ASE Technology Holding Co.Ltd - ADR

Positive Q1 Performance: The company reported Q1 revenues exceeding expectations for both ATM (Advanced Test Manufacturing) and EMS (Electronics Manufacturing Services) segments, showing a 12% year-over-year growth despite a 9% sequential decline. LEAP services (10% of overall ATM revenues) and test business remain robust, indicating solid demand.

Outlook for Q2 2025: The management forecasts a 9% to 11% quarter-over-quarter growth in ATM revenues and a gross margin improvement of 140 to 180 basis points. However, EMS revenues are expected to decline 10% year-over-year with a 100 basis points drop in operating margin, illustrating typical seasonal patterns.

Investment in Test CapEx: The company is aggressively investing in test operations, spending $500 million in Q1 as part of a larger trend toward expanding test market share. The test business, which has grown from 16% to 18% of total revenues, is expected to reach between 19% to 20% by year-end, highlighting a strategic focus on higher-margin operations.