ASE Technology Q1 net income rises 90.8 percent from 2019

AS Technology revenue and profits up in Q1 2020.
Image: ASE Technology

ASE Technology Holding Company Limited (ASE) revealed it grew its revenue and income by double digits in the first quarter. CFO Joseph Tung told DigiTimes his firm topped its Q1 2019 performance because of an uptick in IC packing and test orders. The corporation also offered a positive outlook for the second quarter, including year-over-year improvements in its core business.

ASE’s Robust Q1 2020 Results

In the three months ending March 31, ASE generated NT$97.357 billion ($3.265 billion) in sales, which represents an increase of 10 percent year-over-year. Most impressively, the Taiwanese corporation garnered NT$3.899 billion in profits, up a whopping 90.8 percent from the same period in 2019. The firm also brought its quarterly earnings per share to NT$0.89 ($0.60), a yearly improvement of 93.4 percent.

In addition to increasing its revenue, the semiconductor maker also reduced its costs by 15.5 percent sequentially.

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ASE noted 53 percent of its Q1 revenue came from its packing and testing operations, which it mainly performs for mobile communications companies. Although global smartphone shipments hit record lows last quarter, the firm did strong business before the world-changing impact of COVID-19. In fact, the chipmaker exited the March period in a strong financial position with a 1.25 debt-to-equity ratio and NT$241 billion ($8.09 billion) in available credit.

ASE’s Healthy Q2 Outlook

Despite the ongoing impact of the coronavirus on the global economy, ASE expects to do well in the second quarter.

Tung told DigiTimes his company would benefit from delivering electronic manufacturing service (EMS) orders that had been delayed by COVID-19. The executive also noted the corporation’s Q1 production capacity utilization was 75 percent but will reach 80 percent this quarter. In its first-quarter earnings presentation, the chipmaker forecast second-quarter revenue consistent with its Q3 2019 sales, which totaled NT$117.557 billion ($3.772 billion).

DigiTimes supported ASE’s estimates, citing industry sources predicting the firm would experience yearly growth of 10 percent in the first half of 2020.

However, the Taiwanese semiconductor maker’s full-year performance is harder to predict. Market analyst firm Strategy Analytics estimates the smartphone market will contract by 21 percent this year. If that happens, ASE’s revenue will take a hit as its handset clients reduce their orders. However, with its ample liquidity and mix of products, the company should able to weather mid-term headwinds it is facing.


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