margin guidance still hold? And then for your KPACs, you spent quite a bit in Q1. And so for 2025, full year, are you still getting $2.5 to $2.6 billion KPAC for full year, or should we expect a higher KPAC?

Speaker Change: Do you have a different question to ask.

Speaker Change: Yeah no problem so.

Speaker Change: Maybe switching gear to your profitability.

Speaker Change: K packs.

Speaker Change: I recall, maybe talk quarters ago, you mentioned that for 2020 five as you start to ramp boy itself from other packaging the second half gross margins should be higher than first half.

Speaker Change: Although now I understand there are some macro uncertainty for second half does that gross margin guide is still Ho and therefore your K Pax you spent quite a bad in Q1 and sell for 2025 full year Ah I you still got a 2.5 to $2 6 million K powerful yet or should we buy at the higher capex.

Joseph Tung: And you're asking for our seasonal outlook in terms of how we would normally expect a peak seasonal gross margin level, right, especially pertaining to our leading edge advanced packaging. Ramps. Is that correct? Yeah, so basically, directionally, all growth margin trend up in second half with higher advanced packaging contribution and also KPAC guidance for 2025. As I said, you know, we're not making any changes for the year's projection at this point, and That's on the revenue as well as on CapEx for the year. And, you know, I think in terms of progress that we're making, I think we're, we're a bit of a...

Speaker Change: So now you're asking for or seasonal outlook in terms of how we would normally expect a peak seasonal gross.

Speaker Change: Gross margin level, right, especially pertaining to our our leading edge advanced packaging.

Speaker Change: Ramps is that correct.

Speaker Change: Yeah, so basically to rationally.

Speaker Change: All growth margin trend up in second half with higher packaging contribution and also capex guidance like 2025.

Speaker Change: As I said, Oh, we're not making any changes for the years.

Speaker Change: Hum.

Speaker Change: Projection at this point.

Speaker Change: And.

Speaker Change: That's all on the revenue as well as one on Capex for the year.

Speaker Change: And you know I think in terms of progress that we're making I think where we're a bit of the.

Joseph Tung: You know, moving on, we'll Our performance is a bit ahead of what we were originally expecting in terms of second quarter. I think the overall utilization will be around 70% and will reach the 70% hurdle threshold earlier than what we were expecting, and as such, we were saying that our The second half, our margin will get back into the structural margin range, but that seems to be happening earlier. We will start seeing that starting from the second quarter. And for the whole year, I think we will also be meeting our target in putting our margin back into the structural range.

Neil: Neil moving on a whim.

Neil: Our performance is a bit ahead of origin or you're expecting in terms of second quarter.

Neil: I think the overall utilization will be.

Neil: Around 70%.

Neil: And when we will reach the 70% hurdle.

Neil: A threat to our earlier tenable, we were expecting.

Neil: And as such the.

Neil: We were saying that you are.

Neil: Second how will our margin will.

Neil: We'll pick up adding to the structural margin range, but that seems to be happening earlier.

Neil: We will start seeing that are the.

Neil: So from second quarter.

Neil: And for the whole year ethane, we will also be meeting our target in putting our margin back into the structural range.

Joseph Tung: Second half. short of any major surprises, I think our margin will go back to the midpoint of our structural margin level. I think that remains unchanged. That it. Thank you very much.

Neil: Second our second half.

Neil: Short of any major surprises I think our margin will are going to go back to the mid point of our structural margin level I think that remains unchanged.

Neil: Got it thank you very much.

Laura Chen: Next question is from Laura Chen of Citigroup. Hello, hi, can you hear me? Yes, hi. Thank you for taking my questions. I recall the last time we talked about like 1.6 billion leading edge advanced packaging revenue for this year. Just wondering that based on Q1, our achievement, and also the Q2 outlook, what kind of achievement we already have right now? We know that from our Foundry partner, they have technology migration, say like from the COAS-S to COAS-R or L. So will that have any implication to our advanced packaging revenue ramping up? That's my first question.

Speaker Change: Next question is from.

Speaker Change: Alright channel Citigroup.

Speaker Change: Oh, Hi, good afternoon can you hear me.

Speaker Change: Yes.

Yes, hi, Thank you for taking my question is on I recall. The last time, we took about <unk>. One 6 billion is a leading age advanced packaging revenue for the year I'm just wondering that based on our Q1, our shipment and also the Q2 outlook, what's kind of bar that shift remember we already have.

Speaker Change: Right now as we know that sung our foundry partner they have a technology migration and say like is bound to cause as to cause our or al So whether that has any impact.

Speaker Change: Implication to our advanced packaging revenue lending knob now.

Speaker Change: That's my first question.

Laura Chen: Or you're asking for an update in terms of in terms of our Leading Edge Advanced Package. revenue. Yes, yes, yes, thank you.

Speaker Change: Or you're you're asking for an update in terms of in terms of our leading edge advanced packaging in terms of the revenue and then.

Speaker Change: The shape of the ramp at this point, yes, yes, yes. Thank you.

Joseph Tung: There's really no change at this point. I think we are moving ahead with our original plan, both on the overall as well as on the leading edge. We are making the necessary investments. We are not cutting our capex at this point, and we are set out to reach our revenue target on leading edge as well for the year. In terms of different types of co-ops, I think we have our capacity ready for you know, whatever the the package type that's that's needed, we will have the we will have our capacity aligned for that.

Speaker Change: Theres really no change at this point.

Speaker Change: I think we are where we are moving ahead with all of them.

Speaker Change: Original plan.

Speaker Change: Both on the on the overall and as whereas on the leading edge.

Speaker Change: We are making the necessary investments.

Speaker Change: We are now cutting our capex at this point.

Speaker Change: And we are set out to do to reach our revenue target of our leading edge as well for the year.

Speaker Change: Sure.

Speaker Change: Different.

Speaker Change: Types of coal was a thing.

Speaker Change: Yes.

Speaker Change: Apache ready for.

Speaker Change: No whatever the.

Speaker Change: The package type that's that's needed we will have the.

Speaker Change: We will have our capacity online for them.

Joseph Tung: OK, thank you, very clear. And also, my second question, again, is related to the testing. We know that we have set the objective, the target, to round up the internal testing revenue contribution. But just wondering that for furthermore upside, can we assume that it's mostly coming from the GPU or AI accelerator, or it's also including in some of the other application, like a smartphone? or you're asking about. who we're targeting in terms of expanding. Right. Yes. And also, I'm just wondering that, can it also counted into our like a leading some of our like a leading age advanced packaging revenue or is separate?

Speaker Change: Okay. Thank you very clear.

Speaker Change: And also my second question again is related to the testing.

Speaker Change: I will now that do we have Sydney objective the targeted to render them. The internal testing my revenue contribution, but just wondering that deferral. Furthermore, outside can we I assuming that is mostly coming finally, a GPU or an accelerator or is also including some.

Speaker Change: Of the other application like a smartphone.

Speaker Change: Are you're asking about.

Speaker Change: Who we're targeting in terms of expanding our overall task now correct right yes.

Speaker Change: And then also I'm just wondering that Ken it also counted into our light and leading some of our leading age advanced packaging revenue or is separate.

Joseph Tung: because as we know that sometimes it's more like a turnkey total service for the whole OSA process. I think it's an all out effort, trying to grab as much market share as possible throughout the whole test arena. Of course, there's going to be extra effort on the AI or the leading edge tests. And, you know, necessary investment will be made and, you know. We have strong confidence that we will be making a lot of progress going forward. Things will start happening, particularly on the final test of it. Maybe got a lot of headway starting the second half of the year.

Speaker Change: Because as we know that sometimes is more like a turnkey totals service for the whole Ocean transit.

Speaker Change: Yeah.

Speaker Change: I think it's an all out effort trying to grab as much market share as possible throughout the whole test arena.

Speaker Change: Yield of course, theres going to be a extra effort on the AI or the leading edge test.

Speaker Change: And you know necessary investment will be made.

Speaker Change: And Oh no.

Speaker Change: We have strong confidence that we will be making a lot of progress going forward.

Speaker Change: You know things will start happening, particularly on the vinyl tests of it are we will have.

Speaker Change: Maybe we get a lot of her with signs of a second half of the year.

Joseph Tung: We're in the process of, you know... preparing our capacity and also going through qualification and so on and so forth. So we're expecting business to start coming in in the second half of the year. It's a it's an all-initiative. And we I think if you have to make a comparison. I think what we're trying to do is not just leveraging on our turnkey capability as much as possible to get the test business part of it, but also we will be putting a lot of effort in getting the pure test business as well.

Speaker Change: We're in the process of floor Neil.

Speaker Change: Preparing on capacity and also going through qualification and so on and so forth. So we're expecting our business to start coming in in the second half of the year.

It's a it's an O O initiative.

Speaker Change: Now, we I think if you have to.

Speaker Change: Make a comparison I think what we're trying to do is not just.

Speaker Change: Leveraging on our turnkey capability as much as possible to get the.

Speaker Change: The test business part of it but also we will be putting a lot of effort in getting the pure test business as well.

Joseph Tung: Okay, thank you. That's very clear.

Speaker Change: Okay. Thank you that's very clear.

Speaker Change: Yes.

Brad Lin: We have a question from Brad Lin of BOA. Thank you for taking my question.

Speaker Change: We have a question from Brent Lane of BLA.

Speaker Change: Okay.

Brent Lane: Thank you for taking my question, Hi, Hello godmother to.

Brad Lin: Hello, good afternoon, Joseph and Ken. I have two questions. My first question would be mainly related to tariffs. So if the new tariffs are really to be implemented, particularly on the semiconductors, does ASE expect to absorb part of the additional cost? And also, given that a significant portion of your EMS manufacturing is currently in China, what strategies are in place to reduce the potential tariff exposure? Thank you. Hi Brad, your first question relates to... Tariff and the cost of whether we're going to be absorbing any costs and then also how our EMS. would react in such a way.

Brent Lane: And can I have two questions. My first question would be are mainly related to tariff. So if the new tariff are really to be implemented, particularly R&D semiconductors.

Brent Lane: With respect to absorb part of the additional cost and also a key event data I think in Eva can portion of U S. Manufacturing is currently in China. Our strategies are in place to reduce the potential tariff the tariff exposure. Thank you.

Speaker Change: I've read your first question relates to the.

Speaker Change: The tariff and the cost of whether we're going to be absorbing any costs and then also how our EMS business.

Speaker Change: Would react in such situations correct exactly thank you Ken.

Joseph Tung: Exactly. Thank you, Ken. I don't know how much we need to absorb, but I do know adjusting our prices is not the solution to the terrorist problem. So I don't think that's really an option. In terms of our... I think most of the direct exposure to the U.S. is very, very minimum from a group perspective. I think only less than 10% of our EMS business shipment is going directly to the U.S. and that can be managed through moving some of the parts to other locations that we have. In terms of ATEM, we have really very, very minimum direct shipment to the U.S.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: I don't know how much do we need to absorb.

Speaker Change: I do know all adjusting our prices is not the solution to that terrorists problem.

Speaker Change: So I don't think that's really an option.

Speaker Change: In terms of our I think most of the direct.

Speaker Change: Exposure to the U S.

Speaker Change: It's very minimum from a group perspective, athene only less than 10% of our EMS business is shipment is going theoretically to the U S and that can be managed.

Speaker Change: Through moving some of the parts to other locations that we have in terms of ATM will have really very very minimum a direct shipment to the U S. So whatever that a tariff will be at the.

Joseph Tung: So whatever the tariff will be, I think right now it's very, very difficult to to estimate what kind of an impact it will have on the overall. All I can say is, if there is an impact, it's going to impact our competitors a lot more than we do. Got it, got it.

Speaker Change: Right now, it's very very difficult to to.

Speaker Change: To estimate what kind of an impact it will have on the overall Oh I can say is if there is a impact is going to impact our competitors a lot more than we do.

Speaker Change: Got it got it and my second question would be well the switch gear to the well it's in a row, while demand after industry, such as a kitchen electronics industrial and automotive and do you anticipate a recovery, particularly in the industrial and auto segments.

Brad Lin: My second question would be, well, switch gear to the, well, general demand of the industry, such as consumer electronics, industrial and automotive. And do you anticipate a recovery, particularly in the industrial and auto segments in the second half of the year? And also compared to, well, three months ago, are we more optimistic or less optimistic on the consumer electronics? Thank you. Brad, your question relates to our view of the overall general demand. Including Automotive. Yes, thank you. I think it's a general consensus that, you know, other than maybe automotive... The other sectors are school, for graduate recovering.

Speaker Change: Half of the year and OSA compare to wealthy Monica ago are we more optimistic or less optimistic on the country of electronic thank you.

Speaker Change: Brian Your question relates to our view of the overall general demand of electronics, including automotive and consumer related products that correct, yes.

Speaker Change: Thank you.

Speaker Change: I think there's a general consensus that you know other than.

Speaker Change: Maybe automotive a.

Speaker Change: The other sectors are.

Speaker Change: Gradually recovering.

Joseph Tung: In terms of automotive, I think on the high-end automotives... actually is. having a much better momentum at this point. But the legacy, the MCUs and the lower end stuff is still going through some level of inventory correction at this point. Um, so from our own business portfolio perspective, I think automotive, we will see growth in this area for this year. Got it. Thank you very much.

Speaker Change: In terms of automotive I think on the high end automotive chips are actually as a having a much better momentum at this point, but the legacy the M to use in the near the low end lower end of your stool.

Speaker Change: Going through some of some level of inventory correction at this point.

Speaker Change: So from our own a business portfolio perspective, I think automotive Walker, we will see growth in this area for this year as well.

Speaker Change: Got it thank you very much.

Operator: If you have any questions, please raise your hand.

Speaker Change: If you have any question please raise your hand.

Jason Tsang: Our next question is from Jason Tsang. of Seal Security. Hello, can you hear me? Yes. Hello. Thank you for taking my questions. I want to follow up the EMS questions in terms of your Q2's revenue.

Speaker Change: Our next question is from Jason thing.

Speaker Change: Of CLC clarity.

Jason: Hello can you hear me.

Speaker Change: Yes, though.

Speaker Change: Thank you for taking my questions.

Speaker Change: Want to follow up the E. M. S questions I saw your Q2's revenue.

Jason Tsang: Can you give us more color in terms of each of different sectors, revenue, outlook, or guidance in Q2? Which sector do you expect probably can have a sequential growth, or all the sector will drop in Q2? Jason, you're looking for characterization in terms of Market Segment. Related to our Q2 revenues, right? Is that correct? Yeah, yeah, yeah. I think this is a very difficult question to answer because, um... I can't answer this without... link in this to a particular customer.

Speaker Change: Can you give us more color in terms of each of different sectors.

Revenue outlook or.

Speaker Change: Our guidance in Q2.

Speaker Change: Which sector do you expand that probably can have a sequential growth or.

Speaker Change: Or or the sector will drop in Q2. Thank you.

Yes, and you are looking for a.

Speaker Change: Characterization in terms of.

Speaker Change: Market segment.

Speaker Change: Really up to our Q2 revenues right is that correct yeah, yeah yeah.

Speaker Change: Okay.

Speaker Change: And just a SEC.

Speaker Change: I think this is a very difficult question to answer because.

Speaker Change: Yeah.

Speaker Change: I can't answer this with L. A.

Speaker Change: Lincoln does to a particular customer.

Jason Tsang: So I think I'm going to refrain from that. OK, got it. So what kind of sector do you expect probably can demand, or shipment, or revenue can better than other segment in Q2? Or which sector do you expect is probably worse than? other sector or your expectation in Q2.

Speaker Change: So I think I'm going to refrain.

Speaker Change: Okay got it so what probably is what kind of sector do you expect probably kim demand or humans, where revenue Kim.

Speaker Change: Better.

Speaker Change: Then other segment in Q2, or which sector do you expect or at worst in.

Speaker Change: Ah the sector or your expectation in Q2.

Joseph Tung: I think in terms of our EMS business, given that it is the second quarter, and it's usually the seasonally down quarter, it's probably not a really fair In terms of trying to figure out what, you know, what products are ramping or what product These the current the current movements in these types of products tend more to be about The situation or the or at the point at which they're in their manufacturing I don't know if it's particularly meaningful. to have that. Got it, got it.

Speaker Change: I think in terms of our EMS business.

Speaker Change: Given that it is the second quarter, and it's usually the seasonally down quarter.

Really not a really fair assessment.

Speaker Change: And in terms of trying to figure out what you know what products are ramping of what products are not.

Speaker Change: These the current the current movements in these types of products tend more to be about.

Speaker Change: The situation or the or at the point at which they are in their manufacturing cycle. So I don't know, if it's particularly meaningful to.

Speaker Change: To have that discussion at this time.

Speaker Change: Got it got it.

Jason Tsang: So my second question is in terms of your new technology plan in the future. I think yesterday, Powertech suggests that they are working with HPC or AI clients with two nanometers for their panel-level packaging. So I wonder if you have any plans or timeline for mass production stage for panel-level packagings for more high-end or advanced applications? Or also, can you give us some of the timeline for silicon photonic, something like that? Thank you. Jason, you're looking to understand what our explosive growth plan A Leading Edge Technology. Yeah, yeah, including panel-level packaging or silicon photonic. Well, I can't speak for our competitors.

Speaker Change: So my second question is in terms of your new technology, our plan in the future I think yesterday Powertech suggests that they are a co working with Ah Ah Ah.

Speaker Change: H P C or AI clients with two now meters for their panel.

Speaker Change: Panel level packaging. So wondering if you have any plans on.

Speaker Change: Or or timeline for mass production stage for panel level packaging.

Speaker Change: Sure.

Speaker Change: More high end or at events applications or or also can you give us some timeline for slated silicon photonic side.

Speaker Change: Something like that thank you.

Speaker Change: But Jason you're you're looking to understand what our explosive growth plans are for <unk>.

Speaker Change: Leading edge technologies is that correct.

Speaker Change: Yeah, yeah, including a panel level packaging or or silicon photonic.

Speaker Change: Well I can't speak for our competitors.

Joseph Tung: Apparently, the, um... that they are. I think they made a pretty aggressive statement yesterday.

Apparently the.

Speaker Change: Uh huh.

Speaker Change: That they are.

Speaker Change: I think they made a pretty aggressive statement yesterday.

Joseph Tung: But in terms of our own panel, I think we're in the process of establishing and aligning a pilot line for the customer qualifications scheduled in the in 2020, later part of 2025 and 26. And, you know, adoption, actual adoption and timeline will be dependent on customers, you know, so We have been investing in this for a very, very long period of time and we're very happy that our Foundry partner is also You know, getting into this and setting the pace for setting the standard for the industry or for this particular technology. So we are. on schedule.

Speaker Change: But in terms of our own.

Speaker Change: Panel I think the we're in the process of establishing and aligning our pilot line for the customer qualification.

Speaker Change: Patients scheduled in the.

In 2020.

Speaker Change: The later part of 2025 and 26.

Speaker Change: And you know adoption actual adoption in timeline will be dependent on customers.

Speaker Change: So.

Speaker Change: We have been we have been investing in this for a very very long period of time, and we're very happy that all.

Speaker Change: Our foundry partner is also.

Uh huh.

Speaker Change: You'll get introduced in setting the pace for for setting the standard for the for the industry were offered for this particular technology. So we are.

Jason Tsang: And we're taking one step at a time to make sure that whatever solution or offering that we come up with is what the market needs. Does that answer your question, Jason? Yeah, understood. Thank you very much. I have no more questions. Back to Q. Thank you. There is no question from the floor.

Speaker Change: On schedule.

Speaker Change: And we're taking one step at a time to make sure that whatever our solution offering that we come up with is the disease with D O what what the market needs.

Speaker Change: Does that answer your question Jason.

Speaker Change: Yeah understood. Thank you very much having no more questions I'd like to queue. Thank you.

Speaker Change: There is no question from the floor.

Operator: Okay, I think that's a wrap for the quarter. Thank you for attending our call. See you next time. Goodbye.

Speaker Change: Okay, I think that that's a wrap for for the quarter. Thank you for attending our call and see you next time.

Speaker Change: Goodbye.