Q3 2026 ASE Technology Holding Co Ltd Earnings Call

Speaker #2: We were always moving

Speaker #3: closer. Even when we couldn't see. All the lines that ran between us, all the ways you'd get to me. Through the distance, through the silence, something always carried through.

Speaker #3: Every road I thought was leading nowhere, somehow led me back to you.

Ken Hsiang: Hello, I am Ken Hsiung, the Head of Investor Relations at ASE Technology Holding Co., Ltd.. Welcome to our Q3 2026 earnings release. I am joined today by Joseph Tung, our CFO. Thank you for joining us today. Please refer to our Safe Harbor notice on page 2. All participants consent to having their voices and questions broadcast via participation in this event. If you do not consent, please refrain from asking questions or leave the session now. 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 TWD unless otherwise indicated. As a Taiwan-based company, our financial information is presented in accordance with Taiwan IFRS.

Speaker #1: 12, I am Ken Sheng, the head of investor relations at ASE Technology Holdings. Welcome to our third quarter 2026 earnings release. I am joined today by Joseph Tong, our CFO.

Speaker #1: Thank you for joining us 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.

Speaker #1: If you do not consent, please refrain from asking questions or leave the session now. I would like to remind everyone that the presentation that follows may contain forward-looking statements.

Speaker #1: These forward-looking statements are subject to a high degree of risk and are actual results may differ materially. For the purposes of this presentation, dollar figures are generally stated in NTD unless otherwise indicated.

Speaker #1: As a Taiwan-based company, our financial information is presented in accordance with Taiwan IFRS. Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those separately presented by our subsidiaries.

Ken Hsiang: Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those separately presented by our subsidiaries. For today's presentation, I will give a brief business update and then go through the Q3 results. Joseph will close with our Q4 outlook. During the third quarter, our ATM capacities ran at or near full utilization rates. Demand for our services continues to outpace our ability to supply such services within our LEAP and much of our non-LEAP capacities. Our revenues grew faster than we had initially expected, driven primarily by faster than expected installations of high-demand LEAP capacities. Non-LEAP also performed slightly better than initial expectations. Even though, historically speaking, third quarters tend to be driven by seasonal strength, given the increasing mix of LEAP services, seasonality related to underlying consumer buying patterns are becoming less of a factor in our overall loading patterns.

Speaker #1: For today's presentation, I'll give a brief business update and then go through the Q3 results. Joseph will close with our Q4 outlook. During the third quarter, our ATM capacities ran at or near full utilization rates.

Speaker #1: Demand for our services continues to outpace our ability to supply such services within our leap and much of our non-leap capacities. Our revenues grew faster than we had initially expected, driven primarily by faster-than-expected installations, of high demand leap capacities.

Speaker #1: Non-leap also performed slightly better than initial expectations. And even though historically speaking, third quarters tend to be driven by seasonal strength, given the increasing mix of leap services, seasonality-related to underlying consumer buying patterns are becoming less of a factor in our overall loading patterns.

Ken Hsiang: Overall ATM profitability also improved more than anticipated, primarily as a result of higher than expected LEAP loading. Our EMS business's third quarter grew slightly ahead of our expectations. The third quarter continues to exhibit strong underlying seasonal demand for our SiP-related products. Our EMS business's profitability was in line with our expectations. Please turn to page 3, where you will find our Q3 consolidated results. For Q3, fully diluted EPS was TWD 5.84, and basic EPS came in at TWD 6.13. Year-to-date through Q3, our fully diluted EPS was TWD 13.40, and basic EPS was TWD 14.17. Consolidated net revenues reached a record TWD 244.2 billion, up 28% sequentially and 45% year-over-year. Gross profit was TWD 54 billion, with a gross margin of 22.1%, up 1.1 percentage points sequentially and 5 percentage points year-over-year. The sequential improvement stems from higher LEAP content in our ATM business.

Speaker #1: Overall, ATM profitability also improved more than anticipated, primarily as a result of higher-than-expected leap loading. Our EMS business's third quarter grew slightly ahead of our expectations.

Speaker #1: The third quarter continues to exhibit strong underlying seasonal demand for our SIP-related products. Our EMS business's profitability was in line with our expectations. Please turn to page 3, where you will find our third quarter consolidated results.

Speaker #1: For Q3, fully diluted EPS was $5.84, and basic EPS came in at $6.13. Year-to-date through Q3, our fully diluted EPS was $13.40, and basic EPS was $14.17.

Speaker #1: Consolidated net revenues reached a record $244.2 billion. Up 28% sequentially and 45% year-over-year. Gross profit was $54 billion, with a gross margin of 22.1%.

Speaker #1: Up 1.1 percentage points sequentially and 5 percentage points year-over-year. The sequential improvements stem from higher leap content in our ATM business. The annual improvement reflects higher ATM revenue and a more favorable NTD environment.

Ken Hsiang: The annual improvement reflects higher ATM revenue and a more favorable NT dollar environment. Operating expenses totaled TWD 20.8 billion, up TWD 1.8 billion sequentially and TWD 5.1 billion year-over-year, primarily driven by higher headcount, profit-sharing expenses, and further R&D spend to support LEAP initiatives. As a percentage of revenue, operating expenses declined sequentially by 1.5 percentage points and annually by 0.8 percentage points to 8.5%. Our OPEX percentage declined principally from LEAP revenue growth after previous periods of R&D investment. We currently see operating expenses continuing to rise on an absolute level, but on a percentage basis, should remain near the range demonstrated in the current year. This delivered an operating profit of TWD 33.1 billion, up 57% quarter-over-quarter and 151% year-over-year. We had an operating margin of 13.6%, expanding 2.5 percentage points sequentially and 5.8 percentage points annually. Rising company profitability was primarily driven by higher loading and expanding LEAP product mix.

Speaker #1: Operating expenses totaled $20.8 billion up 1.8 billion sequentially, and $5.1 billion year-over-year, primarily driven by higher headcount, profit-sharing expenses, and further R&D spend to support leap initiatives.

Speaker #1: As a percentage of revenue, operating expenses declined sequentially by 1.5 percentage points, and annually by 0.8 percentage points to 8.5%. Our opex percentage declined principally from leap revenue growth after previous periods of R&D investment.

Speaker #1: We currently see operating expenses continuing to rise on an absolute level. But on a percentage basis, should remain near the range demonstrated in the current year.

Speaker #1: This delivered an operating profit of $33.1 billion up 57% quarter over quarter and $151% year-over-year. We had an operating margin of 13.6%, expanding 2.5 percentage points sequentially and 5.8 percentage points annually.

Speaker #1: Rising company profitability was primarily driven by higher loading and expanding leap product mix. Non-operating loss totaled $0.4 billion. This amount includes net interest expenses of $2.6 billion, up 0.8 billion sequentially due to higher debt levels.

Ken Hsiang: Non-operating loss totaled TWD 0.4 billion. This amount includes net interest expenses of TWD 2.6 billion, up TWD 0.8 billion sequentially due to higher debt levels. Tax expense was TWD 4.8 billion. Our effective tax rate for the quarter was 14.8%. During the quarter, we saw beneficial changes to tax regulations and foreign currency movements, which positively affected our net deferred tax position. Given these changes, we now expect our full year effective tax rate to be between 16% to 17%. Net income for the quarter was TWD 27 billion, up 28% sequentially and 148% year-over-year. On page 4 is a graphical view of our consolidated quarterly performance. For Q3 2026, our ATM business represented 62% of our consolidated holding company revenues, while representing 91% of our operating profits. This is compared to 59% of consolidated holding company revenues, while representing 82% of operating profit in Q3 of last year.

Speaker #1: Tax expense was $4.8 billion. Our effective tax rate for the quarter was 14.8%. During the quarter, we saw beneficial changes to tax regulations and foreign currency movements, which positively affected our net deferred tax position.

Speaker #1: Given these changes, we now expect our full year effective tax rate to be between 16 to 17 percent. Net income for the quarter was $27 billion.

Speaker #1: Up 28% sequentially and 148% year-over-year. On page 4 is a graphical view of our consolidated quarterly performance. For the third quarter 2026, our ATM business represented 62% of our consolidated holding company revenues, while representing 91% of our operating profits.

Speaker #1: This is compared to 59% of consolidated holding company revenues, while representing 82% of operating profit in the third quarter of last year. As our ATM leap business continues to outgrow our other service areas, we continue to believe that our ATM business will continue to increase as a percentage of our overall business and profitability.

Ken Hsiang: As our ATM LEAP business continues to outgrow our other service areas, we continue to believe that our ATM business will continue to increase as a percentage of our overall business and profitability. On page 5 is our ATM P&L. For Q3 2026, we recorded record revenues for our ATM business of TWD 151.5 billion, up TWD 25.3 billion sequentially and TWD 51.2 billion annually, representing an increase of 20% sequential and 51% annual growth. Gross profit for our ATM business was TWD 46.4 billion, up TWD 11.9 billion sequentially and up TWD 23.7 billion year-over-year. ATM gross profit margin was 30.6%, up 3.3 percentage points sequentially and 8 percentage points annually, driven by higher operating leverage and a more favorable revenue mix. Particularly a higher mix of LEAP. Our gross margin has surpassed our historical structural margin ceiling.

Speaker #1: On page 5 is our ATM P&L. For the third quarter of 2026, we recorded record revenues for our ATM business of $151.5 billion, up 25.3 billion sequentially and 51.2 billion annually.

Speaker #1: Representing an increase of 20% sequential and 51% annual growth. Gross profit for our ATM business was $46.4 billion, up 11.9 billion sequentially and up 23.7 billion year-over-year.

Speaker #1: ATM gross profit margin was 30.6%, up 3.3 percentage points sequentially and 8 percentage points annually. Driven by higher operating leverage and a more favorable revenue mix.

Speaker #1: Particularly a higher mix of leap. Our gross margin has surpassed our historical structural margin ceiling. A theoretical structural margin for our ATM business would now substantially depend upon the amount of expected leap product mix.

Ken Hsiang: A theoretical structural margin for our ATM business would now substantially depend upon the amount of expected LEAP product mix. Given that our LEAP business continues to grow rapidly, our margin range now appears to be dynamic rather than fixed structurally. During Q3, operating expenses were TWD 16.2 billion, up TWD 1.5 billion sequentially and TWD 4.3 billion year-over-year. The sequential and annual increases in operating expenses are primarily related to higher overall labor costs and general R&D expenses. Our operating expense ratio was 10.7%, down 1 percentage point sequentially and 1.1 percentage points annually. We are approaching our near-term ATM OPEX percentage target as we balance cost in a more technology-led growth framework. During Q3, operating profit was TWD 30.2 billion, representing a sequential 53% increase of TWD 10.5 billion and a 178% annual increase of TWD 19.4 billion.

Speaker #1: Given that our leap business continues to grow rapidly, our margin range now appears to be dynamic, rather than fixed structurally. During the third quarter, operating expenses were 16.2 billion, up 1.5 billion sequentially and 4.3 billion year-over-year.

Speaker #1: The sequential and annual increases in operating expenses are primarily related to higher overall labor costs and general R&D expenses. Our operating expense ratio was 10.7%, down 1 percentage point sequentially and 1.1 percentage points annually.

Speaker #1: We are approaching our near-term ATM opex percentage target, as we balance cost and a more technology-led growth framework. During the third quarter, operating profit was 30.2 billion dollars, representing a sequential 53% increase of 10.5 billion and a 178% annual increase of 19.4 billion.

Ken Hsiang: Operating margin was 20%, up 4.3 percentage points sequentially and up 9.2 percentage points year-over-year. The NT dollar had a positive 0.5 sequential and a 3.3 annual percentage point impact to our gross and operating margins. On page 6, you'll find a graphical representation of our ATM P&L. The chart currently highlights our gross profit margin. Over the displayed timeframe, our margin improvement has been largely driven by improving utilization rates within traditional product lines and increasing LEAP product mix. In this timeframe from peak to trough, our gross profit margin percentage has climbed 8.7 percentage points. On page 7 is our ATM revenue by communications, computing, and consumer applications. LEAP services are primarily included within our computing applications, with a lesser amount being included in our communications applications. As can be seen here, our computing applications percentage continues to grow steadily.

Speaker #1: Operating margin was 20%, up 4.3 percentage points sequentially and up 9.2 percentage points year-over-year. The NTD had a positive 0.5 sequential and a 3.3 annual percentage point impact to our gross and operating margins.

Speaker #1: On page 6, you'll find a graphical representation of our ATM P&L. The chart currently highlights our gross profit margin. Over the displayed timeframe, our margin improvement has been largely driven by improving utilizations rates, within traditional product lines, and increasing leap product mix.

Speaker #1: In this timeframe, from peak to trough, our gross profit margin percentage has climbed 8.7 percentage points. On page 7 is our ATM revenue by communications, computing, and consumer applications.

Speaker #1: Leap services are primarily included within our computing applications, with a lesser amount being included in our communications applications. As can be seen here, our computing applications percentage continues to grow steadily.

Ken Hsiang: With a large amount of our LEAP services coming from computing, revenues for our computing application grew by 39%. Meanwhile, automotive, industrial, and consumer all grew by about 14%. Our communications application had the least amount of growth during the quarter, growing 8%. At this time, we continue to believe that our computing application will lead growth into 2027 and 2028. On page 8, you will find our ATM revenue by service type. At the beginning of the year, we believed that our test business, led by rapid expansion of our wafer sort business, would outpace growth of our assembly business. However, during the year, our assembly business has been showing even stronger than expected growth, especially as it relates to our traditional businesses. The demand for our test services continues to be robust. However, as with much of our business expansion, test capacities are awaiting new facilities.

Speaker #1: With a large amount of our leap services coming from computing, revenues for our computing application grew by 39%. Meanwhile, automotive industrial and consumer all grew by about 14%.

Speaker #1: Our communications application had the least amount of growth during the quarter, growing 8%. At this time, we continue to believe that our computing application will lead growth into 2027 and 2028.

Speaker #1: On page 8, you will find our ATM revenue by service type. At the beginning of the year, we believe that our test business, led by rapid expansion of our wafer sort business, would outpace growth of our assembly business.

Speaker #1: However, during the year, our assembly business has been showing even stronger than expected growth. Especially as it relates to our traditional businesses. The demand for our test services continues to be robust.

Speaker #1: However, as with much of our business expansion, test capacities are awaiting new facilities. As stated, during the previous quarter, we believe that both our assembly and test businesses will grow at similar rates during the year.

Ken Hsiang: As stated during the previous quarter, we believe that both our assembly and test businesses will grow at similar rates during the year. On page 9, you can see the Q3 results of our EMS business. Our EMS business has historically focused more on products closer to consumer-driven end markets. Many of these products are experiencing a higher component cost environment driven by shortages caused by the rapid AI build-out. These extra pass-through costs are increasing both our reported revenues and raw material costs. When netted, this ultimately negatively impacts our EMS business' margin performance. EMS revenues grew 42% sequentially and 35% annually to TWD 93.5 billion. Sequentially, our EMS business' gross margin decreased by 0.6 percentage points to 8.3%. This change was principally the result of higher pass-through component costs and product mix differences. EMS operating expenses increased by TWD 0.4 billion sequentially and by TWD 0.8 billion annually.

Speaker #1: On page 9, you can see the third quarter results of our EMS business. Our EMS business has historically focused more on products closer to consumer-driven end markets.

Speaker #1: Many of these products are experiencing a higher component cost environment, driven by shortages caused by the rapid AI build-out. These extra pasture costs are increasing both our reported revenues and raw material costs.

Speaker #1: When netted, this ultimately negatively impacts our EMS business's margin performance. EMS revenues grew 42% sequentially and 35% annually, to 93.5 billion dollars. Sequentially, our EMS business's gross margin decreased by 0.6 percentage points to 8.3%.

Speaker #1: This change was principally the result of higher pass-through component costs and product mix differences. EMS operating expenses increased by 0.4 billion dollars sequentially and by 0.8 billion dollars annually.

Ken Hsiang: Our Q3 EMS operating expense ratio was 5%, declining 1.5 percentage points sequentially and 0.6 percentage points annually. Operating margin came in at 3.3%, improving 0.9 percentage points sequentially and declining 0.4 percentage points annually. The sequential margin improvement is the result of product mix offset by the higher component cost environment. The annual decline is the result of higher component costs. Our EMS Q3 operating profit was TWD 3.1 billion, up TWD 1.5 billion sequentially and up TWD 0.6 billion annually. On the bottom of the page, you will find a graphical representation of our EMS revenue by application. Generally, the moves in the consumer and communication categories are related to the seasonality of the underlying products we service. Though the communications application percentage looks to have declined, on an absolute dollar basis, our EMS communications application grew quarterly.

Speaker #1: Our third quarter EMS operating expense ratio was 5%, declining 1.5 percentage points sequentially and 0.6 percentage points annually. Operating margin came in at 3.3%, improving 0.9 percentage points sequentially and declining 0.4 percentage points annually.

Speaker #1: The sequential margin improvement is the result of product mix offset by a higher component cost environment. The annual decline is the result of higher component costs.

Speaker #1: Our EMS third quarter operating profit was 3.1 billion dollars, up 1.5 billion dollars sequentially and up 0.6 billion dollars annually. On the bottom of the page, you will find a graphical representation of our EMS revenue by application.

Speaker #1: Generally, the moves in the consumer and communication categories are related to the seasonality of the underlying products we service. And though the communications application percentage looks to have declined, on an absolute dollar basis, our EMS communications application grew quarterly.

Ken Hsiang: Annually, the communications application percentage declined primarily due to underlying customer production timing changes. The growth in the computing application is largely driven by business related to AI accelerator products. From a longer-term perspective, we continue to pursue potential synergies between our ATM and EMS businesses to co-develop system-level solutions. By integrating critical EMS competencies with ATM technologies, we have the potential to optimize entire systems end-to-end, applying the same co-engineering disciplines that successfully scaled SiP architecture. As complexities increase at the die and package level, the system level will need to follow suit. On page 10, you will find key line items from our balance sheet. At the end of the quarter, we had cash equivalents, and current financial assets of TWD 107.9 billion. Our total interest-bearing debt increased by TWD 100.2 billion to TWD 406.5 billion. Total unused credit lines amounted to TWD 457.3 billion.

Speaker #1: Annually, the communications application percentage declined primarily due to underlying customer production timing changes. The growth in the computing application is largely driven by business-related to AI accelerator products.

Speaker #1: From a longer-term perspective, we continue to pursue potential synergies between our ATM and EMS businesses to co-develop system-level solutions. By integrating critical EMS competencies, with ATM technologies, we have the potential to optimize entire systems and to end.

Speaker #1: Applying the same co-engineering disciplines that successfully scaled SIP architecture. As complexities increase at the die and package level, the system-level will need to follow suit.

Speaker #1: On page 10, you will find key line items from our balance sheet. At the end of the quarter, we had cash, cash equivalents, and current financial assets, of 107.9 billion dollars.

Speaker #1: Our total interest-bearing debt increased by 100.2 billion to 406.5 billion. Total unused credit lines amounted to 457.3 billion. Our EBITDA for the quarter was 58 billion dollars.

Ken Hsiang: Our EBITDA for the quarter was TWD 58 billion. Our net debt-to-equity ratio this quarter was 66%. As expressed in previous quarters, the Q3 represents the near-term peak of our net debt to equity ratio. We expect this ratio to come down somewhat in the Q4. On page 11, you will find our equipment capital expenditures relative to our EBITDA. Machine and equipment capital expenditures for the Q3 in US dollars totaled $2.1 billion, of which $1 billion was used in packaging operations, $1.1 billion in testing operations, $41 million in EMS operations, and $5 million in interconnect materials operations and others. In addition to spending on machinery and equipment, during the quarter, we also spent TWD 1.8 billion on facilities and land.

Speaker #1: Our net debt-to-equity ratio this quarter was 66%. As expressed in previous quarters, the third quarter represents the near-term peak of our net debt-to-equity ratio.

Speaker #1: We expect this ratio to come down somewhat in the fourth quarter. On page 11, you will find our equipment capital expenditures relative to our EBITDA.

Speaker #1: Machine and equipment capital expenditures for the third quarter in US dollars totaled 2.1 billion dollars, of which 1 billion dollars was used in packaging operations, 1.1 billion dollars in testing operations, 41 million dollars in EMS operations, and 5 million dollars in interconnect materials operations and others.

Speaker #1: In addition to spending on machinery and equipment during the quarter, we also spent 1.8 billion dollars on facilities and land. We continue to believe that the growth of the company is highly dependent upon the execution of our various facility teams, to deliver new manufacturing space and install equipment in those buildings for scaled-up mass production.

Ken Hsiang: We continue to believe that the growth of the company is highly dependent upon the execution of our various facility teams to deliver new manufacturing space and install equipment in those buildings for scaled-up mass production. We believe the ability to accelerate CapEx at this point to be beneficial to the company, as it allows us to bring in new manufacturing capacity at a time when we are running full. Year to date, we have spent TWD 8 billion of CapEx, TWD 4.8 billion in equipment, and TWD 3.2 billion in facilities. We currently have 22 ongoing building projects in Taiwan. We expect more than half of these projects will start supporting some level of revenue from now through 2027. One final point before handing the presentation off. Our overall business outlook continues to be increasingly defined by our LEAP capacities.

Speaker #1: We believe the ability to accelerate CapEx at this point to be beneficial to the company as it allows us to bring in new manufacturing capacity at a time when we are running full.

Speaker #1: Year to date, we have spent 8 billion dollars of CapEx. 4.8 billion dollars in equipment and 3.2 billion dollars in facilities. We currently have 22 ongoing building projects in Taiwan.

Speaker #1: We expect more than half of these projects will start supporting some level of revenue from now through 2027. One final point before handing the presentation off.

Speaker #1: Our overall business outlook continues to be increasingly defined by our leading-edge capacities. And though our LEAP services are frequently tied to AI-related products, we see our LEAP capacities as the manufacturing basis for future-generations of products, not just AI-related.

Ken Hsiang: Though our LEAP services are frequently tied to AI-related products, we see our LEAP capacities as the manufacturing basis for future generations of products, not just AI related. Multi-chip interconnectivity on leading-edge devices has become the norm. We are in the midst of an evolution of electronics production where systemization is increasingly happening at the chip level. Simply put, what we are seeing is the next evolution of miniaturization. It bears repeating, the capacities we are putting in place are not specifically made for AI. AI products just so happen to need the performance benefits LEAP interconnections provide. Our investments today are laying the future groundwork for generations of products to come. I will hand the presentation over to Joseph to walk through the company's Q4 outlook.

Speaker #1: Multi-chip interconnectivity on leading-edge devices has become the norm. We are in the midst of an evolution of electronics production, where systemization is increasingly happening at the chip level, simply put, what we are seeing is the next evolution of miniaturization.

Speaker #1: It bears repeating the capacities we are putting in place are not specifically made for AI. AI products just so happen to need the performance benefits LEAP interconnections provide.

Speaker #1: Our investments today are laying the future groundwork for generations of products to come. I'll hand the presentation over to Joseph to walk through the company's Q4 outlook.

Joseph Tung: Thank you, Ken. Let me give everybody a one-quarter guidance. Based on our current business outlook and exchange rate assumption of one US dollar to 31.9 NT dollars, which remains the same as the Q3, management projects overall performance for the Q4 2026 to be as follows. On consolidated basis, in NT dollar terms, our consolidated Q4 revenue should grow by 6% to 8% quarter-over-quarter. Our consolidated Q4 gross margin should be between 23% to 24%. Our consolidated Q4 operating margin should be between 14.5% to 15.5%. For ATM business, in NT dollar terms, our ATM Q4 revenue should grow by 11% to 13% quarter-over-quarter. Our ATM Q4 gross margin should increase by 100 to 200 basis points quarter-over-quarter. For EMS, in NT dollar terms, our EMS Q4 revenue should be flattish quarter-over-quarter.

Speaker #2: Thank you, Ken. Let me give everybody a four-quarter guidance. Based on our current business outlook and exchange rate assumption of 1 US dollar to 31.9 NT dollars, which is remains the same as in third quarter, management projects overall performance for the fourth quarter of 2026 to be as follows.

Speaker #2: On consolidated basis, in NT dollar terms, a consolidated fourth quarter revenue should grow by 6 to 8 percent quarter over quarter. A consolidated fourth quarter gross margin should be between 23 to 24 percent.

Speaker #2: Our consolidated fourth quarter operating margin should be between 14 and a half to 15 and a half percent. For ATM business, in NT dollar terms, our ATM fourth quarter revenue should grow by 11 to 13 percent quarter over quarter.

Speaker #2: Our ATM fourth quarter gross margin should increase by 100 to 200 basis points quarter over quarter. For EMS, in NT dollar terms, our EMS fourth quarter revenue should be flattish quarter over quarter.

Joseph Tung: Our EMS Q4 operating margin should be around 2%. Now with that, we will open the floor for questions.

Speaker #2: Our EMS fourth quarter operating margin should be around 2 percent. Now, with that, we'll open the floor for questions.

Ken Hsiang: During the Q&A session that follows, we would appreciate it if your questions could be as clear and concise as possible, and asked singularly. I, as the moderator, will be receiving each question and repeating each asked question. After initial question, the participant may ask a follow-up question, clarifications of the earlier question, or another question entirely. Then we will move to the next participant. Participants may return to the queue for any additional questions and/or clarifications. Thank you.

Speaker #3: During the Q&A session that follows, we would appreciate it if your questions could be as clear and concise as possible and asked singularly. I, as the moderator, will be receiving each question and repeating each asked question.

Speaker #3: After initial question, the participant may ask a follow-up question, clarifications of the earlier question, or another question entirely. Then we will move to the next participant.

Speaker #3: Participants may return to the queue for any additional questions and/or clarifications. Thank you.

Operator: If you have any questions, please raise your hand. Our first question is from Sunny Lin of UBS. Sunny?

Speaker #4: If you have any questions, please raise your hand. Our first question is from Sunnyland of UBS. Sunny?

Sunny Lin: Hello, could you hear me okay?

Speaker #5: Hello. Could you hear me okay? Thank you very much for taking my questions and congrats on the very strong results. My first question is on your overall LEAP sales given the importance and your accelerating expansion.

Operator: Yes.

Sunny Lin: Thank you very much for taking my questions, and congrats on the very strong results. My first question is on your overall LEAP sales. Given the importance, and you accelerating expansion, any update on your LEAP sales for 2027? How should we think about the split, by full process, on-substrate outsourcing, and test?

Speaker #5: Any update on your LEAP sales for 2027, and how should we think about the split by full process, factory outsourcing, and test?

Joseph Tung: For 2027, we are expecting to remain as projected, to double our LEAP revenue for the year.

Speaker #2: For 2027, we're expecting to remain as we as projected to double our LEAP revenue for the year.

Sunny Lin: Well then, sorry, maybe just to follow up, and that will be my second question. Any update on your LEAP sales for 2026?

Speaker #5: Well, then sorry, maybe just to follow up, and that'll be my second question. So any update on your LEAP sales for 2026?

Joseph Tung: Yeah. As I said, we are upping our 2026 LEAP revenue from originally $3.7 billion that we mentioned last quarter to over $4 billion for this year.

Speaker #2: Yeah. As I said, we are upping our 2026 LEAP revenue from originally 3.7 billion that we mentioned last quarter to over 4 billion for this year.

Sunny Lin: Got it.

Speaker #5: Got it. And.

Ken Hsiang: Go ahead, please.

Speaker #3: Go ahead, please.

Sunny Lin: Sure. Sorry. Not sure if it is our connection issue, but I lost a part of the response. It is okay. We will check the transcript. My second question will be on the full process CoWoS. How is the overall ramp and yield for the key product H2 of this year? Looking into 2027, with your expansion, should we assume a more diversified customer base and product base?

Speaker #5: Sure. Sorry. Not sure if it's our connection issue, but I lost a part of the response, but it's okay. We will check the transcript.

Speaker #5: So my second question will be on the full process, co-ops, how's the overall ramp and yield for the key product second half of this year.

Speaker #5: And now, looking into 2027, what's your expansion? Should we assume a more diversified customer base and product base? And yeah.

Ken Hsiang: So-

Sunny Lin: Yeah

Ken Hsiang: Sunny, you are asking about our full process business, looking for any update in terms of the full process yield and such, right? Is that correct?

Speaker #3: So, Sunny, you're asking about our full process business, and then looking for any update in terms of the full process yield and such, right?

Sunny Lin: Yield, then the product base going to 2027.

Speaker #3: Is that correct?

Speaker #5: Yield and then the product base going to 2027.

Joseph Tung: I think for 2026, our full process revenue is on track, we are keeping a $300 million revenue for the year. I think everything else is going as planned. For next year, we are expecting over a billion dollar revenue coming from full process. Of course, the yield is at the level that we can get into mass production and major shipments.

Speaker #2: I think for 2026, our full process revenue is on track. And we're keeping a 300 million dollar revenue for the year. And I think the everything else is going on as planned.

Speaker #2: And for next year, we're expecting over a billion dollar revenue coming from full process. And of course, the yield is at the at the level that we can get into mass production and major shipments.

Sunny Lin: All right. Thank you very much.

Ken Hsiang: Any other question, Sunny? Thank you.

Speaker #5: All right. Thank you very much.

Sunny Lin: Yes. Thank you.

Speaker #3: Thank you.

Speaker #5: Yes. Thank you.

Operator: If you have any questions, please raise your hand. Our next question is from Gokul Hariharan of JPMorgan.

Speaker #4: If you have any questions, please raise your hand. Okay. Our next question is from Goku Harihara of JP Morgan.

Gokul Hariharan: Yeah. Hi, Joseph and Ken. Thanks for taking.

Speaker #6: Yeah. Hi. Joseph McCann. Thanks for taking.

Operator: Hello, Goku? Goku, I cannot hear you. Next question is from Haas Liu of BofA. Haas, can you hear me? Now we go back to Gokul Hariharan of JPMorgan.

Speaker #4: Hello, Goku. Goku, I cannot hear you. Okay. Next question is from Hasliu of BOA. Has. Can you hear me? Okay. Now we go back to Goku Harihara of JP Morgan.

Gokul Hariharan: Hello?

Speaker #6: Hello? Yeah. Hi. Can you hear me?

Operator: Hello, Gokul.

Gokul Hariharan: Yeah. Hi, can you hear me?

Operator: Yes.

Speaker #4: Yes.

Gokul Hariharan: Okay. All right. So, thank you very much for taking the question. Hi, Joseph and Ken. My first question is on gross margin. Could you talk a little bit about where we are seeing this upside in gross margin compared to our guidance range for Q3? Looks like a very clean 150, 200 basis points beat, and further upside in Q4 as well. Is it pricing or is it your full process is ramping up better in terms of margin? Secondly, on the same topic, I think now that we have already exceeded our previous structural range and obviously the product mix is also different, you are still expecting LEAP to grow faster than the overall product mix. What is the kind of gross margin range we should think about as we think about the next couple of years?

Speaker #6: Oh, okay. All right. So thank you very much for taking the question. Hi, Joseph. And again, my first question is on gross margin. Could you talk a little bit about where we are seeing this upside in gross margin compared to our guidance range for Q3?

Speaker #6: Looks like a very clean kind of 150, 200 basis points beat. And further upside, in Q4 as well. Is it pricing or is it your full process is ramping up better in terms of margin?

Speaker #6: And secondly, on the same topic, I think now that we have already exceeded our previous structural range, and obviously, the product mix is also different, you're still expecting LEAP to grow faster than the overall product mix.

Speaker #6: What is the kind of gross margin range we should think about as we think about the next couple of years?

Joseph Tung: Well, as we continue to ramp up our LEAP business, I think there will be further margin improvement in Q4 as well as going into next year. At this point, I think the so-called structural margin no longer applies because of the significant and rapidly changing business structures that we are having today. So if we are to comment on our margins, I think the first thing we will say is that the so-called structural margin ceiling has now become the base for us. For looking into next year, I think as we continue to ramp up our overall capacity, and also in a very friendly type of pricing environment, we believe that we will continue to see gross margin improvement on a quarterly basis from the base of 30%.

Speaker #3: Well, as we continue to ramp up our LEAP business, I think the there will be further margin improvement in fourth quarter as well as going into next year.

Speaker #3: I think at this point, I think the so-called structural margin no longer applies because of the significant and rapidly changing business structures that we're having today.

Speaker #3: So if we are to come on our margins, I think the first thing we will say is that the so-called structural margin ceiling has now become the base for us.

Speaker #3: And looking into next year, I think as we continue to ramp up our overall capacity, and also in a very friendly type of pricing environment, we believe that we will continue to see gross margin improvement on a quarterly basis from the base of 30%.

Joseph Tung: We will continue to see sequential improvement in our margin on a quarterly basis for next year as well.

Speaker #3: And we will continue to see sequential improvement in our margin. On a quarterly basis for next year as well.

Gokul Hariharan: Got it. Just to follow up there, if you look at the overall portfolio, maybe the LEAP testing aside, within packaging, what would be the highest gross margin that you are able to earn in any of the LEAP processes? It is already close to 40% for some of the processes, or that is too ambitious?

Speaker #6: Got it. Just to follow up there, if you look at the overall portfolio, maybe believe testing aside, within packaging, what would be the highest gross margin that you're able to earn in any of the LEAP processes?

Speaker #6: Is it already close to 40% for some of the processes? Or that is too ambitious?

Operator: Can you repeat the question?

Ken Hsiang: Gokul, you are looking for the potential highest performing margin for LEAP at this point? Is that your question?

Speaker #3: Goku, you're looking for the potential highest performing margin for LEAP at this point. Is that your question?

Gokul Hariharan: Yeah. Between the three or four components that are there, which one is the highest performing and what are those levels? Just to understand, what is the room for travel in terms of your overall gross margin, given your mix is clearly improving quite rapidly.

Speaker #6: Yeah. Within the three or four components that are there, which one is the highest performing and what are those levels? Just to understand, what is the room for travel in terms of your overall gross margin given your mixes clearly improving quite rapidly?

Joseph Tung: I do not think we want to comment on the different margins in different products or different packages. But I think the overall LEAP business, both on assembly and test, are margin accretive and we will continue to see improvement in the margin expansion.

Speaker #3: Well, I don't think we need we want to comment on the different margins in different products or different packages. But I think the overall, I think the overall LEAP business, both on assembly and test, our margin is accretive.

Speaker #3: And we'll continue to see improvement in the margin expansion.

Gokul Hariharan: Okay. Got it. My second question is just a follow-up on your LEAP full process revenue for next year. Joseph, I think you mentioned more than $1 billion, but that sounds quite conservative given you are only doing $300 million in the first quarter of ramp this year. Could you talk a little bit more about your engagements on the full process? Also, if you ramp up all these 22 projects that you are currently ramping up in terms of facilities, both greenfield and brownfield, what does it mean in terms of, let us say, you ramp it up in 2028? Any indication in terms of what is the investment required from a CapEx perspective, and what does that mean for our continued growth? Does it mean that you continue to grow at similar rates, even into 2028, not just for 2027?

Speaker #6: Okay. Okay. Got it. My second question is on just to follow up on your LEAP full process revenues. For next year, Joseph, I think you mentioned more than $1 billion.

Speaker #6: But that sounds quite conservative given you're already doing 300 million dollars in the first quarter of RAMP this year. Could you talk a little bit more about your engagements on the full process and also if you ramp up all these 22 projects that you are currently ramping up in terms of facilities, both greenfield and brownfield?

Speaker #6: What does it mean in terms of, let's say, you ramp it up in 2028? Any indication in terms of what is the investment required from a CapEx perspective?

Speaker #6: And what does that mean for a continued growth? Does it mean that you continue to grow at similar rates even into 2028, not just for 2027?

Ken Hsiang: Gokul, you are asking about a characterization of our full process business, and in certain regards, kind of a total return outlook. Is that correct?

Speaker #3: Goku, you're asking about a characterization of our full process business. And certain regards, it's kind of a total return outlook. Is that correct?

Gokul Hariharan: Yeah. Total growth outlook, given the very sharp ramp in the facilities.

Speaker #6: Yeah. Total growth outlook given the very sharp ramp in the facilities.

Joseph Tung: We do have multiple customer engagement at this point, although we are pretty much constrained by our capacity, and we are aggressively building that up. From the business outlook that we have so far, I think our resources are quite limited. Although the demand is there, we are still trying very hard to catch up in terms of supply. For next year, we are expecting that the demand can be way higher than what we will be able to deliver. Right now, we are still projecting over a billion dollar revenue coming from full process. I think the biggest bottleneck today is really skills and space, although many different areas we do find ourselves being constrained. Space is really one of the biggest constraints that we are facing today.

Speaker #3: Well, we do have multiple customers engagement at this point, although we are pretty much constrained by our capacity. And if we're aggressively building that up.

Speaker #3: So from the business outlook that we have so far, I think our resources are quite limited. So we are although the demand is there, but we're still trying very hard to catch up in terms of supply.

Speaker #3: And for next year, we are expecting that demand can be way higher than what we'll be able to deliver. So right now, we're still projecting over a billion dollar revenue coming from full process.

Speaker #3: So I guess that's I think the biggest bottleneck today is really still the space. Although many different areas we do have find ourselves being constrained.

Speaker #3: But space is really one of the biggest constraints that we're facing today.

Gokul Hariharan: Okay. That is helpful. Thank you.

Speaker #6: Okay. That's helpful. Thank you.

Operator: Our next question is from Laura Chen of Citigroup.

Speaker #2: Our next question is from Laura Chen of Citigroup.

Laura Chen: Hello. Hi, Grafton. Can you hear me?

Speaker #5: Hello. Hi, Gretchen. Can you hear me?

Operator: Yes.

Speaker #2: Yes.

Laura Chen: Yes. Hi, thank you for taking my questions. Just wanted to follow that USD 1 billion, like, the full process. Can you give us more color about that? What type of full process will see the contributions next year? Also, for our LEAP overall revenue, obviously, still more driven by the substrate part. But we do see that our companies have various different type of technology. Just wondering, can you give us more color about the growth breakdowns, and particularly in the full process, in the next 2 years?

Speaker #5: Yes. Hi. Thank you for taking my questions. Just wanted to follow that 1 billion US dollars the full process. Can you give us more color about that?

Speaker #5: What type of the full process we'll see the contributions next year? And also, for our LEAP overall revenue, so obviously, still more driven by the substrate part.

Speaker #5: But we do see that the our companies have various different type of technology. So just wondering, can you give us more color about the growth breakdowns in particularly in the full process, in the next two years?

Ken Hsiang: Hi, Laura Chen. This is Ken Hsiang.

Speaker #3: Hi, Laura. This is Ken. I don't think we have a lot of characterization in terms of what types of full process. I think when we talk about full process, it's generally much more customer-specific too.

Laura Chen: Yeah.

Ken Hsiang: I don't think we have a lot of characterization in terms of what types of full process. I think when we talk about full process, it's generally much more customer specific too.

Laura Chen: Okay.

Ken Hsiang: I think we probably cannot really comment that much on that at this point.

Speaker #3: I think we probably can't really comment that much on that at this point.

Laura Chen: Okay, sure. Understood. That also seems like the growth into next year is more coming from the substrate part?

Speaker #5: Okay. Sure. Understood. So that also seems like the growth into next year is more coming from the substrate part?

Joseph Tung: Yes. We are seeing very, very strong demand in test as well.

Speaker #3: Yes. But we are seeing very, very strong demand in test as well. And assembly and test, we are both seeing a very strong momentum.

Laura Chen: Sure.

Joseph Tung: Assembly and tests, we are both seeing a very strong momentum. Again, we are actually being constrained with our capacity buildup. We are still trying very hard to try to catch up with it. In terms of full process, I think, as I mentioned, we are moving ahead and on track. We hope that we can supply more for next year. At this point, we are conservatively looking at over TWD 1 billion revenue coming from that. There are some other new projects that we are entering. For example, CPO, and we are expecting over TWD 0.5 billion of revenue coming from CPO as well for next year. That will be included in our LEAP revenue.

Speaker #3: Again, we are actually being constrained with our capacity build-up. So we're still trying to very hard to try to catch up with it. In terms of full process, I think as I mentioned, we are moving ahead.

Speaker #3: And on track. And we hope that we can supply more for next year. And at this point, we are conservatively looking at about over a billion dollar revenue coming from that.

Speaker #3: And there are some other new projects that we're entering. For example, CPO. And we're expecting over half a billion of revenue coming from CPO as well for next year.

Speaker #3: That will be included in our LEAP revenue.

Laura Chen: Oh, thank you very much. That is actually my second question about to ask about the CPO, because we see that Jensen earlier last week, he mentioned about that 30 times the capacity will pick up for next year. I assume that also is in the LEAP revenues. But will we, going forward, to kind of split that revenues breakdown for better investor's understanding on that part growth?

Speaker #5: Oh. Thank you very much. That's actually my second question about to ask about the CPO because we see that the Jensen earlier last week, he mentioned about that 30 times the capacity will pick up for next year.

Speaker #5: So I assume that also gets in the LEAP revenues. But will we going forward to kind of a split that revenue breakdown for better investors' understanding on that part growth?

Joseph Tung: I think we are kind of breaking it down already in terms of OS, in terms of full process, in terms of wafer sort, and as I have mentioned, CPO.

Speaker #3: I think we will kind of breaking it down already in terms of OS, in terms of full process, in terms of wafer sort. And as I mentioned, CPO.

Laura Chen: Okay. Thank you. If I may also check on that, do we have any expectation on the CPO revenue contributions in 2 years?

Speaker #5: Okay. Thank you. So if I may also check on that, do we have any expectation on the CPO revenue contributions in two years?

Joseph Tung: In 2 to 3 years?

Speaker #3: In two to three years?

Laura Chen: Yes.

Speaker #5: Yes.

Joseph Tung: No, we have our projection for next year, but we will have better clarity after we finish what we are setting out to do for now.

Speaker #3: No. We have a projection for next year, but we will see we'll have better clarity after we finish what we're setting up to do for now.

Laura Chen: Okay. Sure. Looking forward to that. Thank you very much.

Speaker #5: Okay. Sure. Looking forward to that. Thank you very much.

Joseph Tung: Thank you.

Speaker #3: Thank you.

Operator: Our next question is from Heshu of BofA.

Speaker #2: Our next question is from HQ of BOA.

Haas Liu: Yes. Hi, can you hear me now? Sorry, I was disconnected.

Speaker #6: Yes. Hi. Can you hear me now? Sorry, I was disconnected. Okay. Yes. Thanks so much. For taking my questions. And congrats on the great results.

Operator: Yes.

Haas Liu: Okay. Yeah. Thank you so much for taking my questions, and congrats on the great results. I think just a quick follow-up on the structural gross margins, where you already reported Q3 IC ATM gross margins up to slightly higher than 30 percentage. With your LEAP business, that will be even higher in the next couple of quarters, and also your mainstream packaging and testing business utilization pricing are actually also improving. Can we use the Q3 gross margin as a base case going forward for your overall IP engine gross margin assumptions as long as the cycle holds? Thank you.

Speaker #6: I think just a quick follow-up on the structural growth margins. Where you already reported third-quarter ICADM growth margins. Up to slightly higher than 30 percentage.

Speaker #6: So with your LEAP business set to be even higher in the next couple of quarters, and also your mainstream packaging and testing business utilization pricing are actually also improving, can we use third-quarter gross margin as a base case going forward for your LEAP or for your overall ICADM gross margins assumptions as long as the cycle holds?

Speaker #6: Thank you.

Joseph Tung: Yes. I mentioned earlier that we are now using our structural margin ceiling as a base for next year onward. Yes.

Speaker #3: Yes. I mentioned earlier that we're now using our structural margin ceiling as a base for next year.

Haas Liu: Okay. We can use this kind of roughly 30% of the gross margins as the base case for next year. Got it.

Speaker #6: Okay. So we can use this kind of roughly 30 percent of the gross margins as the base case for next year. Got it. And then I think.

Joseph Tung: Right.

Haas Liu: And then

Joseph Tung: We will see quarterly improvement for next year as well.

Speaker #3: We will see quarterly improvement for next year as well.

Haas Liu: Okay. Sequential improvements. Second thing is just on CapEx. This year, you are already spending, based on what you reported just now, you have already been spending 80% to 90% of your annual budget, which has been revised up twice year to date to $10.5 billion on CapEx. Will you be able to provide some update on that since there are still a few months to end this year? Looking into 2027, how should we think about that trajectory, as one of your foundry partner also just now announced to buy another panel fab. Should we also expect similar acquisition of the fabs or the facilities by ASE as well, and also more equipment procurement in the next couple of quarters to meet your customers' demand?

Speaker #6: Okay. Sequential improvement. And then second thing is just on KPEX this year, you are already spending based on what you reported just now. You have already been spending 80 to 90 percent of your annual budget, which has been revised up price year to date to 10.5 billion US dollars on KPEX.

Speaker #6: Would you be able to provide some update on that since there's still a few months to end this year? And looking into 2027, how should we think about that trajectory as one of your foundry partner also just now announced to buy another panel fab.

Speaker #6: Should we also expect similar acquisition of the fabs or the facilities by ASE as well? And also more equipment procurement in the next couple of quarters to meet your customers' demand?

Joseph Tung: Yes. As I said, space continues to be one of the constraints that we have, and we are aggressively seeking for suitable existing plants for us to buy. But competition is pretty keen, and there are really not that many suitable factories for us to pursue at this point. So it is an ongoing effort that we are putting in.

Speaker #3: Yes. As I said, space continues to be a constraint. One of the constraints that we have and we are aggressively seeking for suitable existing plants for us to buy.

Speaker #3: But there are competition is pretty keen and they're really not that many suitable factories for us to pursue at this point. So it's an ongoing effort that we are putting in.

Haas Liu: Okay.

Joseph Tung: For this year’s CapEx, we are increasing our CapEx for the year from $10.5 billion to $11.5 billion now. We are adding another $1 billion.

Speaker #3: And also for this year's CAPEX, we are increasing our CAPEX for the year. 10.5 to 11.5 now. We're adding a billion, another billion. And of that billion, half of it will be for facilities as we continue to fit up our new factories.

Haas Liu: Yes.

Joseph Tung: Of that $1 billion, half of it will be for facilities as we continue to fit up our new factories. The other half will be for equipment, 60% of it will be for LEAP, and 40% will be for the mainstream advanced.

Speaker #3: And the other half will be for equipment and 60 percent of it will be for LEAP. And 40 percent will be for the mainstream.

Speaker #3: Advanced.

Haas Liu: Got it. On the overall pricing environment across your LEAP versus the mainstream packaging and testing business, how should we think about, since the supply demand is still pretty tight and that

Speaker #6: Got it. Got it. And just on the overall pricing environment across your LEAP versus the mainstream packaging and testing business, how should we think about since the supply demand is still pretty tight and that.

Ken Hsiang: Hey, sorry to stop you there.

Speaker #3: Sorry to stop you there. Sorry. Number three. It's always very easier. Thank you very much.

Haas Liu: Oh, okay.

Ken Hsiang: You are on queue number three.

Haas Liu: Oh, sure.

Ken Hsiang: Joseph is very eager.

Haas Liu: Sure. Thank you so much.

Ken Hsiang: Thank you very much.

Speaker #6: Sure. Thank you so much. Yeah. Okay. Yeah. I'll be back in the queue.

Haas Liu: Yeah. Okay. Yeah. I will be back in the queue.

Ken Hsiang: All right. Thank you.

Speaker #3: All right. Thank you.

Operator: Our next question is from Gokul Hariharan of JPMorgan.

Speaker #2: Our next question is from Goku Harihana. Of JP Morgan.

Gokul Hariharan: Hi. A couple of follow-ups from my side. Thanks for the opportunity. Joseph, I think you mentioned CapEx, TWD 11.5 billion, higher by TWD 1 billion. Could you give an opinion on what you are thinking CapEx is going to look like next year? Are we still in an upward-sloping curve for CapEx? Could you also talk a little bit about, are you entering into any prepayment arrangements or anything like that with customers, given a lot of this new CapEx seems to be targeted at some of the key customers itself? That is my first question.

Speaker #6: Yeah. Hi. A couple of follow-ups from my side. Thanks for the opportunity. So Joseph, I think you mentioned CAPEX 11.5, higher by a billion dollars.

Speaker #6: Could you give an opinion on what you're thinking CAPEX is going to look like next year? Are we still in an upward sloping curve for CAPEX?

Speaker #6: And could you also talk a little bit about are you entering into any prepayment arrangements or anything like that with customers given a lot of this new CAPEX seems to be targeted at some of the key customers itself?

Speaker #6: Yeah. That's my first question.

Ken Hsiang: Gokul, you are looking for an update on our CapEx outlook going forward?

Speaker #3: Okay. You're looking for an update on our CAPEX outlook going forward.

Gokul Hariharan: Yeah. Any funding arrangements that you have prepay.

Speaker #6: Yeah. And the kind of any funding arrangements that you have, prepay.

Ken Hsiang: And the funding sources around it.

Speaker #3: And the funding sources around it. Well, we'll continue to see very strong demand coming in. And we do have a very strong prospect for next year as well.

Joseph Tung: Well, we will continue to see very strong demand coming in, and we do have a very strong prospect for next year as well. So at this point, I believe the CapEx spending for next year will be even larger than this year. As we continue to ramp up our capacity. Also, in terms of R&D, we will continue to make the necessary investment to carry our missions. Funding-wise, we will continue to use whatever. We do have multiple cost-effective sources for us to raise funds to support our growth. I think, at this point, we will not be shy from making the necessary investment to support the expansion. So I think for next year, we will continue to see negative cash flow. But I think this thing will be balanced off in due course.

Speaker #3: So at this point, I believe the CAPEX spending for next year will be even larger than this year. And as we continue to ramp up our capacity, also in the terms of R&D, we will continue to make the necessary investment to carry our missions.

Speaker #3: Funding-wise, we will continue to use whatever we do have multiple cost-effective sources for us to raise funds to support our growth. I think at this point, we are not shy we will not be shy from making the necessary investment to support the expansion.

Speaker #3: So I think for next year, we will continue to see negative cash flow. But I think this thing will be balanced off in two courts.

Speaker #3: In terms of as I mentioned, multiple funding sources, that will also include some of the trade financing that we can arrange with the different customers.

Joseph Tung: As I mentioned, multiple funding sources, that will also include some of this trade financing that we can arrange with the different customers.

Gokul Hariharan: Understood. The second question is on the test business. Could you characterize the growth of the test business going into next year? Final test versus chip probing, and I think, how constrained are you on test versus packaging? If you think about a relative scale, is the constraints on test bigger than packaging from a facility or equipment perspective?

Speaker #6: Understood. And second question is on the test business. Could you characterize the growth of the test business going into next year? Final test versus chip probing, and I think how constrained are you on test versus packaging?

Speaker #6: If you think about a relative scale, is the constraints on test bigger than packaging from a facility or equipment perspective?

Ken Hsiang: Okay. You are looking for an update in terms of looking at the test business going into next year, and then in terms of the growth rates relative to what we are seeing in terms of the market. Is that correct?

Speaker #3: Okay. You're looking for an update in terms of looking at the test business going into next year and then in terms of the growth rates relative to what we're seeing in terms of the market.

Speaker #3: Is that correct?

Gokul Hariharan: Yeah. Or related to packaging and related to constraints related to packaging as well.

Speaker #6: Yeah. Or related to packaging and relative to constraints related to packaging itself.

Joseph Tung: I think same pattern will, like in Q3 and Q4 this year, it will repeat into next year. I think, in terms of assembly, the growth rate should outpace test, given the limited resource that we have. Also for tests, under the current resource constraints, we will need to prioritize our investment to more on wafer probe rather than final test.

Speaker #3: I think same pattern will likely in third and fourth quarter of this year, it will repeat into next year. I think in terms of assembly, it should be a growth ratio outpace test.

Speaker #3: Given the limited resource that we have. And also for tests, under the current resource constraints, we will need to prioritize our investment to more on wafer probe rather than final test.

Gokul Hariharan: Okay. Would you say test is more constrained in terms of your capacity versus demand compared to packaging, or it is largely similar?

Speaker #6: Okay. Would you say test is more constrained in terms of your capacity versus demand compared to packaging, or it is largely similar?

Joseph Tung: I think it is mostly space. I think the space that we use for assembly is more efficient than tests at this point. Given the constraint, we will put our priority on assembly, and for test will be for wafer sort.

Speaker #3: I think it's mostly space. I think the space that we use for assembly is more efficient than tests at this point. So given the constraint, we will allocate we will put our priority on assembly.

Speaker #3: And for tests, we'll be for final. For wafer sort.

Gokul Hariharan: Understood. That is very clear. Thank you.

Speaker #6: Understood. That's very clear. Thank you.

Operator: Our next question is from Haas Liu of BofA.

Speaker #2: Our next question is from Hasliu of BOA.

Haas Liu: Okay. Yeah. Hi. Thanks for taking my question again. I think just a quick follow-up on the CapEx. A couple of your peers, including the one in Korea and also your foundry partner, mentioned that they are preparing for a significant or meaningful step-up on the CapEx for next year. Given this is the third time of CapEx upper revision for the year for ASE in 2026, do you also expect a similar statement to hold for your CapEx for next year? You already mentioned that next year's CapEx will be higher than this year, but just wondering whether that kind of aggressiveness will be applied to ASE as well.

Speaker #6: Yeah. Hi. Thanks. For taking my question again. I think just a quick follow-up on the CAPEX. A couple of your peers, including the ones in Korea, and also your foundry partner, mentioned that they are preparing for a significant or meaningful step-up on the CAPEX for next year.

Speaker #6: Given this is the first the third time of CAPEX upper revision for the year for AUC in 2026, do you still do you also expect a similar statement to hold for your CAPEX for next year?

Speaker #6: You already mentioned that next year's CAPEX will be higher than this year, but just wondering whether that kind of aggressiveness will be applied to AUC as well.

Ken Hsiang: Hass, you are looking for a characterization of how we view next year's investments.

Speaker #3: So you're looking for a characterization of how we view next year's investments.

Haas Liu: Yeah. In a qualitative way as compared to your peers' comment for a meaningful step up or just significantly higher than this year's CapEx. Do those statements also hold for your CapEx outlook?

Speaker #6: Yeah. Qualitative way as compared to your peers' comment for a meaningful step-up or just significantly higher than this year's CAPEX. Does those statement do those statements also hold for your CAPEX outlook?

Ken Hsiang: Hass, generally, we do not necessarily view our own CapEx relative to competitors or, I guess, peers in the market. In general, we do see that CapEx going into next year, we do see a lot of opportunities in terms of the business that will be available to us. As Joseph previously mentioned, we will not be shy in terms of investing to get at that business. Does that answer your question?

Speaker #3: Haas, generally, we don't necessarily view our own CAPEX relative to a competitor's or, I guess, peers in the market. In general, we do see that CAPEX going into next year we do see a lot of opportunities in terms of the business that will be available to us.

Speaker #3: And as Joseph previously mentioned, we will not be shy in terms of investing to get at that business. Does that answer your question?

Haas Liu: Okay. Yeah. Just a related follow-up on the CapEx one is probably more specifically on the CPO that one of your key customers, last week in its Germany event, said it will hike CPO capacity by 15% next year at your facilities and then double again 2028. Would you be able to share more detail on that? What is your role in CPO packaging and testing? What is the related CapEx you expect to spend, and how should we expect or quantify the related revenue contribution from that part of the business in the next few years from CPO based on your customer's statement?

Speaker #6: Okay. Yeah. And just related follow-up on the CAPEX one, it's probably more specifically on the CPO that one of your key customers last week in East Germany event said it will hike CPO capacity by 15% next year at your facilities and then double again in 2028.

Speaker #6: Would you be able to share more detail on that? What is your role in CPO packaging and testing? What is the related CAPEX you expect to spend?

Speaker #6: And how should we expect or try to or quantify the related revenue contribution from that part of the business in the next few years from CPO based on your customers' statements?

Speaker #3: Haas, sure. Haas, you're looking for a clarification in terms of the potential joint press release that we had with our customer.

Ken Hsiang: Hass, you are looking for a clarification in terms of the potential joint press release that we had with our customer on CPO.

Haas Liu: Yeah

Ken Hsiang: had with our customer on CPO.

Haas Liu: Yes.

Speaker #6: Yeah. Yes.

Haas Liu: For next year. Okay. Yeah. My second question would be just on the pricing environment across your LEAP business and also the mature or mainstream packaging and testing business. It seems that the supply chain is actually happening across the board. Would you be able to share some detail on how that pricing improvement has been helping your gross margins improvement in Q3? Into 2027, how should we expect that the pricing negotiation with your customers at this stage to help your gross margins expansion beyond the product mix improvement?

Speaker #3: Yeah. Well, I don't think we will comment on specific product or specific customer. Everything is overall, we are the I think we are the most active participant in the whole CPO effort.

Speaker #3: And joining with our foundry partner as well as a customer. And just from the business that we are projecting to have from our customers, we're expecting to have generate more than half a billion worth of revenue coming from CPO.

Speaker #3: For next year.

Ken Hsiang: For next year. My second question would be just on the pricing environment across your LEAP business and also the mature or mainstream packaging and testing business. It seems that the supply chain is actually happening across the board. Would you be able to share some detail on how that pricing improvement has been helping your gross margins improvement in Q3? Into 2027, how should we expect that the pricing negotiation with your customers at this stage to help your gross margins expansion beyond the product mix improvement?

Speaker #6: For next year. Okay. Yeah. And my second question, would be just on the pricing environment. Across your lead business and also the mature or mainstream packaging and testing business, it seems that the supply chain is actually happening across the board.

Speaker #6: Would you be able to share some detail on how that pricing improvements has been helping your gross margins improvement in third quarter? And into 2027, how should we expect that the pricing negotiation with your customers at this stage to help your gross margins expansion beyond the product mix improvement?

Joseph Tung: Well, I will not comment on pricing except we will continue to look for the most suitable pricing strategy depending on the situation. All I can say is overall, I think both for LEAP as well as for general market, I think we are in a very pricing-friendly environment at this point.

Speaker #3: Well, I will not comment on pricing except we will continue to look for the most suitable pricing strategy depending on the situation. And all I can say is overall, I think both for lead as well as for general market, I think we are in a very pricing-friendly environment at this point.

Haas Liu: Okay. Could you also just try to quantify the-

Speaker #6: Okay. Okay. And could you also just try to quantify the.

Ken Hsiang: I think you are on question number 4.

Speaker #3: I think you're on question number four.

Haas Liu: Okay. I thought you just followed that. Okay. Yeah. Okay. Thank you.

Speaker #6: Okay. I thought you just thought of that. Okay. Yeah. Okay. Okay.

Ken Hsiang: Okay. Thank you.

Speaker #3: Thank you.

Operator: Our next question is from Charlie Chan of Morgan Stanley.

Speaker #2: Our next question is from Charlie Chan of Morgan Stanley.

Charlie Chan: Oh, hi. Good afternoon, Joseph, Ken, and Iris. Thanks for taking my question. Just a quick follow-up. Thanks for disclosing your CPO revenue. If we may, can we know roughly, is the testing parts, for example, insertion three, insertion four, a bigger revenue contribution, or the on-substrate is the bigger contribution for that $0.5 billion revenue contribution?

Speaker #5: Oh, hi. Good afternoon. Joseph, Ken, and Irish. I think we're taking my question. So just a quick follow-up, right, on thanks for disclosing your CPO revenue.

Speaker #5: So if we may, can we know roughly is the testing part, for example, insertion 3, insertion 4, bigger revenue contribution or the unsubstrate is a bigger contribution for that?

Speaker #5: 0.5 billion US dollars revenue contribution.

Joseph Tung: I will not be able to comment on that, sorry.

Speaker #3: I won't be able to comment on that. Sorry.

Charlie Chan: Okay, no worries. Secondly, as you mentioned, you wouldn't hesitate to invest in space, capacity, whatever, to gain share, right? But recently, there seems to be some industry dynamic that one of TSMC's subsidiaries, they are also getting into the on-substrate business, right? Do you think there is demand overflow, or it is a real competition to your on-substrate business?

Speaker #5: Okay. No worries. Yeah. And secondly, I think the manager mentioned you wouldn't hesitate to continue to invest in space capacity whatever to gain share, right?

Speaker #5: But recently, there seems to be some industry dynamic that one of TSMC's subsidiary they are also getting into the unsubstrate business, right? Do you think that is demand overflow or it's kind of a real competition to your unsubstrate business?

Ken Hsiang: Charlie, you're asking for commentary in terms of competition within our LEAP business.

Speaker #3: Charlie, you're asking for commentary in terms of competition within our lead business.

Charlie Chan: Yeah. Because now it seems like demand is not an issue. But my question is that, who seems to have the space can really gain share, right? Is that a fair comment? Because one of TSMC's subsidiaries ordering lots of equipment. So we are a little bit worried whether there's a gain share at expense of ASE.

Speaker #5: Yeah. Because now it seems like demand is not an issue. But my question is that who seems to have the space can really gain share, right?

Speaker #5: Is that a fair comment? Because one of the TSMC's subsidiaries kind of ordering lots of equipment. So we are a little bit worried whether there's kind of a gaining share expense of ASE.

Joseph Tung: It's kind of sensitive to talk about a foundry's subsidiary situation. All I can say is, given the scale

Speaker #3: It's kind of sensitive to talk about a foundry partner's subsidiary situation and all I can say is given the scale I think we are really the dominant player in this field.

Charlie Chan: Right

Joseph Tung: I think we are really the dominant player in this field. Whatever competition, I think is out of necessity from our foundry partner as well as our customers.

Speaker #3: And whatever competition, I think it's out of necessity. From a foundry partner as well as our customers. So I don't think at this point, I don't think it will move the needle that much.

Charlie Chan: Right.

Joseph Tung: At this point, I don't think it will move the needle that much.

Joseph Tung: In terms of the overall market share kind of situation. As I said, we are still in a catch-up mode, trying to supply as much as we can to meet the demand. I think that's all I can say at this point.

Speaker #3: In terms of overall market share, kind of situation. As I said, we are still in a catch-up mode trying to supply as much as we can to meet the demand.

Speaker #3: So I think that's all I can say at this point.

Charlie Chan: Got you. At least there wouldn't be any so-called price competition, right? It's like demand is too big, whoever can squeeze more space or capacity can gain share, but don't worry about pricing and margin.

Speaker #5: Gotcha. At least that there wouldn't be any so-called price competition, right? It's like demand is too big. Whoever can squeeze more space or capacity can gain share, but don't worry about pricing and margin.

Joseph Tung: I think the sheer scale difference is, I don't think a price war will be created.

Speaker #3: I think the sheer scale difference is I don't think a price war will be created.

Charlie Chan: Makes sense. So, thank you. If I may, non-AI. We start to pick up some negative points on PC and smartphone order cuts at the wafer front end. Except for iOS ecosystem. Can you share your observation about non-AI part of business and how that is going to impact your midterm outlook? Thank you.

Speaker #5: Makes sense. Yeah. So thank you. And if I may, now AI, so we start to pick up some negative points on PC and smartphone order cards at the wafer front end.

Speaker #5: So except for iOS ecosystem, right? So those are can you share your observation about non-AI part of business and how that is going to impact your kind of meter outlook?

Speaker #5: Thank you.

Joseph Tung: Well, at least for this year, I think the general market growth is good ahead of our expectation in the earlier part of the year. I think we will have more than 20% growth in our general market business as well. We all understand that cell phone and PC is going through a very soft period

Speaker #3: Well, at least for this year, I think the general market growth is way ahead of our expectation in the earlier part of the year.

Speaker #3: I think we will have more than 20% growth in our general market business as well. That's largely we all understand that cell phone and PC is going through a very soft period.

Joseph Tung: given the high component prices. That is hurting the overall demand. That is more than compensated by the recovery of our automotive and industrial, and more importantly, AI adjacent chips requirement. We are seeing very strong growth in this year for general market. We are expecting that to happen again next year as well.

Speaker #3: Given the high component prices that's kind of hurting the overall demand. But that is more than compensated by the recovery of automotive and industrial.

Speaker #3: And more importantly, AI-adjacent chips, requirement. So we are seeing we're seeing very strong growth in this year for general market. And we're expecting that to happen again in next year as well.

Charlie Chan: Okay. Thank you. Sorry for asking questions so late. I was experiencing some technical issue, but thanks for all the answers. Thank you.

Speaker #5: Okay. Thank you. Yes. Sorry for kind of asking questions so late. I was experiencing some technical issue. But thanks for all the answers. Thank you.

Joseph Tung: No problem. Thank you.

Speaker #3: No problem. Thank you.

Charlie Chan: Thank you.

Speaker #5: Thank you.

Operator: Next question is from Sunny Lin of UBS.

Speaker #2: Next question is from Summer Lynn of UBS.

Sunny Lin: Hello. Thank you for taking my follow-ups. I have a question on a very high level, what is your view on CPO versus NPO? Besides CPO, could ASE also capture the opportunity in NPO as well? Based on your commentary, will it be fair to say that based on the current visibility, it is fair to say that 2027 CPO will be able to ramp up, even with still some technical challenges or optimization that the industry need to go through?

Speaker #4: Hello. Thank you for taking my follow-ups. I have a question on very high-level what your view on CPO versus NPO. Besides CPO, could ASE also capture the opportunity in NPO as well?

Speaker #4: And then based on your commentary, would it be fair to say that based on the current visibility, it's fair to say that 2027 CPO would be able to ramp up even with still some technical challenges or optimization that the industry need to go through?

Ken Hsiang: Sunny, you are looking for an update in terms of how we view the CPO versus NPO market, then our capability to ramp up to support CPO going forward. Is that correct?

Speaker #3: Sunny, you're looking for an update in terms of how we view the CPO versus NPO market. And then our capability to ramp up to support CPO going forward.

Sunny Lin: Yeah. Or maybe just CPO as a technology, is it mature enough to start mass production for your key clients in 2027?

Speaker #3: Is that correct?

Speaker #4: Yeah. Or maybe just CPO as a technology isn't mature enough to start mass production. For your key clients in 2027.

Joseph Tung: Yes. As I mentioned earlier on CPO, we are expecting mass production. We already started mass production in Q4, that will continue into 2027. As we are projecting at this point, we are looking at over half a billion worth of revenue coming from CPO. In terms of NPO and CPO, I think they will both coexist, it is just a matter of difference in terms of overall performance between the two different types of packages.

Speaker #3: Yes. As I mentioned earlier on, CPO, we're expecting mass production we already started mass production in quarter four. And that will continue into 2027.

Speaker #3: And as we are projecting at this point, we're looking at over half a billion worth of revenue coming from CPO. In terms of NPO and CPO, I think that they were both coexist.

Speaker #3: And it's just a matter of difference in terms of overall performance. Between the two different types of packages.

Sunny Lin: And for NPO, will ASE be able to capture as well?

Speaker #4: And for NPO, will ASE be able to capture as well?

Joseph Tung: If there is real demand, yes, of course, we will be the major player in that.

Speaker #3: If there is real demand, yes, of course, we will be the major player in that.

Sunny Lin: Got it. Thank you. And a quick question on EMS. Looking at the share, seasonality is a bit different. How should we think about the growth going to Q1? Typically, Q1 should be a down quarter as the build moderates. But this time around, the flagship smartphone clients are also launching for lower-end models are going to early 2027. All things considered, how should we think about your EMS business maybe going to H1 2027?

Speaker #4: Got it. Thank you. And a quick question on EMS. So looking at the shared scenario is a bit different. And how should you think about the growth going to Q1?

Speaker #4: Typically, Q1 should be a down quarter as the bill moderates. But this time around, the flash response for clients also launching for lower-end models are going to early 2027.

Speaker #4: And so all things considered, how should we think about your EMS versus maybe going to a first half of 2027?

Ken Hsiang: Sunny, you are looking for the seasonal pattern of our EMS business as potential underlying customer products change their timing of release. Is that correct?

Speaker #3: Sunny, you're looking for the seasonal pattern of our EMS business as under potential underlying customer products change their timing of release. Is that correct?

Sunny Lin: Right. Thank you.

Speaker #4: Right. Thank you.

Joseph Tung: Well, we will continue to expect some growth going into 2027 as well for EMS business. I think the main focus will be on the high-performance computing. At this point, it represents roughly mid-teens of our overall EMS revenue, and we are seeing that ramping up pretty rapidly. Communication-wise or consumer-wise, at this point, relative to computing, it is weaker. All in all, I think our EMS will continue to move into optical, silicon photonics, and power-related type of devices. Also, of course, AI-related business that we will be focusing on. Yes, we do expect further growth, particularly in the AI-related part of the business.

Speaker #3: Well, we will continue to expect for some growth in going into 2027 as well for EMS business. I think the main focus will be on the high-performance computing and at this point, it represents roughly meetings of our overall EMS revenue.

Speaker #3: And we're seeing that ramping up pretty rapidly. And communication-wise or consumer-wise, it will be at this point is relative to computing is weaker. But all in all, I think the our EMS will continue to move into optical, silicon photonics, and power-related type of devices.

Speaker #3: And also, of course, AI-related business that will be focusing on. So yes, we do expect further growth, particularly in the AI-related part of the business.

Sunny Lin: Got it. Thank you.

Speaker #4: Got it. Thank you.

Joseph Tung: Thank you.

Speaker #3: Thank you.

Operator: Next, we have Haas Liu of BofA coming back again. Haas?

Speaker #2: Next. We have Has Liu of BOA coming back again. Has.

Haas Liu: Okay. Hi. Yes, thanks. It is me again. I am just wondering if you could provide more clarity on the gross margins improvement Q3. How much of that is coming from the product mix improvement versus the like-for-like price hike across your LEAP versus in the mainstream business and your utilization improvement? Because if we look at the trend in the past eight quarters or seven quarters, you already have experienced two step-ups on the gross margins back in H2 last year, and now in Q3 this year, there is another step-up. As you accelerate your LEAP business, I think going forward, in addition to the question I just have now on the Q3 gross margins breakdown from the relative benefits.

Speaker #1: Okay. Hi. Yes. Thanks. It's me again. I'm just wondering if you could provide more clarity on the gross margins improvements third quarter. How much of that is coming from the product mix improvement versus the like-for-like price hike across your lead versus and the mainstream business?

Speaker #1: And your utilization improvement. Because if we look at the trend in the past eight quarters or seven quarters, that you already have experienced two step-ups on the gross margins back in the second half last year.

Speaker #1: And now in third quarter this year, there's another step-up. So as you accelerate your lead business, I think going forward, in addition to the question I just had now on the third quarter gross margins breakdown on the from the relative benefits, I think just going forward, may I also check on your expectation whether that kind of gross margins improvement will further accelerate through 2027?

Haas Liu: I think just going forward, may I also check on your expectation whether that kind of gross margins improvement will further accelerate through 2027?

Ken Hsiang: Haas, you are looking for further clarification in terms of what has caused our margin pickup during Q3, and then whether those types of improvements are sustainable going forward. Is that correct?

Speaker #3: Hash, you're looking for further clarification in terms of what has caused our margin pickup during the third quarter. And then whether those types of improvements are sustainable going forward.

Haas Liu: Yes, that is right.

Speaker #3: Is that correct?

Speaker #1: Yes. That's correct.

Joseph Tung: Well, Q3 margin improvement is largely because of the LEAP ramp-up as well as our overall improvement in utilization across the board, including the general market or mainstream packages and tests. Going forward, as we continue to ramp up our LEAP business and having a healthy growth on the general market business as well, I think, yes, we will continue to see sequential improvement in our margin on a quarterly basis going into next year.

Speaker #3: Well, third quarter, margin improvement is largely because of the lead ramp-up as well as our overall improvement in utilization across the board, including the general market or mainstream packages and tests.

Speaker #3: And going forward, as we continue to ramp up our lead business and having a healthy growth on the general market business as well, I think, yes, we will continue to see sequential improvement in our margin.

Speaker #3: On a quarterly basis, going into next year.

Haas Liu: Okay. I think just a follow-up on the application mix that in Q3, your computing business seeing a nice ramp. Would you be able to share more detail on that? What are the key applications are you targeting in that segment in the next one to two years between GPUs, CPUs, ASICs, and networking switches?

Speaker #1: Okay. I think just a follow-up on the application mix. That's in third quarter, your computing business seeing a nice ramp. Would you be able to share more detail on that?

Speaker #1: And what are the key what are the key applications are you targeting in that segment in the next one to two years between GPUs, CPUs, ASICs, and networking switches?

Ken Hsiang: Hoss, you are looking for an answer in terms of the composition of our compute business? Is that correct?

Speaker #3: Hash, you're looking for an answer in terms of the composition of our compute business. Is that correct?

Haas Liu: That is right. And your targeted application in the next few years between GPUs, CPUs, ASICs, and networking switches.

Speaker #1: That's correct. Yeah. And you're targeted application in the next few years between GPUs, CPUs, ASICs, and networking switches.

Ken Hsiang: I do not know if we can comment so specifically. I think from a targeting perspective, we should be targeting everything.

Speaker #3: I don't know if we can comment so specifically yeah. I think from a targeting perspective, we should be targeting everything.

Haas Liu: Okay.

Speaker #1: Okay.

Ken Hsiang: We cannot be particularly specific. But in terms of our technologies, we do hope to be able to address all applicable products within that high-performance computing section.

Speaker #3: We can't be particularly specific. But in terms of our technologies, we do hope to be able to address all applicable products within that high-performance computing section.

Haas Liu: Got it. Thank you very much.

Speaker #1: Got it. Thank you very much.

Ken Hsiang: Do you have another question, Hoss?

Speaker #3: Do you have another question, Hash?

Haas Liu: No, I am good for now. Thank you.

Speaker #1: I'm good for now. Thank you.

Ken Hsiang: Okay. I think you are the last question then.

Speaker #3: Okay. I think you're the last you're the last question then. Do we have any other questions online?

Haas Liu: Oh, okay.

Ken Hsiang: Do we have any other questions online?

Operator: No. No more questions.

Speaker #2: No. No more questions.

Ken Hsiang: Thank you, everyone, for attending the call. Joseph, do you want to?

Speaker #3: Thank you, everyone. For attending the call, Joseph, do you want to. We had a fabulous third quarter, and we'll continue to see strong momentum going into fourth and into next year.

Joseph Tung: We had a fabulous Q3, and we will continue to see strong momentum going to Q4 and into next year. We will make the necessary investment to support the overall expansion, and we will continue to expect good results for Q4 as well as for next year. Thank you very much.

Speaker #3: We will make the necessary investment to support the overall expansion. And we'll continue to expect the results for first quarter as well as for next year.

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