ASM Pacific Technology ((HK:0522)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ASM Pacific Technology’s recent earnings call conveyed a generally positive sentiment, driven by robust demand across various segments, particularly fueled by AI advancements. While the company celebrated significant growth in Advanced Packaging and operating profits, it also acknowledged challenges such as declines in SMT revenue, uneven TCB orders, and foreign exchange impacts. Nonetheless, the overall trends in bookings and revenue suggest a promising outlook for the future.
Strong AI-Driven Demand
The earnings call highlighted the continued strong demand driven by AI tailwinds, which positively impacted both the Advanced Packaging (AP) and mainstream segments. This demand has been a key factor in boosting bookings and revenue guidance, setting a positive tone for the company’s financial performance.
Advanced Packaging Growth
The Advanced Packaging business significantly increased its revenue contribution, accounting for around 39% of the group’s total revenue, approximately USD 326 million. This growth was largely driven by AI tailwinds, with orders in the first half of the year up by 50% compared to the previous year.
Gross Margin Maintenance
Despite facing foreign exchange headwinds, ASM Pacific Technology successfully maintained a gross margin above 40% in the first half of 2025. This achievement underscores the company’s ability to manage costs effectively amidst challenging external conditions.
Record TCB Tool Base
The company achieved a milestone by surpassing 500 Thermo-Compression Bonding (TCB) tools installed worldwide, maintaining the largest TCB installed base globally. This record reflects the company’s strong position in the market and the ongoing demand for its TCB solutions.
Revenue and Bookings Growth
ASM Pacific Technology reported impressive growth in both bookings and revenue. The group’s bookings reached USD 912.8 million, marking a 10.5% growth half-on-half and a 12.4% increase year-on-year. Revenue also saw an increase of 8.9% quarter-on-quarter and 1.8% year-on-year.
Operating Profit Improvement
The company’s operating profit showed a remarkable improvement, reaching HKD 329.3 million, which represents a 79.5% growth half-on-half. This significant increase highlights the company’s operational efficiency and successful cost management strategies.
Revenue Growth in Key Markets
China registered notable year-on-year revenue growth, contributing 36.7% to the group’s total revenue. Additionally, AI demand supported growth in other key markets such as Korea and Taiwan, further enhancing the company’s global footprint.
SMT Revenue Decline
Despite the overall positive performance, the SMT segment experienced revenue declines both year-on-year and half-on-half. However, this was partially offset by growth in other segments, indicating a need for strategic adjustments in the SMT business.
Fluctuating TCB Orders
The company faced challenges with fluctuating TCB orders, as SEMI bookings were down 4.5% quarter-on-quarter and 4.6% year-on-year. This uneven order flow in the AP segment posed a challenge to maintaining consistent growth.
Foreign Exchange Impact
Unfavorable foreign exchange translations negatively impacted the company’s results. However, these effects were partially mitigated by tax credits, showcasing the company’s resilience in navigating currency fluctuations.
Operating Expenses Increase
Operating expenses increased by 5.7% quarter-on-quarter, primarily due to strategic investments in R&D and IT infrastructure. These investments are crucial for sustaining long-term growth and maintaining a competitive edge.
Forward-Looking Guidance
Looking ahead, ASM Pacific Technology provided optimistic guidance for the second quarter of 2025, driven by AI tailwinds across Advanced Packaging and mainstream solutions. The company expects Q3 revenue to exceed market consensus, with projections between USD 445 million and USD 505 million, reflecting a year-on-year increase of 10.8% and an 8.9% quarter-on-quarter rise at the midpoint. Key growth drivers include continued demand for TCB tools and bookings growth in China.
In conclusion, ASM Pacific Technology’s earnings call painted a generally positive picture, with strong demand driven by AI advancements and significant growth in Advanced Packaging. Despite challenges such as SMT revenue declines and foreign exchange impacts, the company demonstrated resilience and strategic foresight. The forward-looking guidance suggests continued growth, making ASM Pacific Technology a company to watch in the coming quarters.