ASE Technology's 2024 Q4 Earnings Call: Contradictions in Revenue Targets, Customer Concentration, and AI Packaging Growth

These are the key contradictions discussed in ASE Technology Holding Co., Ltd.'s latest 2024Q4 earnings call, specifically including: Advanced Packaging Revenue Targets, Customer Concentration, Revenue and Revenue Growth Expectations, BIS Restriction Impact Assessment, AI-related Advanced Packaging Growth, Test Business Expectations, and Foundry Collaboration for Advanced Packaging:



Revenue and Segment Growth:
- ASE Technology Holding Co., Ltd. reported consolidated revenues grew 2% year-on-year in 2024, with ATM revenues up 3% year-on-year.
- The growth was driven by strong demand for leading-edge packaging and advanced testing services, particularly in the computing and communications segments.

Investment in Advanced Packaging:
- The company's machinery and equipment capital expenditures for 2024 were $1.9 billion, focused on advanced packaging and testing, with $1.1 billion spent on facilities.
- This investment was to support the growing demand for leading-edge technology and prepare for the AI-led super cycle.

Operating Expenses and Profitability:
- AES experienced a $1.5 billion increase in operating expenses year-on-year, primarily due to leading-edge packaging ramp-up costs and labor expenses.
- Despite these expenses, the company expects its operating leverage to improve, with operating margins stabilizing mid-2025 as leading-edge capacity ramps.

Testing Services Expansion:
- The testing business grew 9% year-on-year in 2024, with a significant 18% increase in Q4, driven by increased turnkey solutions and leading-edge test services.
- The expanding demand for testing services is expected to continue, with significant investment in testing-related CapEx in 2025.