ASE Revenue Jumps 44.8% to NT$244,161 Million in Third Quarter
Key Facts
ASE Technology said on October 29 that its unaudited revenue reached NT$244,161 million in the third quarter of 2026, up 44.8% year over year and 27.8% from the second quarter, according to a company statement published via PR Newswire. The results came as net income attributable to shareholders of the parent company expanded to NT$26,996 million, from NT$10,870 million a year earlier and NT$21,065 million in the second quarter. Diluted earnings per share were NT$5.84, or US$0.365 per American depositary receipt, compared with NT$2.41 in the year-earlier period and NT$4.61 in the previous quarter. According to Investing.com, earnings per share and revenue exceeded analysts' estimates of NT$5.18 per share and NT$233.18 billion in revenue. The company had reported its revenue figure and annual growth in an earlier statement on October 12, before publishing detailed financial results on October 29.
The stronger overall performance was reflected in margins, with the consolidated gross margin rising to 22.1% in the third quarter from 21.0% in the second quarter, and the operating margin climbing to 13.6% from 11.1%, according to the official disclosure. But the improvement was not evenly shared across the company's two segments. The assembly, testing and materials segment, known as ATM, generated revenue of NT$151,485 million, up 51.0% year over year and 20.1% quarter over quarter, while its gross margin rose to 30.6% from 27.3%. Electronic manufacturing services, or EMS, recorded revenue of NT$93,469 million, up 35.4% year over year and 42.1% quarter over quarter, but its gross margin fell to 8.3% from 8.9%. The divergence shows that revenue growth was broad, while improvement in segment profitability was clearer in ATM.
The head of investor relations linked revenue growth to faster installation of high-demand LEAP capacity, saying revenue "grew faster than we initially expected, driven mainly by faster-than-expected installation of high-demand LEAP capacity," according to the earnings-call transcript cited by Investing.com. The company said ATM capacity operated at near-full or full utilization during the quarter, and demand for its services exceeded its ability to supply under LEAP capacity and many other capacities. The statement provides context for the expansion of ATM activity and its margins, without the earnings release itself attributing growth to artificial intelligence. On spending, third-quarter equipment capital expenditure was US$2,104 million, including US$991 million for packaging operations and US$1,067 million for testing. Management also said its 2026 capital expenditure plan had risen to US$11.5 billion from US$10.5 billion, and that spending in 2027 would be higher, while noting that space was the biggest constraint on expansion.
Management forecast consolidated revenue to rise 6% to 8% quarter over quarter in the fourth quarter of 2026, and ATM revenue to grow 11% to 13%, according to the earnings call published via Longbridge. It set a range of 23% to 24% for the consolidated gross margin and 14.5% to 15.5% for the operating margin. For projects related to advanced packaging, management said full-flow CoWoS operations revenue was targeted at US$300 million in 2026, with expectations of exceeding US$1 billion in 2027, and that co-packaged optics, or CPO, revenue could exceed US$500 million in 2027. Management also estimated that overall market growth would exceed 20% in 2026 despite weak demand for phones and computers, supported by recovery in the automotive and industrial sectors and demand for AI accelerator chips. EL7 data showed ASX shares closed at US$44.55 on October 29, compared with a close of US$43.92 the previous day.