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.
  • Raw material cost totaled NT$70,924 million for the quarter, representing 52% of the total net revenues.
  • Labor cost totaled NT$14,918 million for the quarter, representing 11% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$13,069 million for the quarter.
• 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:
  • Net interest expense was NT$1,100 million.
  • Net foreign exchange loss was NT$1,188 million, primarily attributable to the appreciation of the U.S. dollar against the New Taiwan dollar.
  • Net gain on valuation of financial assets and liabilities was NT$1,914 million.
  • Net gain on equity-method investments was NT$326 million.
  • Other net non-operating income was NT$747 million, primarily attributable to miscellaneous income. Total non-operating income for the quarter was NT$699 million.
• 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.
  • Raw material cost totaled NT$22,617 million for the quarter, representing 30% of the total net revenues.
  • Labor cost totaled NT$12,090 million for the quarter, representing 16% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$11,764 million for the quarter.
• 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.
  • Raw material cost totaled NT$48,251 million for the quarter, representing 80% of the total net revenues.
  • Labor cost totaled NT$2,714 million for the quarter, representing 5% of the total net revenues.
  • Depreciation, amortization and rental expenses totaled NT$1,040 million for the quarter.
• 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

ATM Operations

EMS Operations

* 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)

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