Ase Technology Holding Co., Ltd. (NYSE: ASX, IEX: 3711) reported unaudited consolidated net revenues of US$2,309 million (NT$73,784 million) for July 2026, marking a 30.6% year-on-year increase from US$1,769 million in July 2025. The results reflect a 10.4% sequential rise from June 2026’s US$2,092 million, underscoring sustained demand for outsourced semiconductor assembly and testing services amid broader industry recovery.

The Advanced Technology Manufacturing (ATM) segment, which includes assembly, testing, and material business, was the primary growth driver. ATM net revenues reached US$1,487 million (NT$47,524 million), up 36.4% year-on-year from US$1,091 million and up 7.6% sequentially from US$1,383 million in June 2026. The remaining non-ATM business contributed US$822 million to total consolidated revenue, highlighting diversified income streams beyond core advanced packaging.

Financial Performance Overview

Note: Figures are unaudited. Year-over-year percentage changes in USD reflect currency fluctuation effects alongside operational growth.

What the Numbers Show

The divergence between New Taiwan Dollar (NTD) and US Dollar (USD) growth rates highlights the impact of foreign exchange movements on reported figures. While NTD-based revenues surged 43.2% year-on-year, USD-based revenues grew by 30.6%. Similarly, sequential growth was 12.2% in NTD terms versus 10.4% in USD terms. This suggests that while operational volume and pricing power are driving substantial real growth, currency translation effects moderated the headline USD figures. Investors should monitor subsequent quarters to distinguish between organic demand expansion and forex tailwinds as the semiconductor cycle progresses.

ASE Technology Holding Co., Ltd. delivered a strong second-quarter performance in 2026, reporting diluted earnings per share (EPS) of US$0.29, which significantly exceeded the analyst consensus estimate of US$0.17 by 70.59%. The semiconductor assembly and testing services provider also posted quarterly sales of US$6.035 billion, beating the revenue estimate of US$5.990 billion by 0.75%. This result represents a 163.64% year-over-year increase in earnings from US$0.11 per share in the same period last year, while sales grew 24.95% from US$4.830 billion.

The company’s net revenues for the quarter totaled NT$191,064 million, a 26.7% year-over-year surge. Net income attributable to shareholders of the parent more than doubled to NT$21,068 million, up from NT$7,521 million in 2Q25. Basic EPS reached NT$4.80 (US$0.304 per ADS), compared to NT$1.74 in 2Q25. The beat in both earnings and revenue underscores robust demand across its core business segments and effective cost management.

Segment Performance

Packaging operations remained the largest revenue contributor, accounting for approximately 52% of total net revenues. Within the assembly and test market (ATM) segment, net revenues rose 36.3% year-over-year to NT$126,148 million. The ATM gross margin expanded by 1.3 percentage points to 27.3% in 2Q26 from 26.0% in 1Q26, while operating margin improved to 15.7% from 14.1%.

In contrast, the electronic manufacturing services (EMS) segment experienced margin compression despite revenue growth. EMS net revenues increased 11.9% year-over-year to NT$65,789 million. However, the gross margin decreased by 0.6 percentage points to 8.9% from 9.5% in the prior quarter, and operating margin contracted to 2.4% from 3.0%. Raw material costs represented 79% of EMS net revenues, indicating high sensitivity to input price fluctuations.

Operational Costs and Margins

Consolidated cost of revenues totaled NT$150,914 million, comprising raw materials at NT$86,253 million (45% of net revenues), labor at NT$21,920 million (11%), and depreciation, amortization, and rental expenses at NT$18,441 million. The overall gross margin improved by one percentage point to 21.0% from 20.0% in 1Q26. Operating margin also expanded to 11.1% from 10.1% in the previous quarter.

Non-operating items contributed significantly to the bottom line. Total non-operating income reached NT$4,566 million, including a net gain on foreign exchange hedging activities of NT$3,637 million and a net gain on equity-method investments of NT$2,298 million. This offset a net interest expense of NT$1,853 million. Income before tax rose to NT$25,700 million from NT$18,161 million in 1Q26.

What the Numbers Show

The divergence between the ATM and EMS segments highlights ASE Technology Holding’s strategic focus on higher-margin semiconductor services. While the EMS unit grew revenues by nearly 12%, its operating margin compressed to 2.4%, reflecting intense cost pressures with raw materials consuming 79% of sales. Conversely, the ATM segment not only grew revenues by 36.3% but also expanded its operating margin to 15.7%. This suggests that the company’s profitability engine is increasingly reliant on advanced packaging and testing capabilities rather than lower-margin electronic manufacturing, allowing it to pass on costs or benefit from premium pricing in the semiconductor supply chain.