ASE Technology Holding Co., Ltd. (NYSE:ASX) Q3 2023 Earnings Conference Call October 26, 2023 3:00 AM ET

Company Participants

Ken Hsiang - Head of Investor Relations

Joseph Tung - Chief Financial Officer

Conference Call Participants

Gokul Hariharan - J.P. Morgan

Laura Chen - Citigroup

Bruce Lu - Goldman Sachs

Rick Hsu - Daiwa Securities

Brad Lin - BofA

Sunny Lin - UBS

Szeho Ng - China Renaissance

Gokul Hariharan - J.P. Morgan

Charlie Chan - Morgan Stanley

Ken Hsiang

Hello, I am Ken Hsiang, the Head of Investor Relations for ASE Technology Holdings. Welcome to our Third Quarter 2023 Earnings Release. Thank you for attending our conference call today. Please refer to our safe harbor notice on Page 2. All participants consent to having their voices and questions broadcast via participation in this event. If participants do not consent, please disconnect at this time.

I would like to remind everyone that the presentation that follows may contain forward-looking statements. These forward-looking statements are subject to a high degree of risk and our actual results may differ materially. For the purposes of this presentation, dollar figures are generally stated in new Taiwan dollars, unless otherwise indicated. As a Taiwan-based company, our financials are presented in accordance with Taiwan IFRS. Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those presented by our subsidiary using Chinese GAAP.

I am joined today by Joseph Tung, our CFO. For today's session, I will be giving the prepared remarks. Joseph will then be available to take your questions during the Q&A session that follows.

The overall environment for our businesses during the third quarter was relatively soft from an historical perspective. Devices related to new communications products introduced during the quarter generated a small pickup in demand, but, by and large, the post COVID inventory digestion and sub-optimal demand environment continued. For the third quarter, both our ATM and EMS businesses saw mild seasonal upticks. Our ATM businesses results were on the higher side of our expectations. We believe this was primarily attributable to higher than expected unplanned orders and the soft loading environment. Our customers have become more cautious when booking regular production forecasts on the expectation that there would be more capacity available when needed. We do, to a certain extent, try to apply an unplanned order rate to our outlooks, but for the third quarter unplanned orders were a bit higher than expected. These unplanned orders were sporadic and dispread and not isolated to any particular product type or market segment. For ATM factories, during the quarter, key equipment utilization rates were still relatively low averaging out in the mid 60s. Our EMS businesses pickup was slightly below our initial expectation. We believe this was due to some loading being pushed out into the fourth quarter.