ASE, the leader in semiconductor packaging and testing, still explodes orders after 30% price hike

According to the Taiwan media Business Times, the packaging and testing capacity is seriously tight. In the first half of the year, ASE, the leader in semiconductor packaging and testing, was full of orders for the packaging and testing business. The orders exceeded the production capacity by more than 40%. However, there are still customers who accept the price increase as long as the production capacity is required to avoid the recurrence of the shortage of chips and the inability to deliver goods.

Benefiting from the launch of Apple’s iPhone 12 and the new MacBook Air/Pro, coupled with the booming 5G smartphone shipments, ASE’s chip packaging and testing and system-in-package (SiP) orders were booming, and the packaging and testing business was consolidated in December 2020 The monthly revenue increased by 4.6% to 25.391 billion yuan (NTD, the same below), with an annual growth rate of 8.4%, setting a new record for monthly revenue.

ASE’s consolidated revenue in December 2020 hit a new high of US$1.763 billion. However, affected by the appreciation of the New Taiwan dollar against the US dollar, the revenue in December NTD decreased by 0.7% to 50.298 billion yuan, which is the same as that in 2019. Year-on-year growth of 29.7%, the second highest monthly revenue in history.

In the fourth quarter of 2020, the combined revenue of ASE’s packaging and testing business increased by 1.3% quarter-on-quarter to 72.752 billion yuan, an increase of 5.0% over the same period in 2019, setting a new record for quarterly revenue. Including the EMS business in the fourth quarter of 2020, the group’s consolidated revenue increased by 20.8% quarter-on-quarter to 148.877 billion yuan, an increase of 28.3% compared with the same period in 2019, and also set a new record.

As for the consolidated revenue of the group in 2020, it will also reach as high as 476.979 billion yuan, an increase of 15.4% over 2019, and continue to set a new record for annual revenue.

As the wafer foundry was fully loaded, ASE Investment Control’s packaging and testing business in the first half of 2021 was also booming and fully loaded. Not only has Huawei’s HiSilicon capacity gap been fully filled, but the existing packaging and testing capacity has been completely in short supply. There is a serious shortage of production capacity such as wire-bonding packaging, wafer-level packaging, and 5G mobile phone chip stack packaging, and the number of orders placed by customers has exceeded the production capacity by more than 40%.

ASE Investment Control has purchased more than 1,000 additional line machines, but the production capacity is still unable to meet the strong demand. Even if the price is increased by 30% to make customers who have over-ordered to retreat, there are still customers who continue to place orders, regardless of the price. capacity.

Although ASE’s EMS business entered the traditional off-season in the first half of the year, it benefited from the strong sales of Apple’s iPhone and MacBook, which drove the SiP performance to remain high. As for the packaging and testing business, it received full orders and raised prices.

The legal person estimates that ASE Investment Holdings’ consolidated revenue in the first quarter of 2021 is expected to decline by about 10% from the previous quarter, which is significantly better than the quarterly revenue decline of more than 15% in the first quarter of the past few years. The increase in the proportion of revenue will also help the group’s average gross profit margin to increase, and the overall profit performance is expected to be comparable to the previous quarter.

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