ASE Technology Holding Co., Ltd. American Depositary Shares (each representing Two Common Shares)
ASX · NYSE
Next quarter
Expected to report Feb 4, 2027 — estimated from last year’s reporting date.
Consensus is $0.45 EPS for Dec 2026 across 1 estimates, ranging $0.45 to $0.45.
ASX Sep 2026
- 8.82%
- $0.34
- $0.37
- —
- —
Highlights
- EPS beat: September-quarter EPS was $0.37 versus consensus of $0.34, an 8.82% surprise.
- LEAP outlook raised: ASE now expects 2026 LEAP revenue above $4 billion, up from its prior $3.7 billion forecast, and still projects 2027 LEAP revenue to double.
- Full-process ramp: Full-process revenue is expected to reach about $300 million in 2026 and exceed $1 billion in 2027; management cited strong demand but said capacity, especially space, is limiting supply.
- CPO contribution: The company expects more than $500 million of CPO revenue in 2027 and said mass production began in Q4 2026.
- Margin expansion: Q3 gross margin was slightly above 30%. Management attributed the improvement to LEAP growth and better utilization, and expects sequential margin improvement through 2027.
- Higher investment: 2026 CapEx was raised by $1 billion to $11.5 billion. Management expects 2027 CapEx to be higher still and anticipates negative cash flow as it expands.
- Broad-based demand: General-market business is expected to grow more than 20% in 2026, with management expecting growth to continue in 2027 as automotive, industrial and AI-adjacent demand offset softness in phones and PCs.
- EMS mix shift: High-performance computing accounts for roughly the mid-teens percentage of EMS revenue and is ramping rapidly; ASE expects further EMS growth, particularly in AI-related business.
Analysis
ASE’s September-quarter print paired an EPS beat with a stronger outlook for advanced packaging and test. EPS of $0.37 topped the $0.34 consensus by 8.82%. The supplied material does not provide revenue, year-ago or prior-quarter EPS, or comparable gross-margin figures, so the quarter’s year-over-year and sequential performance cannot be quantified here. Management did report Q3 gross margin slightly above 30% and said the improvement reflected LEAP’s ramp and better utilization across both advanced and mainstream packaging and test.
The central development was demand running ahead of available capacity. ASE raised its 2026 LEAP revenue expectation to more than $4 billion from $3.7 billion and maintained its projection to double LEAP revenue in 2027. Within that, full-process revenue is expected to be about $300 million this year and above $1 billion next year; CPO is projected to contribute more than $500 million in 2027, following the start of mass production in Q4. Management expects margins to improve sequentially through 2027, while also committing to a larger expansion: 2026 CapEx is now $11.5 billion, and 2027 spending is expected to be higher. Space constraints and resulting negative cash flow are the near-term costs of trying to meet demand.
LEAP growth
ASE raised its 2026 LEAP revenue forecast to more than $4 billion, versus $3.7 billion projected the prior quarter. Management maintained its expectation that LEAP revenue will double in 2027. Demand is strong across assembly and test, but the company said it is constrained in how much it can deliver, with facility space a key bottleneck.
Full process and CPO
- Full process: ASE expects about $300 million of revenue in 2026 and more than $1 billion in 2027. Management said yields are sufficient for mass production and major shipments, while customer demand next year could exceed what available capacity allows.
- CPO: The company projects more than $500 million of CPO revenue in 2027 and said mass production began in Q4 2026. Management described CPO and NPO as technologies that can coexist, but did not give a longer-term CPO revenue forecast or product-level revenue split.
Margins and utilization
Q3 gross margin was slightly above 30%, and management expects sequential improvement each quarter in 2027. It said the quarter’s margin expansion came largely from the LEAP ramp and higher utilization across both advanced and mainstream packaging and test. LEAP assembly and test are margin-accretive, and management said the previous structural margin ceiling should now be viewed as a base rather than a limit. It did not quantify the contribution from mix, utilization or pricing separately.
Capacity investment
- 2026 CapEx: ASE increased its forecast by $1 billion, from $10.5 billion to $11.5 billion. Of the additional amount, half is for facilities and half for equipment; management said equipment investment is split 60% for LEAP and 40% for mainstream business.
- 2027 spending: Management expects CapEx to exceed 2026 levels, citing strong demand and the need to expand capacity. It expects negative cash flow during the investment period and said funding may include customer trade financing.
- Constraints: The company is actively seeking suitable existing factories to buy, but said suitable space is scarce and competition for facilities is keen.
Mainstream and EMS
ASE expects general-market business to grow more than 20% in 2026 and anticipates growth continuing in 2027. Management said automotive, industrial and AI-adjacent demand more than offsets softness in phones and PCs. In EMS, high-performance computing represents roughly the mid-teens percentage of revenue and is ramping rapidly; computing is the main growth focus, while consumer and communications demand is comparatively weaker.
