ASE Technology Holding Co., Ltd. Reports Its Unaudited Consolidated Financial Results for the Second Quarter of 2023

TAIPEI, July 27, 2023 /PRNewswire/ -- ASE Technology Holding Co., Ltd. (TWSE: 3711, NYSE: ASX) ("We", "ASEH", or the "Company"), the leading provider of semiconductor assembly and testing services ("ATM") and the provider of electronic manufacturing services ("EMS"), today reported its unaudited net revenues^[1] of NT$136,275 million for 2Q23, down by 15% year-over-year and up by 4% sequentially. Net income attributable to shareholders of the parent for the quarter totaled NT$7,740 million, down from NT$15,988 million in 2Q22 and up from NT$5,817 million in 1Q23.  Basic earnings per share for the quarter were NT$1.80 (or US$0.118 per ADS), compared to NT$3.69 for 2Q22 and NT$1.36 for 1Q23.  Diluted earnings per share for the quarter were NT$1.76 (or US$0.115 per ADS), compared to NT$3.61 for 2Q22 and NT$1.30 for 1Q23.

RESULTS OF OPERATIONS

2Q23 Results Highlights – Consolidated

• Net revenues from packaging operations, testing operations, EMS operations, and others represented approximately 46%, 9%, 44%, and 1% of the total net revenues for the quarter, respectively.

• Cost of revenues was NT$114,534 million for the quarter, up from NT$111,552 million in 1Q23.

• Gross margin increased by 1.2 percentage points to 16.0% in 2Q23 from 14.8% in 1Q23.

• Operating margin was 6.9% in 2Q23, compared to 5.9% in 1Q23.

• In terms of non-operating items:

• Income before tax was NT$10,111 million in 2Q23, compared to NT$7,870 million in 1Q23. We recorded income tax expenses of NT$1,914 million for the quarter, compared to NT$1,777 million in 1Q23.

• Net income attributable to shareholders of the parent was NT$7,740 million in 2Q23, compared to NT$15,988 million in 2Q22 and NT$5,817 million in 1Q23.

• Our total number of shares outstanding at the end of the quarter was 4,376,430,787, including treasury stock owned by our subsidiaries in 2Q23. Our 2Q23 basic earnings per share of NT$1.80 (or US$0.118 per ADS) were based on 4,293,489,282 weighted average numbers of shares outstanding in 2Q23. Our 2Q23 diluted earnings per share of NT$1.76 (or US$0.115 per ADS) were based on 4,342,947,820 weighted average number of shares outstanding in 2Q23.

2Q23 Results Highlights – ATM

• Net revenues were NT$76,108 million for the quarter, down by 20% year-over-year and up by 4% sequentially.

• Cost of revenues was NT$59,947 million for the quarter, up by 2% sequentially.

• Gross margin increased by 1.1 percentage points to 21.2% in 2Q23 from 20.1% in 1Q23.

• Operating margin was 9.7% in 2Q23, compared to 8.7% in 1Q23.

2Q23 Results Highlights – EMS

• Net revenues were NT$60,424 million, down by 9% year-over-year and up by 5% sequentially.

• Cost of revenues for the quarter was NT$54,785 million, down by 8% year-over-year and up by 3% sequentially.

• Gross margin increased by 1.4 percentage points to 9.3% in 2Q23 from 7.9% in 1Q23.

• Operating margin was 3.5% in 2Q23, compared to 2.3% in 1Q23.

LIQUIdiTY AND CAPITAL RESOURCES

• Capital expenditures in 2Q23 totaled US$209 million, of which US$107 million was used in packaging operations, US$60 million in testing operations, US$33 million in EMS operations and US$9 million in interconnect materials operations and others.

• Total unused credit lines amounted to NT$384,648 million as of June 30, 2023.

• Current ratio was 1.20 and net debt to equity ratio was 0.41 as of June 30, 2023.

• Total number of employees was 93,950 as of June 30, 2023, compared to 94,172 as of March 31, 2023.

Business Review

Customers
ATM Basis

• Our five largest customers together accounted for approximately 41% of our total net revenues in both 2Q23 and 1Q23. One customer accounted for more than 10% of our total net revenues in 2Q23.

• Our top 10 customers contributed 57% of our total net revenues in 2Q23, compared to 56% in 1Q23.

• Our customers that are integrated device manufacturers or IDMs accounted for 33% of our total net revenues in 2Q23, compared to 35% in 1Q23.

EMS Basis

• Our five largest customers together accounted for approximately 72% of our total net revenues in 2Q23, compared to 67% in 1Q23. One customer accounted for more than 10% of our total net revenues in 2Q23.

• Our top 10 customers contributed 79% of our total net revenues in 2Q23, compared to 75% in 1Q23.

About ASE Technology Holding Co., Ltd.
ASEH is the leading provider of semiconductor manufacturing services in assembly and test. The Company develops and offers complete turnkey solutions covering front-end engineering test, wafer probing and final test, as well as packaging, materials and electronic manufacturing services through USI with superior technologies, breakthrough innovations, and advanced development programs. With advanced technological capabilities and a global presence spanning Taiwan, China, South Korea, Japan, Singapore, Malaysia, Vietnam, Mexico, and Tunisia as well as the United States and Europe, ASEH has established a reputation for reliable, high quality products and services. 
For more information, please visit our website at https://www.aseglobal.com.

Safe Harbor Notice
This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied by the forward-looking statements for reasons including, among others, risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent shift in United States trade policies; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors.  For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including the 2022 Annual Report on Form 20-F filed on April 10, 2023.

Supplemental Financial Information
(Unaudited)

Consolidated Operations

	2Q23	1Q23	2Q22
EBITDA (NT$ million)	25,770	23,765	35,211

ATM Operations

	2Q23	1Q23	2Q22
Net Revenues (NT$ million)	76,108	73,319	94,998
Revenues by Application
Communication	49 %	50 %	52 %
Computing	18 %	17 %	16 %
Automotive, Consumer & Others	33 %	33 %	32 %
Revenues by Type
Bumping, Flip Chip, WLP & SiP	41 %	41 %	43 %
Wirebonding	34 %	34 %	35 %
Others	7 %	8 %	6 %
Testing	16 %	16 %	15 %
Material	2 %	1 %	1 %
Capacity & EBITDA
CapEx (US$ million)*	176	197	461
EBITDA (NT$ million)	21,643	20,552	30,940
Number of Wirebonders	25,880	25,799	25,876
Number of Testers	5,495	5,447	5,194

EMS Operations

	2Q23	1Q23	2Q22
Net Revenues (NT$ million)	60,424	57,733	66,218
Revenues by Application
Communication	34 %	35 %	35 %
Computing	8 %	8 %	13 %
Consumer	33 %	29 %	28 %
Industrial	15 %	17 %	15 %
Automotive	8 %	9 %	8 %
Others	2 %	2 %	1 %
Capacity
CapEx (US$ million)*	33	32	53

* Capital expenditure excludes building construction costs.

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Income Data
(In NT$ million, except per share data)
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2023		Mar. 31 2023		Jun. 30 2022		Jun. 30 2023		Jun. 30 2022
Net revenues
Packaging	61,846		60,029		78,394		121,875		146,777
Testing	12,292		11,407		13,760		23,699		26,343
EMS	60,384		57,731		66,213		118,115		127,376
Others	1,753		1,724		2,072		3,477		4,334
Total net revenues	136,275		130,891		160,439		267,166		304,830
Cost of revenues	(114,534)		(111,552)		(126,051)		(226,086)		(241,971)
Gross profit	21,741		19,339		34,388		41,080		62,859
Operating expenses
Research and development	(6,218)		(5,572)		(5,795)		(11,790)		(11,157)
Selling, general and administrative	(6,111)		(6,072)		(7,987)		(12,183)		(14,983)
Total operating expenses	(12,329)		(11,644)		(13,782)		(23,973)		(26,140)
Operating income	9,412		7,695		20,606		17,107		36,719
Net non-operating income and expenses
Interest expense - net	(1,100)		(1,076)		(702)		(2,176)		(1,274)
Foreign exchange gain (loss)	(1,188)		545		(1,301)		(643)		(2,405)
Gain on valuation of financial assets and liabilities	1,914		103		1,543		2,017		2,949
Gain (loss) on equity-method investments	326		(12)		486		314		685
Others	747		615		504		1,362		1,125
Total non-operating income  and expenses	699		175		530		874		1,080
Income before tax	10,111		7,870		21,136		17,981		37,799
Income tax expense	(1,914)		(1,777)		(4,479)		(3,691)		(7,757)
Income from operations and before non-controlling interests	8,197		6,093		16,657		14,290		30,042
Non-controlling interests	(457)		(276)		(669)		(733)		(1,147)
Net income attributable to shareholders of the parent	7,740		5,817		15,988		13,557		28,895
Per share data:
Earnings per share
– Basic	NT$1.80		NT$1.36		NT$3.69		NT$3.16		NT$6.71
– Diluted	NT$1.76		NT$1.30		NT$3.61		NT$3.07		NT$6.51
Earnings per equivalent ADS
– Basic	US$0.118		US$0.089		US$0.253		US$0.207		US$0.470
– Diluted	US$0.115		US$0.086		US$0.247		US$0.202		US$0.456
Number of weighted average shares used in diluted EPS calculation ( in thousand shares)	4,342,948		4,336,965		4,375,107		4,341,706		4,359,944
FX (NTD/USD)	30.57		30.40		29.26		30.49		28.56

ASE Technology Holding Co., Ltd.
Summary of ATM Statement of Income Data
 (In NT$ million) 
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2023		Mar. 31 2023		Jun. 30 2022		Jun. 30 2023		Jun. 30 2022
Net revenues
Packaging	62,607		60,770		79,894		123,377		149,815
Testing	12,292		11,407		13,760		23,699		26,343
Direct Material	1,165		1,106		1,288		2,271		2,767
Others	44		36		56		80		98
Total net revenues	76,108		73,319		94,998		149,427		179,023
Cost of revenues	(59,947)		(58,570)		(67,230)		(118,517)		(128,154)
Gross profit	16,161		14,749		27,768		30,910		50,869
Operating expenses
Research and development	(4,748)		(4,269)		(4,455)		(9,017)		(8,591)
Selling, general and administrative	(4,008)		(4,071)		(5,318)		(8,079)		(10,271)
Total operating expenses	(8,756)		(8,340)		(9,773)		(17,096)		(18,862)
Operating income	7,405		6,409		17,995		13,814		32,007

ASE Technology Holding Co., Ltd.
Summary of EMS Statement of Income Data
 (In NT$ million) 
(Unaudited)

	For the three months ended						For the six months ended
	Jun. 30 2023		Mar. 31 2023		Jun. 30 2022		Jun. 30 2023		Jun. 30 2022
Net revenues
Total net revenues	60,424		57,733		66,218		118,157		127,384
Cost of revenues	(54,785)		(53,166)		(59,568)		(107,951)		(115,354)
Gross profit	5,639		4,567		6,650		10,206		12,030
Operating expenses
Research and development	(1,527)		(1,324)		(1,380)		(2,851)		(2,629)
Selling, general and administrative	(2,023)		(1,918)		(2,603)		(3,941)		(4,534)
Total operating expenses	(3,550)		(3,242)		(3,983)		(6,792)		(7,163)
Operating income	2,089		1,325		2,667		3,414		4,867

ASE Technology Holding Co., Ltd.
Summary of Consolidated Balance Sheet Data
(In NT$ million)
(Unaudited)

			As of Jun. 30, 2023			As of  Mar. 31, 2023
Current assets
Cash and cash equivalents			59,351			62,056
Financial assets – current			7,040			6,317
Trade receivables			98,671			91,514
Inventories			77,568			85,667
Others			28,400			25,717
Total current assets			271,030			271,271
Financial assets – non-current & Investments – equity  method			26,761			24,352
Property, plant and equipment			262,604			266,005
Right-of-use assets			10,691			10,882
Intangible assets			71,298			72,101
Others			30,137			30,829
Total assets			672,521			675,440
Current liabilities
Short-term borrowings			37,798			45,158
Current portion of bonds payable & Current portion of  long-term borrowings			18,191			11,999
Trade payables			67,225			63,552
Others			102,551			113,650
Total current liabilities			225,765			234,359
Bonds payable			33,462			38,837
Long-term borrowings[2]			90,224			86,752
Other liabilities			25,653			25,766
Total liabilities			375,104			385,714
Equity attributable to shareholders of the parent			278,624			270,651
Non-controlling interests			18,793			19,075
Total liabilities & shareholders' equity			672,521			675,440
Current ratio			1.20			1.16
Net debt to equity ratio			0.41			0.42

ASE Technology Holding Co., Ltd.
Summary of Consolidated Statement of Cash Flow Data
(In NT$ million)
(Unaudited)

		For the three months ended						For the six months ended
		Jun. 30 2023		Mar. 31 2023		Jun. 30 2022		Jun. 30 2023		Jun. 30 2022
Cash Flows from Operating Activities:
Profit before income tax		10,111		7,870		21,136		17,981		37,799
Depreciation & amortization		14,488		14,439		13,749		28,927		27,252
Other operating activities items		(8,643)		8,449		(19,858)		(194)		(22,844)
Net cash generated from operating activities		15,956		30,758		15,027		46,714		42,207
Cash Flows from Investing Activities:
Net payments for property, plant and equipment		(12,147)		(15,206)		(17,292)		(27,353)		(34,474)
Other investment activities items		(2,285)		415		(245)		(1,870)		(998)
Net cash used in investing activities		(14,432)		(14,791)		(17,537)		(29,223)		(35,472)
Cash Flows from Financing Activities:
Total net proceeds from (repayment of) borrowings		(3,395)		(11,621)		(8,980)		(15,016)		(14,290)
Other financing activities items		(1,055)		116		(893)		(939)		(1,162)
Net cash used in financing activities		(4,450)		(11,505)		(9,873)		(15,955)		(15,452)
Foreign currency exchange effect		481		(446)		803		35		5,490
Net increase (decrease) in cash and cash equivalents		(2,445)		4,016		(11,580)		1,571		(3,227)
Cash and cash equivalents at the beginning of period		62,056		58,040		84,426		58,040		76,073
Cash and cash equivalents at the end of period		59,611		62,056		72,846		59,611		72,846
Cash and cash equivalents in the consolidated balance sheet		59,351		62,056		72,846		59,351		72,846
Cash and cash equivalents included in disposal groups held for sale		260		-		-		260		-

[1] All financial information presented in this press release is unaudited, consolidated and prepared in accordance with Taiwan-IFRS (International Financial Reporting Standards as endorsed for use in the R.O.C.).  Such financial information is generated internally by us and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by our independent auditors, to which we subject our year-end audited consolidated financial statements, and may vary materially from the year-end audited consolidated financial information for the same period.  Any evaluation of the financial information presented in this press release should also take into account our published year-end audited consolidated financial statements and the notes to those statements.  In addition, the financial information presented is not necessarily indicative of our results of operations for any future period. [2] Long-term borrowings include long-term loans and bills payable.

Investor Relations Contact
ir@aseglobal.com
Tel: +886.2.6636.5678
https://www.aseglobal.com

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