ASE Technology Holding: Semiconductor testing business can still grow strongly this year

Zhang Qiansheng, chairman of ASE Technology Holding, a leading packaging and testing company, said that the outbreak of the COVID-19 pandemic in 2020, which was originally expected to be optimistic, has caused great concerns about future growth momentum. However, the group expects that the testing business will still maintain strong growth momentum, among which the growth performance of system-level packaging (SiP) and fan-out packaging (Fan-out) is highly optimistic.

In his report to shareholders, Chang Qiansheng said that 2019 was a year of ups and downs, with the group's consolidated revenue of approximately NT$413.2 billion, an annual increase of approximately 11.3%, and stable growth despite the sharp economic fluctuations. Among them, the consolidated revenue of semiconductor packaging and testing was approximately NT$241.6 billion, an annual increase of approximately 12.8%, and the consolidated revenue of electronic foundry services reached a new high of NT$165.8 billion, an annual increase of approximately 9.2%.

Looking ahead to this year, Zhang Qiansheng believes that the economy has gradually stabilized since the second half of last year. Just when all data pointed to a rebound from the bottom, the COVID-19 pandemic broke out in 2020, which was originally expected to be optimistic. This has planted great concerns for future growth momentum, and the global economic growth rate may continue to be revised downward this year.

Zhang Qiansheng said that the group has always been seeking more development opportunities by expanding globally, finding new business models, and seeking partnerships with strategic partners. In the face of the current COVID-19 crisis, the group strives to flexibly transfer production capacity to serve customers and strives to ensure smooth and efficient production lines. No matter what challenges lie ahead, I believe they are opportunities for self-growth for the group.

Looking ahead to the future, Chang believes that in the past, the growth of semiconductor output value mainly relied on Moore's Law, with the benefits of new systems driving demand. In the future, the arrival of a large cycle of heterogeneous integration will be ushered in, and it is necessary to extend the pan-Moore's Law, combine other heterogeneous fields such as medicine and transportation, and introduce industries where semiconductors can play a leverage role.

Zhang Qiansheng pointed out that the computing system predicts that the future business opportunities will explode from true heterogeneous integration, which will allow other fields that have not yet involved semiconductors to start using semiconductors and join the semiconductor industry, so that there will be multiple growth potential. Future 5G applications, the Internet of Things (IoT), artificial intelligence (AI) and even the intelligent Internet of Things (AIoT) will all develop in this direction.

Zhang Qiansheng pointed out that on a comparable basis, the group's test business revenue reached US$1.4 billion last year, a year-on-year increase of 7%. The system-level packaging (SiP) revenue reached US$2.5 billion, a year-on-year increase of 13%, of which the revenue from new projects reached US$230 million. In addition, the fan-out packaging (Fan-out) revenue also reached the US$50 million target last year, a year-on-year increase of 70%.

Looking ahead to this year, Chang expects the group's testing business to maintain strong growth momentum, system-level packaging growth will continue to accelerate due to the application of 5G-related products, and fan-out packaging will continue to grow and continue until 2021. The group will continue to steadily increase capital expenditures and adjust the proportion, focusing on packaging and electronic foundry service research and development and new product introduction (NPI).