Q2 2026 Chunghwa Telecom Co Ltd Earnings Call

August 5, 2026

Speaker #1: Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom's conference call for the company's second quarter 2026 operating results. During the presentation, all lines will be in listen-only mode.

Operator: Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom conference call for the company's Q2 2026 operating results. During the presentation, all lines will be on listen-only mode, and when the briefing is finished, directions for submitting your questions will be given in the question-and-answer session. For your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website, www.cht.com.tw/ir under the IR Calendar section. Now I would like to turn it over to Ms. Angela Tsai, the Vice President of Finance. Thank you. Ms. Tsai, please go ahead.

Operator: Good afternoon, ladies and gentlemen. Welcome to Chunghwa Telecom Conference Call for the company's Q2 2026 operating results. During the presentation, all lines will be on listen-only mode, and when the briefing is finished, directions for submitting your questions will be given in the question-and-answer session. For your information, this conference call is now being broadcast live over the internet. Webcast replay will be available within an hour after the conference is finished. Please visit CHT IR website, www.cht.com.tw/ir under the IR Calendar section. Now I would like to turn it over to Ms. Angela Tsai, the Vice President of Finance. Thank you. Ms. Tsai, please go ahead.

Speaker #1: And when the briefing is finished, directions for submitting your questions will be given during the question-and-answer session. For your information, this conference call is now being broadcast live over the internet.

Speaker #1: A webcast replay will be available within an hour after the conference is finished. Please visit the Chunghwa Telecom website at www.cht.com.tw/ir under the IR Calendar section. And now, I would like to turn it over to Ms. Angela Tsai, the Vice President of Finance.

Speaker #1: Thank you. Ms. Tsai, please go ahead.

Speaker #2: Thank you. Angela Tsai, Vice President of Finance at Chunghwa Telecom. Welcome to the second quarter 2026 earnings results conference call. Joining me on the call today are Chunghwa's President Long Xilin and our Chief Financial Officer, Oji Xu.

Angela Tsai: Thank you. I'm Angela Tsai, Vice President of Finance at Chunghwa Telecom. Welcome to Q2 2026 earnings result conference call. Joining me on the call today are Chunghwa's President, Lung Shih-Lin, and our Chief Financial Officer, Yu-Jie Hsu. During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our Q2 business results. This will be followed by a discussion of our segment performance and the financial highlights. We will then open the floor for questions-and-answers. Please turn to slide two to review our disclaimers and forward-looking statement disclosures. Without further delay, I will turn the call over to President. President Lin, please go ahead.

Speaker #2: During today's call, management will begin by sharing our recent strategic achievements and providing an overview of our second quarter business results. This will be followed by a discussion of our segment performance and the financial highlights.

Speaker #2: We will now open the floor for questions and answers. Please turn to slide 2 to review our disclaimers and forward-looking statement disclosures. Now, without further delay, I will turn the call over to President Lin. Please go ahead.

Speaker #3: Thank you, Angela, and hello everyone. Welcome to our second quarter 2026 results conference call. We are excited to announce robust second quarter and first half results, with revenue, operating income, net income, and EPS all exceeding the high ends of our guidance. Notably, total revenue for the second quarter climbed to its highest for any second quarter since 2010.

Lung Shih-Lin: Thank you, Angela. Hello everyone. Welcome to our Q2 2026 results conference call. We are excited to announce robust Q2 and H1 results with revenue, operating income, net income, and EPS all exceeded the high ends of our guidance. Notably, total revenue for the Q2 climbed to its highest for any Q2 since 2010, driven by the solid business growth. In addition, our ICT revenue reached its highest Q2 level since 2021. Based on our outperformance in the H1, we are confident in achieving our full year performance targets. In 2026, we continue to invest in AI and see concrete results. In the morning today, we announced the kickoff of the operation of our newly built AI data center in Lunping, Taoyuan, which is expected to add up to 36MW to our total IDC capacity upon full build-out.

Rong-Shy Lin: Thank you, Angela. Hello everyone. Welcome to our Q2 2026 results conference call. We are excited to announce robust Q2 and H1 results with revenue, operating income, net income, and EPS all exceeded the high ends of our guidance. Notably, total revenue for the Q2 climbed to its highest for any Q2 since 2010, driven by the solid business growth. In addition, our ICT revenue reached its highest Q2 level since 2021. Based on our outperformance in the H1, we are confident in achieving our full year performance targets. In 2026, we continue to invest in AI and see concrete results. In the morning today, we announced the kickoff of the operation of our newly built AI data center in Lunping, Taoyuan, which is expected to add up to 36MW to our total IDC capacity upon full build-out.

Speaker #3: Driven by solid business growth, in addition, our ICT revenue reached its highest second quarter level since 2021. Based on our outperformance in the first half, we are confident in achieving our full-year performance targets.

Speaker #3: In 2026, we continue to invest in AI and see concrete results. This morning, we announced the kickoff of operations at our newly built AI data center in Renpin, Taoyuan, which is expected to add up to 36 megawatts to our total IDC capacity upon full build-out.

Speaker #3: In July, we plan to sign a memorandum of understanding with the Taiwan Stock Exchange to provide dedicated colocation capacity within our new AI data center in Taichung.

Lung Shih-Lin: In July, we were pleased to sign a memorandum of understanding with Taiwan Stock Exchange to provide dedicated colocation capacity within our new AI data center in Taichung, currently under construction, further expanding our market-leading financial colocation ecosystem in Taiwan. Both achievements demonstrate our ability to convert AI infrastructure investments into long-term financial return. Furthermore, leveraging our leading AI DC infrastructure and the sea-land-sky network deployment, we are positioning Chunghwa Telecom as the region's unique three A's hub for the AI era. Powered by our IOWN network and distributed AI DCs, the three A's hub delivers three core values. Assurance, providing resilient sea-land-sky connectivity. All photonics, enabling ultra-high capacity, low latency, and energy-efficient networking through IOWN. An AI hub connecting distributed AI computing resources across the Asia Pacific to support customers' AI development.

Rong-Shy Lin: In July, we were pleased to sign a memorandum of understanding with Taiwan Stock Exchange to provide dedicated colocation capacity within our new AI data center in Taichung, currently under construction, further expanding our market-leading financial colocation ecosystem in Taiwan. Both achievements demonstrate our ability to convert AI infrastructure investments into long-term financial return. Furthermore, leveraging our leading AI DC infrastructure and the sea-land-sky network deployment, we are positioning Chunghwa Telecom as the region's unique three A's hub for the AI era. Powered by our IOWN network and distributed AI DCs, the three A's hub delivers three core values. Assurance, providing resilient sea-land-sky connectivity. All photonics, enabling ultra-high capacity, low latency, and energy-efficient networking through IOWN. An AI hub connecting distributed AI computing resources across the Asia Pacific to support customers' AI development.

Speaker #3: Currently under construction, we are further expanding our market-leading financial collocation ecosystem in Taiwan. Both achievements demonstrate our ability to convert AI infrastructure investments into long-term financial return.

Speaker #3: Furthermore, leveraging our leading AIDC infrastructure and SEALAND SKY network deployment, we are positioning Chunghwa Telecom as the region's unique 3A hub for the AI era. Powered by our IO network and distributed AIDCs, the 3A hub delivers three core values: assurance, providing resilience and SEALAND SKY connectivity; all-photonics, enabling ultra-high capacity, low-latency, and energy-efficient networking through ION; and an AI hub connecting distributed AI computing resources across the Asia-Pacific to support customers' AI development.

Speaker #3: In addition, in terms of ION, we would like to highlight the ION AI Fund, which is the financial instrument we jointly established with our global partner in June.

Lung Shih-Lin: In terms of IOWN, we would like to highlight the IOWN AI Fund, which is the financial instrument we jointly established with global partners in June. The fund aims to not only build the IOWN ecosystem, but also create new business opportunities through technology investment. As all investors believe, the optical ecosystem is essential to the AI development. Our subsidiaries also continue to seize AI-related opportunities. In Q2, Chunghwa Precision Test Tech commenced new factory construction to meet a growing AI semiconductor testing demand. While Chunghwa Leading Photonics Tech, which stands to benefit from potential opportunities in the AI supply chain, began trading on the emerging stock exchange in June.

Rong-Shy Lin: In terms of IOWN, we would like to highlight the IOWN AI Fund, which is the financial instrument we jointly established with global partners in June. The fund aims to not only build the IOWN ecosystem, but also create new business opportunities through technology investment. As all investors believe, the optical ecosystem is essential to the AI development. Our subsidiaries also continue to seize AI-related opportunities. In Q2, Chunghwa Precision Test Tech commenced new factory construction to meet a growing AI semiconductor testing demand. While Chunghwa Leading Photonics Tech, which stands to benefit from potential opportunities in the AI supply chain, began trading on the emerging stock exchange in June.

Speaker #3: The fund aims to not only build the ION ecosystem, but also create new business opportunities through technology investments, as all investors believe the optical ecosystem is essential to AI development.

Speaker #3: Our subsidiaries also continue to seize AI-related opportunities. In the second quarter, Chunghwa Telecom Position Test Tech commenced new factory construction to meet growing AI semiconductor testing demand.

Speaker #3: While Chunghwa—sorry, Chunghwa Leading Photonics Tech, which stands to benefit from potential opportunities in the AI supply chain, began trending on the emerging stock exchange in June.

Speaker #3: Finally, we are delighted to report ESG recognitions received in the second quarter, including CDP's Top 80 rating for supplier engagement, the Best Issuer for Sustainable Finance, and the Best Sustainability Bond Award from the DSA.

Lung Shih-Lin: We are delighted to report ESG recognitions received in Q2, including the CDP's top A List rating for the supplier engagement, the Best Issuer for Sustainable Finance, and the Best Sustainability Bond awards from The Asset, and the top 5% of Taiwan Stock Exchange listed companies for corporate governance. We are proud to report that despite continuing the revenue growth in 2025, we remained on track with our SDGI commitments, reducing Scope 1 and Scope 2 greenhouse gas emission by 24.5% from our 2020 baseline, and Scope 3 emissions by 10.8% from our 2021 baseline. Let's move on to our Q2 2026 results. In Q2, we continued our market share leadership in Taiwan's mobile market.

Rong-Shy Lin: We are delighted to report ESG recognitions received in Q2, including the CDP's top A List rating for the supplier engagement, the Best Issuer for Sustainable Finance, and the Best Sustainability Bond awards from The Asset, and the top 5% of Taiwan Stock Exchange listed companies for corporate governance. We are proud to report that despite continuing the revenue growth in 2025, we remained on track with our SDGI commitments, reducing Scope 1 and Scope 2 greenhouse gas emission by 24.5% from our 2020 baseline, and Scope 3 emissions by 10.8% from our 2021 baseline. Let's move on to our Q2 2026 results. In Q2, we continued our market share leadership in Taiwan's mobile market.

Speaker #3: And the top 5% of Taiwan Stock Exchange listed companies for corporate governance. Additionally, we are proud to report that, despite continued revenue growth in 2025, we remain on track with our SBTI commitments, reducing scope 1 and scope 2 greenhouse gas emissions by 24.5% from our 2020 baseline, and scope 3 emissions by 10.8% from our 2021 baseline.

Speaker #3: Now, let's move on to our second quarter 2026 results. In the second quarter, we continued our market share leadership in Taiwan's mobile market. Our mobile revenue market share continued to climb, reaching a record high of 41.2%, while our subscriber market share rose to 39.8%.

Lung Shih-Lin: Our mobile revenue market share continued to increase, climbing to a record high of 41.2%, while our subscriber market share rose to 39.8%, according to our telecom regulator. We would particularly like to highlight the strength of our premium revenue base, as our revenue share continued to exceed our subscriber share. Our 5G performance was equally impressive. The 5G market share in Taiwan reached 39.4%, maintaining number one status, while 5G penetration rate amongst smartphone users increased to nearly 49% as of June. The average monthly fee uplift from 5G migration remained stable at 36%, and the postpaid churn rate stayed at a low level of 0.36%, reflecting strong customer loyalty. Thanks to the market-leading subscriber base, growing 5G adoption, and the increased roaming revenue on a year-over-year basis, our mobile service revenue grew by 3.2%, outperforming the industry average. Meanwhile, postpaid ARPU increased by 2.4% or TWD 13.

Rong-Shy Lin: Our mobile revenue market share continued to increase, climbing to a record high of 41.2%, while our subscriber market share rose to 39.8%, according to our telecom regulator. We would particularly like to highlight the strength of our premium revenue base, as our revenue share continued to exceed our subscriber share. Our 5G performance was equally impressive. The 5G market share in Taiwan reached 39.4%, maintaining number one status, while 5G penetration rate amongst smartphone users increased to nearly 49% as of June. The average monthly fee uplift from 5G migration remained stable at 36%, and the postpaid churn rate stayed at a low level of 0.36%, reflecting strong customer loyalty. Thanks to the market-leading subscriber base, growing 5G adoption, and the increased roaming revenue on a year-over-year basis, our mobile service revenue grew by 3.2%, outperforming the industry average. Meanwhile, postpaid ARPU increased by 2.4% or TWD 13.

Speaker #3: According to our telecom regulator, we would particularly like to highlight the strength of our premium revenue base, as our revenue share continues to exceed our subscriber share.

Speaker #3: Our 5G performance was equally impressive. The 5G market share in Taiwan reached 39.4%. We maintained our number one status, while the 5G penetration rate among smartphone users increased to nearly 49% as of June.

Speaker #3: The average monthly fee uplift from 5G migration remained stable at 36%. And the postpaid churn rate stayed at a low level of 0.36%, reflecting strong customer loyalty.

Speaker #3: Thanks to our market-leading subscriber base, growing 5G adoption, and increased roaming revenue, on a year-over-year basis, our mobile service revenue grew by 3.2%.

Speaker #3: Outperforming the industry average, meanwhile, postpaid output increased by 2.4% to $1,380. Notably, we observed our roaming revenue increased 19% year over year in the second quarter, with inbound roaming revenue growing 42%, benefiting from the robust tourism demand and increasing international travel activities.

Lung Shih-Lin: We observed our roaming revenue increased 19% year over year in Q2, with inbound roaming revenue growing 42% benefiting from the robust tourism demand and the increasing international travel activities. Let's move on to slide 6 for our fixed broadband business update. In Q2, we are glad to see the number of the subscriber adoption services base of 300 Mb per second and above, reached 42% of our total fixed broadband subscriber base, and the number continued to increase quarter over quarter. Among them, subscribers adopting 1 Gb per second above increased 61% year over year, supported by the continued success of our broadband promotion package. As a result, fixed broadband revenue in Q2 posted a 3% increase year over year, while the ARPU rose year over year by TWD 20.80 to TWD 824.80 per month.

Rong-Shy Lin: We observed our roaming revenue increased 19% year over year in Q2, with inbound roaming revenue growing 42% benefiting from the robust tourism demand and the increasing international travel activities. Let's move on to slide 6 for our fixed broadband business update. In Q2, we are glad to see the number of the subscriber adoption services base of 300 Mb per second and above, reached 42% of our total fixed broadband subscriber base, and the number continued to increase quarter over quarter. Among them, subscribers adopting 1 Gb per second above increased 61% year over year, supported by the continued success of our broadband promotion package. As a result, fixed broadband revenue in Q2 posted a 3% increase year over year, while the ARPU rose year over year by TWD 20.80 to TWD 824.80 per month.

Speaker #3: Let's move on to slide six for our fixed broadband business update. In the second quarter, we are glad to see the number of subscribers adopting services of 300 megabits per second and above reached 42% of our total fixed broadband subscriber base.

Speaker #3: And the number continues to increase quarter over quarter. Among them, subscribers adopting one gigabit per second and above increased 61% year over year, supported by the continued success of our broadband promotion package.

Speaker #3: As a result, fixed broadband revenue in the second quarter posted a 3% increase year over year. While the output rose year over year by $2,080 to $82,480 per month, fixed broadband subscribers also continued to deliver positive growth year over year. We will continue to keep the business up and sustainable.

Lung Shih-Lin: Fixed broadband subscriber also continued to deliver positive growth year over year. We will continue to keep the business up and sustainable. Page seven highlights the performance of our million-subscriber consumer services. In the second quarter, sign-ups of our multi-play offering, which integrates mobile, fixed broadband, and Wi-Fi services, continued to grow year over year for the 18th consecutive quarter, representing a 14% increase year over year and driving up our overall telecom revenue growth. Notably, our Wi-Fi registration among fixed broadband subscriber reached 57% as a solid basis for the smartphone connection. As the 2026 FIFA World Cup kicked off in June and ran through July, it successfully boosted video subscription number to their annual peak in July.

Rong-Shy Lin: Fixed broadband subscriber also continued to deliver positive growth year over year. We will continue to keep the business up and sustainable. Page seven highlights the performance of our million-subscriber consumer services. In the second quarter, sign-ups of our multi-play offering, which integrates mobile, fixed broadband, and Wi-Fi services, continued to grow year over year for the 18th consecutive quarter, representing a 14% increase year over year and driving up our overall telecom revenue growth. Notably, our Wi-Fi registration among fixed broadband subscriber reached 57% as a solid basis for the smartphone connection. As the 2026 FIFA World Cup kicked off in June and ran through July, it successfully boosted video subscription number to their annual peak in July.

Speaker #3: Page six and page seven highlight the performance of our million-subscriber consumer services. In the second quarter, sign-ups of our market play offering, which integrates mobile, fixed broadband, and Wi-Fi services, continued to grow year over year for the 18th consecutive quarter, representing a 14% increase year over year.

Speaker #3: And driven up over our overall telecom revenue growth. Notably, our Wi-Fi illustration among fixed broadband subscriber reached 57% as a solid basis for the smartphone connectivity.

Speaker #3: As the 2026 FIFA World Cup kicked off in June and then ran through July, it successfully boosted video subscription numbers to their annual peak in July.

Speaker #3: At the same time, the introduction of entertainment, a real-time match data and highlights feature during this FIFA World Cup helped drive total views of tech-supported broadcast across MOD and Hami Video up 24% compared with the previous tournament.

Lung Shih-Lin: At the same time, the introduction of entertainment, real-time match data, and the highlights feature during this FIFA World Cup helped drive total views of tech-supported broadcasts across MOD and Hami Video up 24% compared with the previous tournament. As a result, we are glad to see our total OTT revenue in Q2 increased 20% year over year. With the upcoming Asian Games in Q3, we are optimistic about our video performance through the next quarter. Lastly, our digital services continued to deliver solid growth. The subscriber number of our consumer cybersecurity services maintained over 1 million and delivered 11% year over year growth, supported by the rising awareness of digital security. Meanwhile, the number of transacting users of our digital carrier billing, or DCB, increased by 4.7% year over year.

Rong-Shy Lin: At the same time, the introduction of entertainment, real-time match data, and the highlights feature during this FIFA World Cup helped drive total views of tech-supported broadcasts across MOD and Hami Video up 24% compared with the previous tournament. As a result, we are glad to see our total OTT revenue in Q2 increased 20% year over year. With the upcoming Asian Games in Q3, we are optimistic about our video performance through the next quarter. Lastly, our digital services continued to deliver solid growth. The subscriber number of our consumer cybersecurity services maintained over 1 million and delivered 11% year over year growth, supported by the rising awareness of digital security. Meanwhile, the number of transacting users of our digital carrier billing, or DCB, increased by 4.7% year over year.

Speaker #3: As a result, we are glad to see our total OTT revenue in the second quarter increased 20% year over year. With the upcoming Asia Games in the third quarter, we are optimistic about our video performance through the next quarter.

Speaker #3: Lastly, our digital services continue to deliver solid growth. The subscriber number of our consumer cybersecurity services maintained over one million and delivered 11% year-over-year growth, supported by the rising awareness of digital security. Meanwhile, the number of transacting users of our digital carrier billing, or DCB, increased by 4.7% year over year.

Speaker #3: As customers continue to adopt digital net content, gaming, and AI application tools, we continue to see potential growth in DCB services going forward.

Lung Shih-Lin: As the customers continue to adopt digital net content, gaming, and AI application tool, we continue to see the potential growth in DCB services going forward. Slide eight illustrated the key developments in our enterprise ICT business. Through the collective efforts across the group, our ICT business delivered another strong quarter, with revenue increasing 32% year over year, driven by the continuous expansion of emerging services. Recurring ICT revenue also grew by 9%, maintaining solid momentum across major service lines, particularly IDC, cybersecurity, and international public cloud services. Among our core ICT service pillars, big data, cybersecurity, and IDC are the key growth drivers, posting year over year growth of 167%, 34%, and 14% respectively. Big data revenue surged, and cybersecurity revenue grew strongly, driven by the recognition of larger-scale projects for public sector customers, while IDC revenue growth was supported by the installation project for the manufacturing companies.

Rong-Shy Lin: As the customers continue to adopt digital net content, gaming, and AI application tool, we continue to see the potential growth in DCB services going forward. Slide eight illustrated the key developments in our enterprise ICT business. Through the collective efforts across the group, our ICT business delivered another strong quarter, with revenue increasing 32% year over year, driven by the continuous expansion of emerging services. Recurring ICT revenue also grew by 9%, maintaining solid momentum across major service lines, particularly IDC, cybersecurity, and international public cloud services. Among our core ICT service pillars, big data, cybersecurity, and IDC are the key growth drivers, posting year over year growth of 167%, 34%, and 14% respectively. Big data revenue surged, and cybersecurity revenue grew strongly, driven by the recognition of larger-scale projects for public sector customers, while IDC revenue growth was supported by the installation project for the manufacturing companies.

Speaker #3: Slide eight illustrated the key developments in our enterprise ICT business. Through the collective efforts across the group, our ICT business delivered another strong quarter.

Speaker #3: With revenue increasing 32% year over year, driven by the continuous expansion of emerging services, recurring ICT revenue also grew by 9%, maintaining solid momentum across major service line, particularly IDC, cybersecurity and international public cloud services.

Speaker #3: Among our core ICT service pillars, big data, cybersecurity, and IDC are the key drivers, posting year-over-year growth of 167%, 34%, and 14%, respectively.

Speaker #3: Big data revenue surged and cybersecurity revenue growth strongly driven by the recognition of larger scale projects for public sector customers while IDC revenue growth was supported by the installation project for the manufacturing companies.

Speaker #3: Notably, a key highlight is our second high ICT order intake, built on the strong momentum of ICT contract acquisitions during the first quarter.

Lung Shih-Lin: Notably, a key highlight is our second-high ICT order intake. Built on the strong momentum in ICT contract acquisitions during Q1, our ICT order intake remained robust in Q2, with contract value increasing by 30% year over year. As a result, the total ICT contract value secured in H1 of the year has already matched the full year's total amount achieved in 2025, reflecting a strong project pipeline and reinforcing our confidence in future growth. As of June, our major contract wins in Q2 include large-scale AIDC projects, which are expected to further increase AI-related revenue. Flagship Taipower energy storage project, positioning us for additional smart grid opportunities, and the multiple smart surveillance projects from correctional institutions demonstrating our ability to replicate successful deployment across the sector.

Rong-Shy Lin: Notably, a key highlight is our second-high ICT order intake. Built on the strong momentum in ICT contract acquisitions during Q1, our ICT order intake remained robust in Q2, with contract value increasing by 30% year over year. As a result, the total ICT contract value secured in H1 of the year has already matched the full year's total amount achieved in 2025, reflecting a strong project pipeline and reinforcing our confidence in future growth. As of June, our major contract wins in Q2 include large-scale AIDC projects, which are expected to further increase AI-related revenue. Flagship Taipower energy storage project, positioning us for additional smart grid opportunities, and the multiple smart surveillance projects from correctional institutions demonstrating our ability to replicate successful deployment across the sector.

Speaker #3: Our ICT order intake remained robust in the second quarter, with contract value increasing by 30% year over year. As a result, the total ICT contract value secured in the first half of the year has already matched the full year's total amount achieved in 2025, reflecting a strong project pipeline and reinforcing our confidence in future growth.

Speaker #3: As of June, our major contract win in the second quarter included larger-scale AIDC projects, which are expected to further increase AI-related revenue.

Speaker #3: The flagship Thai Power Energy Storage Project is positioning us for additional smart grid opportunities and multiple smart surveillance projects from correctional institutions, demonstrating our ability to replicate successful deployments across the sector.

Speaker #3: In addition, we became the first telecom operator to provide cloud-based encryption sharing services to the financial industry, further reinforcing our differentiated ICT market leadership.

Lung Shih-Lin: In addition, we became the first telecom operator to provide cloud-based encryption sharing services to the financial industry, further reinforcing our differentiated ICT market leadership. Slide nine highlights the robust performance of our international subsidiaries and the global network performance. In Q2, our international subsidiaries delivered impressive performance as aggregate revenue increased 242% year over year, particularly due to the large-scale ICT project deliveries across the United States and Southeast Asia. In the United States, revenue increased more than 11-fold year over year, mainly due to the delivery of the large-scale AI supply chain projects in Texas. Meanwhile, revenue in Southeast Asia doubled on year, supported by the ongoing construction project for key customer in Singapore and Vietnam. Concurrently, with our proven overseas ICT integration expertise, we have successfully secured new projects across the United States, Singapore, and Thailand, providing strong visibility into future growth.

Rong-Shy Lin: In addition, we became the first telecom operator to provide cloud-based encryption sharing services to the financial industry, further reinforcing our differentiated ICT market leadership. Slide nine highlights the robust performance of our international subsidiaries and the global network performance. In Q2, our international subsidiaries delivered impressive performance as aggregate revenue increased 242% year over year, particularly due to the large-scale ICT project deliveries across the United States and Southeast Asia. In the United States, revenue increased more than 11-fold year-over-year, mainly due to the delivery of the large-scale AI supply chain projects in Texas. Meanwhile, revenue in Southeast Asia doubled on year, supported by the ongoing construction project for key customer in Singapore and Vietnam. Concurrently, with our proven overseas ICT integration expertise, we have successfully secured new projects across the United States, Singapore, and Thailand, providing strong visibility into future growth.

Speaker #3: Slide nine highlights the robust performance of our international subsidiaries and global network. In the second quarter, our international subsidiaries delivered impressive results as aggregate revenue increased 242% year over year.

Speaker #3: Particularly due to the larger-scale ICT project deliveries across the United States and Southeast Asia, in the United States, revenue increased more than eleven-fold year over year, mainly due to the delivery of the larger-scale AI supply chain projects in Texas.

Speaker #3: Meanwhile, revenue in Southeast Asia doubled year over year, supported by ongoing construction projects for key customers in Singapore and Vietnam. Concurrently, with our proven overseas ICT integration expertise, we have successfully secured new projects across the United States, Singapore, and Thailand, providing strong visibility into future growth.

Speaker #3: In addition to the strong momentum of our overseas ICT business, our network resilience business continues to expand with our Asia Pacific 3A hub strengths. Satellite services revenue increased 14% year over year, supported by increasing adoption of satellite connectivity solutions across industries.

Lung Shih-Lin: In addition to the strong momentum of overseas ICT business, our network resilience business continued to expand with our Asia Pacific Three A's hub strength. Satellite services revenue increased 14% year over year, supported by increasing adoption of satellite connectivity solution cross-industry. Notably, satellite-related ICT contracts secured in H1 exceeded TWD 200 million, highlighting the growing demand for the diversified communication infrastructure. Another key growth driver from Three A's hub strength is the international private lease circuit business, whose revenue increased 8% year over year, mainly driven by SJC2 and the Apricot submarine cable. Looking ahead, given the runoff of the AI-driven data traffic and the growing international connectivity demand resulting from the geopolitical uncertainty, we are well-positioned to capture these opportunities, supported by continued investment in submarine cable and the satellite projects.

Rong-Shy Lin: In addition to the strong momentum of overseas ICT business, our network resilience business continued to expand with our Asia Pacific Three A's hub strength. Satellite services revenue increased 14% year over year, supported by increasing adoption of satellite connectivity solution cross-industry. Notably, satellite-related ICT contracts secured in H1 exceeded TWD 200 million, highlighting the growing demand for the diversified communication infrastructure. Another key growth driver from Three A's hub strength is the international private lease circuit business, whose revenue increased 8% year over year, mainly driven by SJC2 and the Apricot submarine cable. Looking ahead, given the runoff of the AI-driven data traffic and the growing international connectivity demand resulting from the geopolitical uncertainty, we are well-positioned to capture these opportunities, supported by continued investment in submarine cable and the satellite projects.

Speaker #3: Notably, satellite-related ICT contracts secured in the first half exceeded NT$200 million, highlighting the growing demand for diversified communication infrastructure. Another key growth driver from 3A hub strengths is the international private leased circuit business, whose revenue increased 8% year over year, mainly driven by SJC2 and Apricot submarine cables.

Speaker #3: Looking ahead, given the renewal of AI-driven data traffic and growing international connectivity demand resulting from geopolitical uncertainty, we are well positioned to capture these opportunities, supported by continued investment in submarine cable and satellite projects.

Speaker #3: Now, let's move on to page 10 for the financial performance of our three business groups. In the second quarter, our core telecom business remained strong.

Lung Shih-Lin: Now, let's move on to page 10 for the financial performance of our three business group. In Q2, our core telecom business remained strong. Growth in mobile services, fixed broadband, and handset sales drove our consumers' business group revenue up 4.8% year over year, while income before tax increased a solid 3.6%. Beyond our core telecom business, ICT business continued to be a key growth engine. Strong ICT demand, along with the growth in mobile and broadband services, lifted the enterprise business group revenue by 3.7% year over year, while income before tax increased 2.1%. In Q2, the strongest performance came from our international business group, which saw growth across every segment, resulting in an approximately 79% increase in the revenue on year, and a 31% increase in income before tax on year, respectively.

Rong-Shy Lin: Now, let's move on to page 10 for the financial performance of our three business group. In Q2, our core telecom business remained strong. Growth in mobile services, fixed broadband, and handset sales drove our consumers' business group revenue up 4.8% year over year, while income before tax increased a solid 3.6%. Beyond our core telecom business, ICT business continued to be a key growth engine. Strong ICT demand, along with the growth in mobile and broadband services, lifted the enterprise business group revenue by 3.7% year over year, while income before tax increased 2.1%. In Q2, the strongest performance came from our international business group, which saw growth across every segment, resulting in an approximately 79% increase in the revenue on year, and a 31% increase in income before tax on year, respectively.

Speaker #3: Growth in mobile services, fixed broadband, and handset sales drove Consumer Business Group revenue up 4.8% year over year, while income before tax increased a solid 3.6%.

Speaker #3: Beyond our core telecom business, our ICT business continues to be a key growth engine. Strong ICT demand, along with growth in mobile and broadband services, lifted Enterprise Business Group revenue by 3.7% year over year, while income before tax increased 2.1%.

Speaker #3: In the second quarter, the strongest performance came from our International Business Group, which saw growth across every segment, resulting in approximately a 79% increase in revenue year-over-year and a 31% increase in income before tax year-over-year, respectively.

Speaker #3: This was propelled by rising demand for ICT integration projects, mainly driven by the relocation of AI supply chain contribution from the SJC2 and Apricot submarine cables, as well as the strong roaming revenue increase.

Lung Shih-Lin: This was propelled by rising demand for ICT integration projects, mainly driven by the relocation of AI supply chain, contribution from the SJC2 and Apricot submarine cables, as well as the strong roaming revenue increase. That concludes the business overview for Q2. Now, I would like to hand the call over to Audrey for the financial update.

Rong-Shy Lin: This was propelled by rising demand for ICT integration projects, mainly driven by the relocation of AI supply chain, contribution from the SJC2 and Apricot submarine cables, as well as the strong roaming revenue increase. That concludes the business overview for Q2. Now, I would like to hand the call over to Audrey for the financial update.

Speaker #3: That concludes the business overview for the second quarter. Now, I would like to hand the call over to the auditor for the financial updates.

Speaker #1: Thank you, President. Good afternoon, everyone, and thank you for joining us today. I'm pleased to walk you through our financial performance for the second quarter of 2026.

Audrey Wen-Hsin Hsu: Thank you, President. Good afternoon, everyone, and thank you for joining us today. I'm pleased to walk you through our financial performance for Q2 2026. Please turn to slide 12. In Q2, we delivered record high performance for the period. Consolidated revenue reached TWD 61.36 billion, representing an 8.2% increase year-over-year, and making our highest Q2 top line since 2010. This strong momentum was driven by three primary engines. First, our ICT business achieved its highest Q2 revenue since 2021. This is also propelled by our overseas subsidiaries fulfilling major AI supply chain projects in the US and Southeast Asia, alongside the domestic growth in the big data, cybersecurity, and AIDC capacity. Second, product sales grew behind elevated handset ASPs at Ferna and strong AI testing contribution from Chunghwa Precision Test.

Speaker #1: Please turn to slide 12. In the second quarter, we delivered record high performance for the period. Consolidated revenue reached NT$61.36 billion, representing an 8.2% increase year over year, and making this our highest Q2 top line since 2010.

Speaker #1: This strong momentum was driven by three primary engines. First, our ICT business achieved its highest Q2 revenue since 2021. This progress was also propelled by our overseas subsidiaries fulfilling major AI supply chain projects in the US and Southeast Asia.

Speaker #1: Alongside the domestic growth in the big data, cybersecurity, and AIDC capacity. Second, product sales grew behind elevated handset ASPs at Sennel and strong AI testing contribution from Chunghwa Precision Test.

Speaker #1: Third, our core telecom service continued its steady expansion, reinforced by ongoing high-tier 5G migration and broadband speed upgrades. Moving to operating profitability, income from operations rose 5.7% year over year, beyond top-line scale.

Audrey Wen-Hsin Hsu: Third, our core telecom service continue their steady expansion reinforced by ongoing high-tiered 5G migration and broadband speed upgrades. Moving to operating profitability, income from operations rose 5.7% year-over-year. Beyond top-line scale, this operating growth reflects high margin flow through from our core telecom business, supported by 5G adoption and fixed program speed upgrades, paired with margin accretive contribution from Chunghwa Precision Test. On the bottom line, EPS expanding to TWD 1.38, up from TWD 1.31 in the prior year period, makes our highest Q2 EPS in 10 years. EBITDA also increased 4.1% to TWD 23.52 billion, maintaining a healthy EBITDA margin of 38.32%. Turning to our year-to-year performance shown in the final column, H1 revenue increased 7.8% year-over-year, driven by a broad-based growth across ICT, mobile sales, and core telecom service. Operating income rose 5.2% to TWD 26.36 billion.

Speaker #1: This operating growth reflects high-margin flow-through from our core telecom business, supported by 5G adoption and fixed broadband speed upgrades, paired with margin-accretive contribution from Chunghwa Precision Test.

Speaker #1: On the bottom line, EPS expanded to NT$1.38, up from NT$1.31 in the prior year period, making this our highest second quarter EPS in 10 years.

Speaker #1: EBITDA also increased 4.1% to NT$23.52 billion, maintaining a healthy EBITDA margin of 38.32%. Turning to our year-over-year performance shown in the final column, H1 revenue increased 7.8% year over year, driven by broad-based growth across ICT, mobile sales, and core telecom service.

Speaker #1: Operating income rose 5.2% to NT$26.36 billion, net income grew 3.9% to NT$20.75 billion, and EPS reached NT$2.68, up from NT$2.57 last year.

Audrey Wen-Hsin Hsu: Net income grew 3.9% to TWD 20.75 billion, EPS reached TWD 2.68, up from TWD 2.57 last year. EBITDA expanding 3.8% to TWD 46.82 billion, underscoring our recurring cash flow strength. Overall, this balanced result gives us strong confidence in achieving our full-year targets. Please turn to slide 13 for an overview of our balance sheet position. Total assets increased by 3.3% year-to-date, primarily driven by current assets. This was mainly due to growth in cash, time deposits, NCDs, and inventories, reflecting higher investment in ongoing ICT projects. On the liability side, total liabilities rose 27.1% compared to year-end 2025, largely driven by the seasonal recognition of dividend payable. As of 30 June 2026, our reported debt ratio stood at 31%. Excluding dividend payable, our adjusted debt ratio improved to 23.72%, down from 25.21% at year-end 2025.

Speaker #1: EBITDA expanded 3.8% to $46.82 billion, underscoring our recurring cash flow strength. Overall, this balanced result gives us strong confidence in achieving our four-year targets.

Speaker #1: Please turn to slide 13 for an overview of our balance sheet position. Total assets increased by 3.3% year to date, primarily driven by current assets.

Speaker #1: This was mainly due to growth in cash, time deposits, NCDs, and inventories, reflecting higher investment in ongoing ICT projects. On the liability side, total liabilities rose 27.1% compared to year-end 2025, largely driven by the seasonal recognition of dividend payable.

Speaker #1: As of June 30, 2026, our reported debt ratio stood at 31%. Excluding dividend payable, our adjusted debt ratio improved to 23.72%, down from 25.21% at year-end 2025.

Speaker #1: More importantly, our interest-bearing debt ratio remains very low at approximately 5%, reflecting minimal financial leverage and prudent balance sheet management. Our core financial health remains robust, with a current ratio of 122.3% and a net debt-to-EBITDA ratio standing at zero, underscoring our solid financial position.

Audrey Wen-Hsin Hsu: More importantly, our interest-bearing debt ratio remains very low at approximately 5%, reflecting minimum financial leverage and prudent balance sheet management. Our core financial health remains robust, with a current ratio of 122.3% and a net debt to EBITDA ratio standing at zero, underscoring our solid financial position. Moving to slide 14 for our cash flow summary for H1 2026. Net cash provided by operating activities remained healthy over the six-month period. Working capital was mainly impacted by higher inventory spending for ongoing ICT projects. This was largely offset by strong cash inflows from contract liabilities and lower payable outflows. On the investment side, H1 total CapEx was TWD 9.85 billion, down 14.3% year-over-year. Mobile CapEx declined 9%, reflecting the normalization investment following the peak phase of 5G network deployment, while non-mobile capacity decreased 16.3%, primarily due to a higher comparison base last year.

Speaker #1: Moving to slide 14 for our cash flow summary for the first half of 2026. Net cash provided by operating activities remained healthy over the six-month period.

Speaker #1: Working capital was mainly impacted by higher inventory spending for ongoing ICT projects, but this was largely offset by strong cash inflows from contract liabilities and lower payable outflows.

Speaker #1: On the investment side, first half total capex was NT$9.85 billion, down 14.3% year over year. Mobile capex declined 9%, reflecting the normalization of investment following the peak phase of 5G network deployment.

Speaker #1: While non-mobile CapEx decreased 16.3%, primarily due to a higher comparison phase last year, we also expect a greater portion of CapEx this year to be deployed in the second half of the year.

Audrey Wen-Hsin Hsu: We also expect a greater portion of CapEx this year to be deployed in H2. As a result, our H1 free cash flow reached TWD 21.89 billion. Our overall cash position improved year-over-year and remains very solid, continuing to comfortably support both ongoing business expansions and shareholders' returns. Turning to slide 15 for our performance relative to guidance. As our president noted at the beginning of our call, we delivered outstanding Q2 results, with top-line revenue exceeding our expectations. This outperformance was supported by continued ICT momentum, steady core telecom growth, and stronger than expected product sales. Importantly, revenue growth outpaced operating expense growth, reflecting solid operating leverage and cost discipline. Although project-related costs grew alongside higher ICT revenue recognition, total expenses remained well within target.

Speaker #1: As a result, our six-month free cash flow reached $21.89 billion. Our overall cash position improved year over year and remains very solid.

Speaker #1: Continuing to comfortably support both ongoing business expansions and shareholder returns. Turning to slide 15 for our performance relative to guidance. As our president noted at the beginning of our call, we delivered outstanding second quarter results, with top line revenue exceeding our expectations.

Speaker #1: This outperformance was supported by continued ICT momentum, steady core telecom growth, and stronger than expected product sales. Importantly, revenue growth outpaced operating expense growth, reflecting solid operating leverage and cost discipline.

Speaker #1: Although project-related costs grew alongside higher ICT revenue recognition, total expenses remained well within target. Consequently, all key profitability metrics—operating income, net income, EPS, and EBITDA—came in above the high end of our guidance.

Audrey Wen-Hsin Hsu: Consequently, all key profitability metrics, operating income, net income, EPS, and EBITDA came in above the high end of our guidance. That concludes my financial overview. Thank you for your time, I will now hand the call back to the operator for Q&A.

Speaker #1: That concludes my financial overview. Thank you for your time, and I will now hand the call back to the operator for Q&A.

Speaker #2: Yes, thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question for any of today's speakers, please press the star key and the number one on your telephone keypad, and you will enter the queue.

Operator: Yes. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question for any of today's speakers, please press star key and number one on your telephone keypad, you will enter the queue. After you are announced, please ask your question. When you are speaking, please be louder or closer to the microphone. If you find that your question has been answered before it's your turn to speak, please press star key and number two to cancel the question. You are also welcome to send questions via chat box on the webcast page. We will begin with the questions from telephone line, then move to the queries from the webpage. Thank you. Firstly, we will have Charlie Bi of HSBC for questions. Go ahead, please.

Speaker #2: After you are announced, please ask your question. When you are speaking, please be louder or move closer to the microphone. If you find that your question has been answered before it is your turn to speak, please press the Start key and the number two to cancel your question.

Speaker #2: You are also welcome to send questions via the chat box on the webcast page. We will begin with questions from the telephone line and then move to queries from the webpage.

Speaker #2: Thank you. Firstly, we'll have Charlie Bai of HSBC for questions. Go ahead, please.

Speaker #3: Hello, management. Congratulations on this very strong result. I saw spectacular growth in the international sector. I want to know more about the long-term guidance and visibility in this segment because I know that some could be project-based. How do we see the long-term demand, and can we break it down by different regions such as the US, Southeast Asia, etc.?

Charlie Bi: Hello, management. Congratulations on this very strong result. I saw spectacular growth in the international sector. Might know more about the long-term guidance and visibility in this segment because I know that some could be project-based. How do we see the long-term demand? Would you mind breaking down for different regions such as US, Southeast Asia, et cetera? Thank you very much.

Charlie Bai: Hello, management. Congratulations on this very strong result. I saw spectacular growth in the international sector. Might know more about the long-term guidance and visibility in this segment because I know that some could be project-based. How do we see the long-term demand? Would you mind breaking down for different regions such as US, Southeast Asia, et cetera? Thank you very much.

Speaker #3: Thank you very much.

Speaker #4: Hi, Charlie. Thank you very much for your question. I guess the question is one to look at the outlook for the international sector.

Audrey Wen-Hsin Hsu: Hi, Charlie. Thank you very much for your question. I guess the question is you want to look at the outlook for the international sector, and long-term guidance and visibility in the segment. As we see the global trend of the AI development, we continue to see growing interest from international customers, particularly in AI infrastructure, international connectivity and data center service, in the US and also in Southeast Asia. While our primary market remains Taiwan, we believe that this AI expansion across the Taiwan, US, and Southeast Asia is continued in align with the AI development growth.

Speaker #4: And long-term guidance and visibility in the segment. So, as we see the global trend of AI development, we continue to see growing interest from international customers, particularly in AI infrastructure.

Speaker #4: International service in the US and also in Southeast Asia. So while our primary market remains Taiwan, we believe that the the this AI expansion across the the Taiwan US and Southeast Asia is is continued in in aligned with the AI development growth.

Charlie Bi: Thank you, Audrey.

Charlie Bai: Thank you, Audrey.

Speaker #3: Thank you, Archie.

Speaker #4: Is there—do you need any—I mean, is there anything that you want me to add on for this issue?

Audrey Wen-Hsin Hsu: Is there anything that you want me to add on for this issue?

Speaker #3: Yeah, maybe more color on the project type. Are they mostly AI data center build-outs, or any kind of more color is really appreciated.

Charlie Bi: Yeah, maybe more color on the project type. Are they mostly AI data center build out or any kind of more color is really appreciated.

Charlie Bai: Yeah, maybe more color on the project type. Are they mostly AI data center build out or any kind of more color is really appreciated.

Speaker #4: Okay. Charlie, maybe I can give you some, you know, information. As for the projects we acquired, we see in the United States market, actually, so far, just like Audrey said, we see a lot of opportunities related with the AI supply chain, right?

Angela Tsai: Okay. Charlie, maybe I can give you some information. As the projects we acquired, we see in the US market, actually so far, we see just like Audrey said, we see a lot of opportunities related with the AI supply chain, right? Actually, for the opportunities actually, I think in this year or next 2 to 3 years, the opportunities is like several billion TWD. TWD. Several billion TWD.

Speaker #4: And actually, for the opportunities, I think in the near term—this year or the next two to three years—the opportunity is several billion dollars.

Speaker #4: NT dollars, several billion NT dollars.

Charlie Bi: Got you. Thank you very much.

Charlie Bai: Got you. Thank you very much.

Speaker #3: Got you. Thank you very much.

Speaker #2: Thank you. Next one, Ron John Sharma, JP Morgan, Singapore. Go ahead, please.

Operator: Thank you. Next one, Ranjan Sharma, JP Morgan, Singapore. Go ahead, please.

Operator: Thank you. Next one, Ranjan Sharma, JPMorgan, Singapore. Go ahead, please.

Speaker #5: Hi, good evening, management. Thank you for the presentation and the opportunity. I have three questions. Firstly, on the AIDC, what is the required investment to build out the 36 megawatts of data center capacity?

Ranjan Sharma: Hi. Good evening, management. Thank you for the presentation and the opportunity. I have three questions. Firstly, on the AIDC, what is the required investment to build out the 36MW of the data center capacity, and what is your projected IRR? The second question is on IOWN. You talk about expanding investments. Can you help us understand what you're doing here? What is the required investment, and what is the impact that you see on your financial outlook going forward? The last question is if you can remind us on the enterprise ICT side. There seems to be a lot of volatility in the revenues from one quarter to another quarter. If you can help us understand the drivers of that. Thank you.

Speaker #5: And what is your projected IRR? The second question is on ION. You talk about expanding investments. Can you help us understand what you're doing here?

Speaker #5: What is the required investment? And what is the impact that you see on your financial outlook going forward? The last question is, if you can remind us, on the enterprise ICT side there seems to be a lot of volatility in the revenues from one quarter to another.

Speaker #5: If you can, help us understand the drivers of that. Thank you.

Speaker #4: Hi, Ron John. Thank you very much for the issue about the AIDC. For the question about the AIDC, as we mentioned earlier, our Lumpin AIDC and Taichung AIDC are under construction to provide AIDC services for our confirmed customers.

Audrey Wen-Hsin Hsu: Hi, Ranjan. Thank you very much for the issue about the AIDC. For the question about the AIDC that as we mentioned earlier that our Lunping AIDC and Taichung AIDC are under construction to provide AIDC service for our confirmed customers. While you are interested in this IRR, we don't usually disclose the expected IRR for individual projects. However, just to give you some idea that regarding the Taiwan's IDC market, we would like to highlight our leading position. On a group basis, combining the capacity of Chunghwa Telecom and also Cire Chip Telecom. Our IDC market share in Taiwan reached 78% as of the Q2, maintaining our position as the market leader. I think this information may give you some idea about our value of the IDC in Taiwan.

Speaker #4: And while you are interested in this IR, we don't usually disclose the expected IR for individual projects. However, just to give you some idea regarding Taiwan's IDC market, we would like to highlight our leading position.

Speaker #4: On a group basis, combining the capacity of Chunghwa Telecom and our subsidiary Chip Telecom, our IDC market share in Taiwan reached 78% as of the second quarter, maintaining our position as a market leader.

Speaker #4: I think this information may give you some idea about our value of the ICC in Taiwan. And also, another point is that while we don't disclose the detailed IR for individual projects, each of our investments is subject to our very disciplined capital allocation framework and investment evaluation.

Audrey Wen-Hsin Hsu: Also, another point is that while we don't disclose the detailed IRR for individual projects, each investment is subject to our very disciplined capital allocation framework and investment evaluation. We only proceed with projects that meet our financial and strategic return requirements and can help create long-term shareholder value, we will counter the project. I hope this is helpful for your question about the first question.

Speaker #4: So, we only proceed with projects that meet our financial and strategic return requirements, and that can help create long-term shareholder value.

Speaker #4: Then we will consult the project. So so I hope this is helpful for for your question about the the the first question.

Ranjan Sharma: Yes. Thank you. Can you help us with the amount of investment required to build out 36 MW of capacity?

Speaker #5: So yes, thank you. Can you help us with the amount of investment required to build out 36 megawatts of capacity?

Speaker #4: Okay, Roger, are you asking about the total capacity of our IDC and AIDC?

Angela Tsai: Okay. Roger, are you asking the total capacity of our IDC and AIDC?

Speaker #5: Yeah, the amount of investment required to build that capacity.

Ranjan Sharma: Yeah. The amount of investment required to build that capacity.

Angela Tsai: Investment required for what?

Speaker #4: Investment required for what?

Speaker #5: To build the capacity, how much capital do you need to deploy to build the capacity?

Ranjan Sharma: To build the capacity. How much capital do you need to deploy to build the capacity?

Speaker #4: Well, actually, you know, for the Lumpin AIDC, we say that when it's built out, you know, when we completely complete the build-out, then the maximum it could provide is 36 megawatts—36 megawatts.

Angela Tsai: Well, actually for the Lunping AIDC, we say that when it's build out, we completed the build out, then the maximum it could provide is the 36MW. The AIDC is building by phases. Our investment injected is by phases. Yeah. We don't disclose the total capital we invest for the Lunping AIDC. Yeah.

Speaker #4: But the AIDC is being built, you know, in phases. So our investments, you know, are injected in phases. Yeah. But we don't disclose, you know, the total capital we invest for the Lumpin AIDC.

Speaker #4: Yeah.

Speaker #5: Okay.

Ranjan Sharma: Okay.

Speaker #4: And in terms of your last question is about the ICT volatility. The ICT revenue, right? But you know, actually we foresee that for this year, the ICT revenue, the volatility is the pattern the pattern is similar to the previous year.

Angela Tsai: In terms of your last question is about the ICT volatility, the ICT revenue, right? Actually, we foresee that for this year, the ICT revenue, the volatility is the pattern. The pattern is similar to the previous year, and we are quite confident to beat our ICT revenue target for this year. Yeah.

Speaker #4: And we are quite confident we will beat our, you know, ICT revenue target for this year. Yeah.

Speaker #5: Okay. The last question on ION.

Ranjan Sharma: Okay. The last question on IOWN.

Angela Tsai: IOWN? Sorry, could you repeat the question about IOWN?

Speaker #4: I sorry, could you repeat the question about ION?

Angela Tsai: IOWN? Sorry, could you repeat the question about IOWN?

Speaker #5: Yes. Can you help us understand the investments that you're making in ION? How much capital are you deploying there? And how does that impact your business outlook going forward?

Ranjan Sharma: Yes. Can you help us understand the investments that you're making in IOWN? How much capital that you're deploying there, and how does that impact your business outlook going forward?

Speaker #4: Since you are asking about the ION AI fund, right? Is that a question you want to ask?

Angela Tsai: If you are asking about the IOWN AI Fund, right? Is that the question you want to ask?

Speaker #5: Yes, and also, like, yes. And also, like, how—what is the revenue opportunity from ION?

Ranjan Sharma: Yes. Also like, what is the revenue opportunity from IOWN?

Speaker #4: Actually, we see that the ION ecosystem is quite important in the AI era because, you know, in our plan, we want to connect our AIDC, the distributed AIDC, both at home and abroad.

Angela Tsai: Actually, we see that IOWN ecosystem is quite important in the AI era because in our plan, we want to connect our AIDC, the distributed AIDC at home and abroad through the IOWN network, connected by IOWN network. This is still in the early stage that we invest in building up this kind of network. In terms of revenue, I think it still takes time to gain the real revenue from IOWN network. Yeah.

Speaker #4: Through the ION network, you know, connected by the ION network. But, you know, this is still in the early stage as we invest in building up this kind of, you know, network.

Speaker #4: So, in terms of revenue, I think it still takes time to gain real revenue from the ION network. Yeah.

Speaker #5: Okay.

Ranjan Sharma: Okay.

Speaker #4: To add on some, I think nowadays in the semiconductor, the all-photonics issue is becoming a key driver for the next generation of the data center.

Audrey Wen-Hsin Hsu: To add on some, I think nowadays in the semiconductor, the all-photonics issue is becoming a key driver for the next generation of the data center. I think IOWN is quite important for the next generation data center. We believe that at this moment, this can help us to build our competitive advantage, given that, as I just mentioned, that AIDC, we are the major player. We take almost reaching 80% of the market share in Taiwan, and given that so many customers in Taiwan have the position across the Asia Pacific. We view IOWN as both a technology and business initiative. While this ecosystem development takes time, we believe it provides an important foundation for future AI-related service and next-generation network capabilities.

Speaker #4: I think ION is is is quite important that for the next for the next generation data center. So we we believe that this kind of the at this moment, this is our can help us to build our competitive advantage given that as I just mentioned that AIDC, we are the major player with Texas almost reaching 80% of the of the market share in Taiwan and we believe that and and given that so many customers in Taiwan have the position across the Asia Pacific.

Speaker #4: So so ION is we view ION as both a technology and business initiative. So while this ecosystem development takes time, we believe it provides an important foundation for future AI related service and next generation network capabilities.

Speaker #5: Got it. Thank you.

Ranjan Sharma: Got it. Thank you.

Speaker #2: Thank you. As a reminder, please press the star key and the number one on your keypad if you would like to ask a question. Thank you.

Operator: Thank you. As a reminder, please press the star key and number one on your keypad if you would like to ask the question. Thank you. We are now in question and answer session. If you would like to ask the question, please press star key and number one on your telephone keypad. Thank you. Ladies and gentlemen, we are now in question and answer session. To ask the question, you may press star key and number one on your telephone keypad. Thank you. Thank you. If there are no further questions, I will turn it back over to President Lin. Thank you.

Speaker #2: We are now in the question and answer session. If you would like to ask a question, please press the star key and number one on your telephone keypad.

Speaker #2: Thank you. Ladies and gentlemen, we are now in the question and answer session. To ask a question, you may press the star key and number one on your telephone keypad.

Speaker #2: Thank you. Thank you. And if there are no further questions, I'll turn it back over to President Lane. Thank you.

Speaker #5: Okay, thank you very much for your participation. See you. Bye-bye.

Lung Shih-Lin: Okay. Thank you very much for your participation. See you. Bye-bye.

Rong-Shy Lin: Okay. Thank you very much for your participation. See you. Bye-bye.

Speaker #2: Thank you, President Lane. Ladies and gentlemen, we thank you for your participation in Chunghwa Telecom's conference. There will be a webcast replay available within an hour.

Operator: Thank you, President Lin. Ladies and gentlemen, we thank you for your participation in Chunghwa Telecom's conference. There will be a webcast replay within an hour. Please visit www.cht.com.tw/ir under the IR calendar section. You may now disconnect. Thank you again. Goodbye.

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Q2 2026 Chunghwa Telecom Co Ltd Earnings Call

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