Analyst inquired about potential price increases given full utilization on flip chip and bumping, and customer feedback on pricing.

Management stated pricing remains resilient and sensitive, but they will set the most suitable pricing structure based on the current situation. For mainstream, pricing is at a very stable level due to market recovery. “without getting -- without getting into specific, I think, in general, I think our pricing remains to be resilient. And I think it's very sensitive to talk about pricing.”

Analyst asked for an update on U.S. operation plans given major foundry partners' activities and competitor presence, and concerns about T-Glass shortage as a gating factor for next year's growth.

Management reiterated no new updates on U.S. plans, still evaluating opportunities, and any decision must be economically sensible. They acknowledged T-Glass shortage concerns but stated no real disruptions to service yet, leveraging their dominant position to secure materials. “U.S., we don't have anything new to report except that -- let me reiterate what we mentioned last time that we were invited by our customers to look at the investment opportunities in the U.S.”

Analyst asked for updates and confidence level regarding ASE's final test market share, especially for next-gen GPUs, given competitor aggression.

Management stated aggressive and successful expansion in test business, with test growth twice that of packaging this year. They are making necessary investments in final test capacity and expect meaningful revenue from next-gen AI chips in late next year. “we are making the investment -- necessary investment at this point to build up the capacity. And we're expecting to have meaningful revenue being generated in the later part of next year when we start serving the next-generation AI chips.”

ASX

ASE Technology Holding Co. (ASX) Q3 FY25 earnings call: guidance and Q&A

Earnings call· Sep 2025 (Q3 FY25)· Information Technology· Oct 30, 2025

Source: earnings call transcript

Executive summary

ASE Technology Holding Co., Ltd. Q3 FY25 — Strong LEAP and Test Business Momentum Drives Outperformance

ASE Technology delivered strong Q3 FY25 results, with both ATM and EMS outperforming expectations, driven by robust demand in LEAP and test services, particularly from AI. Despite significant foreign exchange headwinds impacting margins, the company achieved record ATM revenues and expects full-year ATM revenue growth to exceed 20%. Management remains committed to heavy investments in leading-edge capacity to support continued strong momentum into 2026, while also navigating supply chain uncertainties and maintaining pricing resilience.

Highlights

Consolidated net revenues were TWD 168.6 billion, representing an increase of 12% sequentially and 5% year-over-year.
ATM business achieved record revenues of TWD 100.3 billion, growing 8% sequentially and 17% annually.
ATM test business outpaced assembly, growing 11% sequentially and 30% annually.
Consolidated operating margin improved by 1 percentage point sequentially and 0.6 percentage points year-over-year to 7.8%.
ATM full-year 2025 revenue is expected to exceed target and grow over 20% year-over-year in U.S. dollar terms.

Concerns

Foreign exchange had a negative sequential impact of 1.4 percentage points and an annual impact of 2.4 percentage points on consolidated gross margins.
Foreign exchange had a negative sequential impact of 2.1 percentage points and an annual impact of 3.6 percentage points on ATM margins.
EMS revenues were down 8% year-over-year, despite a 17% sequential increase.
Total interest-bearing debt increased by TWD 55.6 billion to TWD 295.7 billion, primarily due to a TWD 50 billion syndicated loan for CapEx.

Guidance & targets

Category	Target	Timeline	Confidence
Consolidated Revenue Growth	1% to 2% quarter-over-quarter high materiality	Q4 · FY25	High
Consolidated Gross Margin Increase	70 to 100 basis points quarter-over-quarter high materiality	Q4 · FY25	High
Consolidated Operating Margin Increase	70 to 100 basis points quarter-over-quarter high materiality	Q4 · FY25	High
ATM Revenue Growth	3% to 5% quarter-over-quarter medium materiality	Q4 · FY25	High
ATM Gross Margin Increase	100 to 150 basis points quarter-over-quarter medium materiality	Q4 · FY25	High
EMS Revenue Growth	stay flat or decline slightly quarter-over-quarter medium materiality	Q4 · FY25	Medium
EMS Operating Margin	similar to fourth quarter 2024 level medium materiality	Q4 · FY25	Medium
ATM Full-Year Revenue Growth	over 20% year-over-year high materiality	FY25	High
ATM Leading-Edge Revenue	USD 1.6 billion high materiality	FY25	High
Machinery Capital Expenditure	further increase by another few hundred million U.S. dollars high materiality	FY25	High
Leading-Edge Revenue Increase	over TWD 1 billion high materiality	FY26	High
ATM Gross Margin	at the structural margin range high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Consolidated Consolidated net revenues increased, with gross margin improving sequentially and annually. Operating expenses increased due to higher R&D costs but declined as a percentage of revenue. Net nonoperating gain of TWD 0.8 billion, offset by TWD 1.4 billion net interest expense. Fully diluted EPS: TWD 2.41Basic EPS: TWD 2.50Net Income: TWD 10.9 billionEffective Tax Rate: 19%	TWD 168.6 billion	5%	12%	Gross Margin: 17.1%, Operating Margin: 7.8%
ATM Record revenues for ATM business. Test business growth outpaced assembly. Sequential gross margin increase due to utilization improvement, offset by NT dollar appreciation. Annual gross margin decline due to NT dollar appreciation and higher electricity rates, offset by higher loading. Operating expenses increased due to R&D ramp-up. Test business growth (sequential): 11%Test business growth (annual): 30%Operating Expense Percentage: 11.8%Gross Margin (constant currency Q1 FY25): 26.8%	TWD 100.3 billion	17% (NTD), 27% (USD)	8% (NTD), 13% (USD)	Gross Margin: 22.6%, Operating Margin: 10.8%
EMS Sequential revenue increase and annual decline primarily due to differing underlying device seasonality. Gross margin declined slightly due to product mix. Operating expenses decreased due to lower compensation and professional fees. Operating margin improved due to higher loading rate and one-time inventory-related adjustments. Operating Expense Percentage: 5.6%	TWD 69 billion	-8%	17%	Gross Margin: 9.2%, Operating Margin: 3.7%

Risks & headwinds

Foreign Exchange Volatility Q3 FY25

NT dollar strengthening by 4.6% sequentially against U.S. dollar in Q3 FY25; estimated negative sequential impact of 1.4 percentage points on holding company gross margin and 2.1 percentage points on ATM gross margin.

Mitigation:Expect a more stable NT dollar environment in Q4 FY25 with an average exchange rate of TWD 30.4 per U.S. dollar; utilizing foreign exchange hedging activities.

Supply Chain Constraints (e.g., T-Glass shortage) Ongoing

Some materials may have longer lead times.

Mitigation:Leveraging dominant player position to secure needed materials; no real disruptions to customer service seen at this point.

Geopolitical Uncertainties FY25

Packaging business was a little bit short from original target due to geopolitical uncertainties.

Mitigation:Shortfall sufficiently replenished by more than expected growth in test business.

Competition in U.S. Market Future

Competitor Amkor has presence in U.S.

Mitigation:Evaluating investment opportunities in the U.S. based on economic sense; watchful on overall competition landscape.

What to watch in Q4 FY25

ATM Leading-Edge Revenue Growth

FY26

Current On track for USD 1.6 billion in FY25

Target Over TWD 1 billion increase for FY26

Why it matters

This metric is critical as LEAP and AI-driven demand are key growth drivers and margin accretive for the company, indicating continued market leadership and profitability.

And going forward into 2026, we see -- we continue to see very strong momentum. And we are very, very confident that we will gain another -- over TWD 1 billion kind of revenue increase for 2026 in this space.

Find out whether ASX delivers this. Inve re-checks your case every morning.

Q&A highlights

Analyst asked for an update on LEAP revenues for FY25 vs. the $1.6 billion guidance, potential for doubling in FY26, and whether LEAP is margin accretive.

Management confirmed being on track for $1.6 billion LEAP revenue in FY25, with strong momentum in AI/HPC. They expect over TWD 1 billion in additional LEAP revenue for FY26. LEAP is quickly becoming margin and return accretive.

“we are on track in reaching our TWD 1.6 billion mark this year. Everything is progressing well. I think we have shown very strong momentum in the AI and HPC related part of the business.”

asked by Gokul Hariharan · answered by Joseph Tung

2 min read 6 chapters

Detailed narrative

Q3 Outperformance and FX Impact

Both ATM and EMS businesses exceeded sales and profitability expectations in Q3 FY25. Packaging and testing utilization rates were in the high 70s, with LEAP and traditional advanced packaging lines generally full. However, foreign exchange movements significantly impacted performance, with the NT dollar strengthening by 4.6% against the U.S. dollar, leading to estimated negative impacts of 1.4 and 2.1 percentage points on holding company and ATM margins, respectively, on a sequential basis.

ATM Business Strength and LEAP Momentum

The ATM business achieved record revenues of TWD 100.3 billion, driven by strong growth in test businesses (up 11% sequentially, 30% annually) which outpaced assembly. The Computing segment, particularly LEAP-based revenues, continues to be a larger component of the business.

LEAP and test services, especially those driven by AI, are leading company growth, with many new products inferring AI capability or readiness, expanding smart AI features, and driving demand for advanced packaging and testing.

EMS Business Dynamics

EMS revenues increased 17% sequentially to TWD 69 billion but were down 8% year-over-year, primarily due to differing underlying device seasonality. The sequential gross margin declined slightly by 0.2 percentage points due to product mix. Operating margin improved to 3.7% due to higher loading rates and one-time inventory adjustments.

Strategically, EMS faces similar technological trends as ATM, such as power delivery and thermal control, allowing for broader technical solutions.

Capital Expenditures and AI-Driven Demand

The company increased its total interest-bearing debt by TWD 55.6 billion to TWD 295.7 billion, largely due to a TWD 50 billion syndicated loan to fund CapEx. Machinery and equipment CapEx totaled $779 million in Q3, with $534 million for packaging and $199 million for testing.

An additional $716 million was spent on facilities. Management plans to further increase FY25 CapEx by several hundred million USD to meet customer requests and support momentum into 2026, primarily for wafer probing for AI and non-AI chips, general capacity ramp, and new initiatives.

Leading-Edge Investment and Margin Accretion

Management is confident in reaching USD 1.6 billion in leading-edge revenue for FY25 and expects over TWD 1 billion in additional leading-edge revenue for FY26, with test continuing to show stronger momentum. The company is making heavy investments in leading-edge capacity to secure and expand its dominant position in AI/HPC.

LEAP is expected to be both margin and return accretive, with ATM gross margin projected to return to the structural range in FY26, assuming stable FX.

U.S. Operations and Supply Chain

The company is evaluating investment opportunities in the U.S. at the invitation of customers but has made no final decision, emphasizing that any decision must make economic sense. Management noted that while some materials might have longer lead times, they have not seen real disruptions to customer service and believe their dominant position provides leverage in securing needed materials.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.