日月光投資控股 (ASX) 2023 Q1 法說會逐字稿

Hello. I am Ken Hsiang, the Head of Investor Relations for ASE Technology Holdings. Welcome to our First Quarter 2023 Earnings Release. Thank you for attending our conference call today. Please refer to our safe harbor notice on Page 2.

你好。我是 ASE Technology Holdings 投資者關係主管 Ken Hsiang。歡迎來到我們的 2023 年第一季度收益發布。感謝您參加我們今天的電話會議。請參閱第 2 頁的安全港通知。

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.

所有參與者都同意通過參與此活動傳播他們的聲音和問題。如果參與者不同意，請此時斷開連接。

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.

我想提醒大家，接下來的演示文稿可能包含前瞻性陳述。這些前瞻性陳述具有高度風險，我們的實際結果可能存在重大差異。

For the purposes of this presentation, our 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.

出於本演示文稿的目的，除非另有說明，否則我們的美元數字通常以新台幣表示。作為一家台灣公司，我們的財務數據是根據台灣國際財務報告準則列報的。使用台灣 IFRS 呈現的結果可能與使用其他會計準則的結果存在重大差異，包括我們子公司使用中國 GAAP 呈現的結果。

I am joined today by Joseph Tung, our CFO. For today's call, I will be going over our financial results and outlook. Joseph will then be available to take your questions during the Q&A session to follow.

今天，我們的首席財務官 Joseph Tung 加入了我的行列。在今天的電話會議上，我將回顧我們的財務業績和展望。然後，Joseph 將在隨後的問答環節回答您的問題。

During our year-end 2022 earnings release, we reported that the company and the overall semiconductor industry was entering a period of inventory digestion. We touched upon the impending soft environment and noted prognosticating outlooks can be incredibly difficult, especially when trying to spot the end of an inventory correction. Our business during the first quarter ran expectedly soft, given that we expected many customers were going to be drawing down product inventories. For the large part, our customers generally met their near-term plans. However, towards the end of the first quarter, when many customers reviewed their channel inventory relative to their expectations. They realized their inventory depletion was happening slower than anticipated. Apparently, end markets had not performed as they expected, whether it be poor Lunar New Year sell-through or a missing corporate IT refresh, sluggishness and excess inventory persisted. For our ATM factories, during the quarter, key equipment utilization rates were hovering slightly above 60%. And given these levels are near-term record lows, our factories focused on how to lower ongoing expenses. Working hours and bonuses were trimmed, raw materials pricing was scrubbed with our vendors, projects were reviewed and reprioritized, all in the name of costing down. However, the soft loading environment did allow us to continue automating factory lines, scaling up new product introductions and completing R&D projects.

在我們發布 2022 年底財報時，我們報告稱公司和整個半導體行業正進入庫存消化期。我們談到了即將到來的軟環境，並指出預測前景可能非常困難，尤其是在試圖發現庫存調整結束時。鑑於我們預計許多客戶將減少產品庫存，因此我們在第一季度的業務表現出乎意料地疲軟。在很大程度上，我們的客戶總體上實現了他們的近期計劃。然而，在第一季度末，許多客戶檢查了他們的渠道庫存是否符合他們的預期。他們意識到庫存耗盡的速度比預期的要慢。顯然，終端市場並沒有像他們預期的那樣表現，無論是農曆新年銷售不佳還是企業 IT 更新缺失，持續低迷和庫存過剩。對於我們的 ATM 工廠，本季度關鍵設備利用率徘徊在略高於 60% 的水平。鑑於這些水平是近期的歷史低點，我們的工廠專注於如何降低持續開支。工作時間和獎金被削減，原材料定價與我們的供應商擦除，項目被審查並重新確定優先級，所有這些都是為了降低成本。然而，軟加載環境確實讓我們能夠繼續實現工廠生產線的自動化，擴大新產品的推出並完成研發項目。

Our EMS business entered into its seasonally soft period. The front half of the year generally acts as a preparation and buildup for the back half mass production builds. Our EMS business actually came in slightly better than our guidance last quarter. But as you will see, the overall macro environment did appear to have an impact, albeit somewhat smaller than the impact to our ATM business.

我們的 EMS 業務進入季節性疲軟期。前半年通常是為後半年量產建設做準備和積累。我們的 EMS 業務實際上比我們上個季度的指導略好。但正如您將看到的，整體宏觀環境似乎確實產生了影響，儘管比對我們 ATM 業務的影響要小一些。

With that, please turn to Page 3, where you will find our first quarter consolidated results. For the first quarter, we recorded fully diluted EPS of TWD1.30 and basic EPS of TWD1.36. Consolidated net revenues declined 26% sequentially and 9% year-over-year. We had a gross profit of TWD19.3 billion with a gross margin of 14.8%. Our gross margin declined 4.4 percentage points sequentially and 4.9 percentage points year-over-year. The margin declines are principally the result of inventory digestion and a weak macro environment.

然後，請轉到第 3 頁，您將在其中找到我們第一季度的綜合業績。第一季度，我們錄得 TWD1.30 的完全攤薄每股收益和 TWD1.36 的基本每股收益。綜合淨收入環比下降 26%，同比下降 9%。我們的毛利為 193 億元新台幣，毛利率為 14.8%。我們的毛利率環比下降 4.4 個百分點，同比下降 4.9 個百分點。利潤率下降主要是庫存消化和宏觀環境疲軟的結果。

Our operating expenses declined TWD2.7 billion sequentially and TWD0.7 billion annually. The declines were primarily attributable to lower profit sharing expenses across the company. Our operating expense percentage increased 0.8 percentage points sequentially and 0.3 percentage points year-over-year to 8.9%. The operating expense percentage increases were primarily related to lower revenues during the quarter.

我們的運營費用環比下降了 27 億新台幣，每年下降了 7 億新台幣。下降的主要原因是整個公司的利潤分享費用減少。我們的營業費用百分比環比上升 0.8 個百分點，同比上升 0.3 個百分點至 8.9%。營業費用百分比的增加主要與本季度收入下降有關。

Operating profit was TWD7.7 billion, down TWD12.1 billion sequentially and TWD8.4 billion year-over-year. Operating margin was 5.9%, declining 5.2 percentage points sequentially and 5.3 percentage points year-over-year. During the quarter, we had a net non-operating gain of TWD0.2 billion. This amount includes net interest expense of TWD1.1 billion.

營業利潤為 77 億新台幣，環比下降 121 億新台幣，同比下降 84 億新台幣。營業利潤率為 5.9%，環比下降 5.2 個百分點，同比下降 5.3 個百分點。本季度，我們的非經營淨收益為新台幣 2 億元。該數額包括 11 億新台幣的淨利息支出。

Tax expense for the quarter was TWD1.8 billion. The effective tax rate for the quarter was 22.6%. The rate variance during the quarter was largely due to incremental controlled foreign company tax expenses. We believe that our annual tax rate will be between 20.5% to 21%.

本季度的稅收支出為 18 億新台幣。本季度的有效稅率為 22.6%。本季度的匯率差異主要是由於受控外國公司稅費的增加。我們相信我們的年稅率將在 20.5% 至 21% 之間。

Net income for the quarter was TWD5.8 billion, representing a decline of TWD9.9 billion sequentially and TWD7.1 billion year-over-year.

本季度淨收入為 58 億新台幣，環比下降 99 億新台幣，同比下降 71 億新台幣。

The NT dollar appreciated 3.05% against the U.S. dollar during the first quarter. From a sequential perspective, we estimate the NT dollar appreciation had a 0.8 percentage point negative impact to the company's gross and operating margins. From a year-over-year perspective, we estimate that the depreciating NT dollar had a 2.63 percentage point positive impact to gross and operating margins. As a rule of thumb, for every percent the NT dollar appreciates, we see a corresponding 0.29 percentage point impact to our holding company gross margin.

第一季度，新台幣兌美元升值 3.05%。從連續的角度來看，我們估計新台幣升值對公司的毛利率和營業利潤率產生了 0.8 個百分點的負面影響。從同比角度來看，我們估計新台幣貶值對毛利率和營業利潤率產生了 2.63 個百分點的積極影響。根據經驗，新台幣每升值一個百分點，我們就會看到我們控股公司的毛利率相應受到 0.29 個百分點的影響。

On the bottom of the page, we provide key P&L line items without the inclusion of PPA-related expenses. Consolidated gross profit, excluding PPA expenses, would be TWD20.3 billion with a 15.5% gross margin. Operating profit would be TWD8.9 billion with an operating margin of 6.8%. Net profit would be TWD7 billion with a net margin of 5.3%. Basic EPS, excluding PPA expenses, would be TWD1.63.

在頁面底部，我們提供了不包括 PPA 相關費用的關鍵 P&L 行項目。不包括 PPA 費用的綜合毛利為 203 億新台幣，毛利率為 15.5%。營業利潤為新台幣 89 億元，營業利潤率為 6.8%。淨利潤為 70 億新台幣，淨利率為 5.3%。不包括 PPA 費用的基本每股收益為 TWD1.63。

On Page 4 is a graphical presentation of our consolidated financial performance. You can see the impact of the current weak environment here. Unusually soft loading even for a correction environment are leading to lower revenues and a low utilization rate environment impacting our ATM and EMS businesses.

第 4 頁是我們綜合財務業績的圖形展示。你可以在這裡看到當前弱環境的影響。即使在校正環境中，異常的軟加載也會導致收入降低和利用率低的環境，從而影響我們的 ATM 和 EMS 業務。

On Page 5 is our ATM P&L. It is worth noting here that the ATM revenue reported here contains revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses. For the first quarter 2023, revenues for our ATM business were TWD73.3 billion, down TWD21 billion from the previous quarter and TWD10.7 billion from the same period last year. This represents a 22% decline sequentially and a 13% decline year-over-year. This decline though steep, was in line with our outlook.

第 5 頁是我們的 ATM P&L。此處值得注意的是，此處報告的 ATM 收入包含在控股公司層面消除的與我們的 ATM 和 EMS 業務之間的公司間交易相關的收入。 2023 年第一季度，我們的 ATM 業務收入為 733 億新台幣，環比減少 210 億新台幣，同比減少 107 億新台幣。這表示連續下降 22%，同比下降 13%。這種下降雖然陡峭，但符合我們的預期。

Gross profit for our ATM business was TWD14.7 billion, down TWD11.5 billion sequentially and TWD8.4 billion year-over-year. Gross profit margin for our ATM business was 20.1%, down 7.7 percentage points sequentially and 7.4 percentage points year-over-year. The overall margin declines are the result of lower loading due to customer inventory digestion and the weak macro environment.

ATM 業務的毛利為 147 億新台幣，環比下降 115 億新台幣，同比下降 84 億新台幣。 ATM 業務的毛利率為 20.1%，環比下降 7.7 個百分點，同比下降 7.4 個百分點。整體利潤率下降是由於客戶庫存消化和疲軟的宏觀環境導致裝載量下降的結果。

During the first quarter, operating expenses were TWD8.3 billion, down TWD2.1 billion sequentially and TWD0.7 billion year-over-year. The declines in operating expenses were primarily driven by lower labor costs due to lower profit sharing and bonus accrual. Despite having significantly lower absolute operating expenses, their declines did not keep up with the pace that revenues declined. Our operating expense percentage for the quarter was 11.4%, up 0.4 percentage points sequentially and 0.6 percentage points year-over-year. During the first quarter, operating profit was TWD6.4 billion, representing a decline of TWD9.4 billion quarter-over-quarter and TWD7.6 billion year-over-year. Operating margin was 8.7%, declining 8 percentage points sequentially and year-over-year.

第一季度營業費用為 83 億元新台幣，環比減少 21 億元新台幣，同比減少 7 億元新台幣。營業費用的下降主要是由於較低的利潤分享和應計獎金導致的勞動力成本下降。儘管絕對運營費用顯著降低，但它們的下降速度並沒有跟上收入下降的速度。我們本季度的營業費用百分比為 11.4%，環比上升 0.4 個百分點，同比上升 0.6 個百分點。第一季度營業利潤為 64 億元新台幣，環比減少 94 億元新台幣，同比減少 76 億元新台幣。營業利潤率為 8.7%，環比和同比下降 8 個百分點。

For foreign exchange, we estimate that the NT to U.S. dollar exchange rate had a 1.52 percentage point impact on our ATM sequential margins and a 4.55 percentage point impact on a year-over-year basis. Without the impact of PPA-related depreciation and amortization, ATM gross profit margin would be 21.3% and operating profit margin would be 10.3%.

對於外匯，我們估計新台幣兌美元的匯率對我們的 ATM 連續利潤率產生了 1.52 個百分點的影響，同比產生了 4.55 個百分點的影響。如果不考慮 PPA 相關折舊和攤銷的影響，ATM 毛利率將為 21.3%，營業利潤率為 10.3%。

On Page 6, you'll find a graphical representation of our ATM P&L. You'll note here the impact of a semi-fixed cost base with a low correction level loading.

在第 6 頁，您將找到我們 ATM P&L 的圖形表示。您會在這裡註意到具有低修正水平負載的半固定成本基礎的影響。

On Page 7 is our ATM revenue by market segment. Even though the current softer loading environment is fairly broad-based, we do see the communications market segment inventory digestion to be more pronounced than other market segments.

第 7 頁是我們按細分市場劃分的 ATM 收入。儘管當前疲軟的負載環境基礎相當廣泛，但我們確實看到通信細分市場的庫存消化比其他細分市場更為明顯。

On Page 8, you will find our ATM revenue by service type. There isn't a significant change here, but the advanced packaging side of the business is somewhat more impacted.

在第 8 頁，您將按服務類型找到我們的 ATM 收入。這裡沒有重大變化，但業務的先進封裝方面受到的影響更大。

On Page 9, you can see the first quarter results of our EMS business and a graphical representation of its market segment allocation. During the quarter, demand was impacted by an overall weaker SiP demand environment, along with our typical seasonality. During the first quarter, EMS revenues were TWD57.7 billion, declining TWD26.2 billion or 31% sequentially and TWD3.4 billion or 6% year-over-year.

在第 9 頁上，您可以看到我們 EMS 業務的第一季度業績及其細分市場分配的圖形表示。在本季度，需求受到整體較弱的 SiP 需求環境以及我們典型的季節性的影響。第一季度，EMS 收入為 577 億新台幣，環比下降 262 億新台幣或 31%，同比下降 34 億新台幣或 6%。

Our EMS business' gross margin declined 1.4 percentage points, while our operating margin sequentially declined 2.4 percentage points. These sequential declines were primarily driven by seasonally soft loading and, to a smaller extent, a soft electronics demand environment.

我們的 EMS 業務的毛利率下降了 1.4 個百分點，而我們的營業利潤率環比下降了 2.4 個百分點。這些環比下降主要是由季節性疲軟的負載驅動的，在較小程度上是由疲軟的電子產品需求環境驅動的。

Our EMS first quarter operating profit was TWD1.3 billion, down TWD2.7 billion sequentially and TWD0.9 billion annually. Given the overall quarter decline significantly as compared to last quarter, the percentage share information here may be somewhat biased.

我們的 EMS 第一季度營業利潤為 13 億新台幣，環比下降 27 億新台幣，每年下降 9 億新台幣。鑑於與上一季度相比整體季度下降顯著，此處的百分比份額信息可能有些偏差。

For our EMS market segment, our Consumer and Communication segments declined off of their seasonal peaks into their typical trough periods, while our Computing segment was also impacted by inventory corrections. Our Industrial and Automotive segments were more resilient and flattish on an absolute dollar perspective. But from a percentage of business perspective, the relative percentage share increased sharply. It is worth noting here that from a year-over-year perspective, our Automotive segment grew close to 30% year-over-year.

對於我們的 EMS 細分市場，我們的消費和通信細分市場從季節性高峰期下降到典型的低谷期，而我們的計算細分市場也受到庫存調整的影響。從絕對美元的角度來看，我們的工業和汽車部門更具彈性和持平。但從業務佔比來看，相對占比大幅提升。這裡值得注意的是，從同比的角度來看，我們的汽車部門同比增長接近 30%。

On Page 10, you will find key line items from our balance sheet. At the end of the quarter, we had cash, cash equivalents and current financial assets of TWD68.4 billion. Our total interest-bearing debt was down TWD12 billion to TWD190.3 billion. Total unused credit lines amounted to TWD337.2 billion. Our EBITDA for the quarter was TWD23.8 billion. Net debt to equity was 42% at the end of the quarter.

在第 10 頁，您將找到我們資產負債表中的關鍵項目。本季度末，我們擁有現金、現金等價物和流動金融資產 684 億元新台幣。我們的有息債務總額減少新台幣 120 億元至新台幣 1,903 億元。未使用的信貸額度總額達 3,372 億元新台幣。我們本季度的 EBITDA 為 238 億新台幣。截至本季度末，淨債務股本比為 42%。

On Page 11, you will find our equipment capital expenditures. Machinery and equipment capital expenditures for the first quarter in U.S. dollars totaled $231 million, of which $101 million were used in packaging operations, $90 million in testing operations, $32 million in EMS operations and $8 million in interconnect material operations and others. Given the overall slowdown within the industry, we are taking incremental action to push out more of our originally planned capital expenditures during the year. However, we will continue to spend on implementing incremental automation capabilities, including additional investments in our lights out factories. Current EBITDA was USD0.9 billion relative to our capital expenditures of $0.2 billion.

在第 11 頁，您會找到我們的設備資本支出。第一季度機器設備資本支出以美元計總計2.31億美元，其中1.01億美元用於封裝業務，9000萬美元用於測試業務，3200萬美元用於EMS業務，800萬美元用於互連材料業務等。鑑於行業整體放緩，我們正在採取漸進行動，以在年內推出更多原計劃的資本支出。但是，我們將繼續投資實施增量自動化功能，包括對我們的熄燈工廠進行額外投資。當前的 EBITDA 為 9 億美元，而我們的資本支出為 2 億美元。

For our outlook, we will first address our EMS business. Our EMS business will continue its typically soft season during the first half of the year. However, based on continued relative strength within its Automotive business, paired with some order improvement in our Consumer and Computing segments, we are looking for a slight pickup in business during the second quarter relative to the first. Similarly, margins should move off our expected trough and improve roughly 50 basis points. From a longer perspective, we continue to expect a strong ramp during the third quarter with the peak during the fourth quarter, primarily driven by new product launches.

對於我們的展望，我們將首先解決我們的 EMS 業務。我們的 EMS 業務將在今年上半年繼續其通常的淡季。然而，基於其汽車業務的持續相對強勁，加上我們的消費和計算部門的訂單有所改善，我們預計第二季度的業務相對於第一季度會有小幅回升。同樣，利潤率應該會脫離我們預期的低谷並提高大約 50 個基點。從更長遠的角度來看，我們繼續預計第三季度將出現強勁增長，第四季度將達到頂峰，這主要是受新產品發布的推動。

Continuing our earlier comments about our ATM business. At the end of the first quarter, what became more apparent was that the expected improvement in the macroeconomic environment did not materialize. Instead, world government's continued aggressive policy trying to curb hyperinflation. Unintendedly, this even led to separate banking crisis in the U.S. and surprisingly, in Switzerland. Meanwhile, more and more consumers and businesses around the world are grappling with spreading higher energy prices that initially stemmed from supply shocks related to the Russia-Ukraine war. And rather than seeing an overall post-COVID recovery and a return of electronic spending during and post the Lunar New Year, we, along with our customers, saw consumers instead catching up on spending on other items like services, travel and leisure.

繼續我們之前對我們的 ATM 業務的評論。一季度末，更為明顯的是，宏觀經濟環境的預期改善並未成為現實。相反，世界政府繼續採取積極的政策試圖遏制惡性通貨膨脹。無意中，這甚至導致了美國和瑞士的單獨銀行業危機。與此同時，全球越來越多的消費者和企業正在努力應對能源價格上漲的蔓延，能源價格上漲最初源於與俄烏戰爭相關的供應衝擊。在農曆新年期間和之後，我們並沒有看到 COVID 後的整體復甦和電子消費的回歸，而是我們和我們的客戶看到消費者在服務、旅遊和休閒等其他項目上的消費有所增加。

It should be noted that our customer sell-through of their devices are generally not visible to us. And usually, inventory draw and replenishment are in sync. With this current inventory digestion period, customers are selling inventory without the action of replenishing inventory, which gives us even less visibility. With wafer banks fully loaded, we basically can only wait for our customers' signal to restart production. And given the lack of recovery, a broad set of customers have communicated to us that their restocking will most likely happen later than anticipated. What was originally scheduled to ramp during the May, June time frame now has been pushed back into the third quarter.

應該注意的是，我們通常看不到客戶設備的銷售情況。通常，庫存抽取和補貨是同步進行的。在當前這個庫存消化期，客戶在沒有補充庫存的情況下銷售庫存，這讓我們的可見性更小。 wafer bank滿負荷生產，我們基本上只能等待客戶的重啟生產信號。鑑於缺乏復甦，大量客戶已向我們表示，他們的補貨很可能會比預期晚。原定於 5 月、6 月的時間框架內增加的量現在已推遲到第三季度。

On a somewhat more positive note, we do see some level of rush orders sporadically happening across our ATM factories. We remain optimistic and expect that rush orders should continue to rise during the second quarter as various product restocking and new product launches start to happen. However, with a large amount of orders being pushed out for the second quarter as a whole, we expect continued sluggishness and a suboptimal loading environment. As a result, we effectively see revenues much the same as the first quarter.

從更積極的角度來看，我們確實看到我們的 ATM 工廠偶爾會出現某種程度的緊急訂單。我們保持樂觀，並預計隨著各種產品補貨和新產品發布的開始，第二季度的緊急訂單將繼續增加。然而，隨著整個第二季度的大量訂單被推出，我們預計將持續低迷和次優裝載環境。因此，我們實際上看到收入與第一季度大致相同。

From our cost perspective, we are actively pursuing various avenues to trim costs, including expanding our automation efforts. However, given the higher utility rates instituted by the Taiwan government effective April 1, increasing electricity rates by 17% and the higher summer rates in the back half of the second quarter, our utility costs will rise sequentially. We currently see the rate increase and the start of the summer rate season is expected to have a 0.5 percentage point negative impact to our gross margin when compared to the first quarter. However, we are hopeful that a number of cost savings efforts will bear fruit during the quarter, and we will be able to offset most, if not all, of the impact of the utility rate increases. Such offset is not guaranteed, but we are targeting to keep our gross margin at a similar level with the first quarter.

從我們的成本角度來看，我們正在積極尋求各種途徑來削減成本，包括擴大我們的自動化工作。然而，鑑於台灣政府自 4 月 1 日起提高公用事業費率，將電費提高 17%，以及第二季度後半段夏季費率較高，我們的公用事業成本將依次上升。我們目前看到利率上漲，夏季利率季節的開始預計與第一季度相比對我們的毛利率產生 0.5 個百分點的負面影響。然而，我們希望本季度的一些成本節約工作能夠取得成果，我們將能夠抵消大部分（如果不是全部）公用事業費率上漲的影響。這種抵消不能保證，但我們的目標是將我們的毛利率保持在與第一季度相似的水平。

And if we step back and look at the bigger picture at this point. Despite all the distracting noise related to this correction, we believe we are in the process of proving that we have a [fundamentally] improved business. We've already seen higher margins through the cycle peak. Now, we are seeing structurally higher trough margins going through the cycle bottom. We are seeing pricing resiliency and the minimization of irrational competition. We also see our scale of manufacturing continue to give us competitive advantages in the form of lower manufacturing costs, thereby maintaining customer resilience. We basically see an industry possessing a wider moat with ASE outpacing its competition.

如果我們現在退後一步，從大局著眼。儘管與此修正有關的所有分散注意力的噪音，我們相信我們正在證明我們有一個[從根本上]改進的業務。我們已經在周期高峰期看到了更高的利潤率。現在，我們看到結構性更高的波谷利潤率正在經歷週期底部。我們看到定價彈性和非理性競爭的最小化。我們還看到我們的製造規模繼續以降低製造成本的形式為我們提供競爭優勢，從而保持客戶的彈性。我們基本上看到一個行業擁有更寬的護城河，而 ASE 超越了競爭對手。

We would like to summarize our outlook for the second quarter as follows: for our ATM business in NT dollar terms, our ATM second quarter 2023 revenues and gross margin should be similar with the revenues and gross margin of the first quarter 2023. For our EMS business in NT dollar terms, our EMS second quarter 2023 revenues should increase mid-single-digit percentage-wise quarter-over-quarter. Our EMS second quarter 2023 operating margin should improve by 0.5 percentage points versus the first quarter 2023.

我們想將我們對第二季度的展望總結如下：對於以新台幣計算的 ATM 業務，我們的 ATM 2023 年第二季度收入和毛利率應與 2023 年第一季度的收入和毛利率相似。對於我們的 EMS以新台幣計算的業務，我們的 EMS 2023 年第二季度收入應按季度增長中個位數百分比。我們的 EMS 2023 年第二季度營業利潤率應比 2023 年第一季度提高 0.5 個百分點。

This concludes our prepared remarks. I'd like to open the floor for Q&A.

我們準備好的發言到此結束。我想打開問答環節。

(Operator Instructions) Our first question is from Mr. Randy Abrams of Credit Suisse.

（操作員說明）我們的第一個問題來自瑞士信貸的蘭迪艾布拉姆斯先生。

Okay. Yes. I wanted to ask the first question. If you could talk a little more about the outlook. First, for rush orders, if you could talk about the areas you're seeing rush orders? And then for the area of resilience, if you could go through the view, Automotive, if you see auto, and I think you mentioned Industrial, if you see those areas holding up?

好的。是的。我想問第一個問題。如果你能多談談前景。首先，對於加急訂單，您能否談談您看到加急訂單的領域？然後對於彈性領域，如果你能通過這個觀點，汽車，如果你看到汽車，我想你提到了工業，如果你看到那些領域保持堅挺？

And the second part of that first question is for the spillover. How much do you see the weakness spilling into third quarter? Do you think we're back to normal seasonal third quarter? And what do you view as a reasonable normal for third quarter? So just curious that as well.

第一個問題的第二部分是關於溢出的。您認為第三季度的疲軟程度有多大？你認為我們回到了正常的季節性第三季度嗎？您認為第三季度的合理正常情況是什麼？所以也很好奇。

I think in terms of rush orders, I think we've been seeing sporadic rush orders in different areas, although more seems to be in the Consumer sector. We continue -- I think we believe that we will continue to see some rush orders coming in the second quarter as well. But in terms of its volume and magnitude, I think it's difficult to predict at this point. Overall, I think the overall market softness seems to be persisting into second quarter. And going into third, I think we'll definitely see a rebound because of the new products being launched and some of the customers, as Ken pointed out, the restocking for new product launches will be starting in the third quarter. So we'll be seeing an uptick in third quarter. Although for the whole year, I think the overall situation is softer than what we have been expecting. I think in the beginning of the first quarter, we were projecting that we're kind of estimating that for the whole year, we could be seeing a flat year to high-single-digit decline in terms of our overall ATM revenue. But now we are of the view that the full year prospect should look like high-single to low-teen kind of a decline in the -- for the whole year.

我認為就緊急訂單而言，我認為我們一直在不同領域看到零星的緊急訂單，儘管消費領域似乎更多。我們繼續 - 我認為我們相信我們也將在第二季度繼續看到一些緊急訂單。但就其數量和規模而言，我認為目前很難預測。總的來說，我認為整體市場疲軟似乎會持續到第二季度。進入第三，我認為我們肯定會看到反彈，因為新產品的推出和一些客戶，正如 Ken 指出的那樣，新產品發布的補貨將在第三季度開始。因此，我們將在第三季度看到增長。雖然從全年來看，我認為總體情況比我們預期的要軟。我認為在第一季度初，我們預計我們在某種程度上估計全年，我們的 ATM 總收入可能會出現持平到高個位數的下降。但現在我們認為，全年前景應該看起來像從高單到低雙的下降——全年。

And in terms of the Automotive, I think we have made very good progress in terms of expanding that part of the business, both from ATM, as well as an EMS perspective. I think that momentum is still going on. I think comparing to the other sectors, Automotive continues to be more resilient than the others. We are still -- we're expecting double-digit growth for this year, and we will continue to try to penetrate this market further through our automation of our factory and also expanding our product line or service offerings.

在汽車方面，我認為我們在擴展這部分業務方面取得了很好的進展，無論是從 ATM 還是 EMS 的角度來看。我認為這種勢頭仍在繼續。我認為與其他行業相比，汽車行業仍然比其他行業更具彈性。我們仍然 - 我們預計今年會有兩位數的增長，我們將繼續嘗試通過我們工廠的自動化以及擴大我們的產品線或服務範圍來進一步滲透這個市場。

Okay. And second question, just on the cost structure, actually, good progress to bring it down the OpEx, especially ATM. It sounds like most of it was the bonus accrual. From this level, though, because you mentioned that ongoing cost reductions, how should we see the OpEx trending? Is there anything you've taken out beyond the bonus expense that brings it to a...

好的。第二個問題，關於成本結構，實際上，在降低 OpEx 方面取得了良好進展，尤其是 ATM。聽起來大部分是應計獎金。但是，從這個層面來看，因為您提到了持續的成本削減，我們應該如何看待 OpEx 趨勢？除了獎金支出之外，你有沒有拿出任何東西來……

I think we're actually facing quite a challenging environment from the cost factor -- cost aspect. We're looking at higher material costs that we've -- that's continued to roll forward. And we're seeing higher utility costs. We're seeing higher net interest expenses because of the rate hike. So it's quite challenging, but we have been implementing quite a bit of our cost reduction programs throughout the factories. And we are kind of confident that we can maintain our OpEx ratio for ATM, as well as EMS businesses at the -- our target is to maintain the OpEx ratio at the same level as last year.

我認為從成本因素來看，我們實際上面臨著相當具有挑戰性的環境——成本方面。我們正在考慮更高的材料成本——這將繼續向前推進。我們看到更高的公用事業成本。由於加息，我們看到更高的淨利息支出。所以這非常具有挑戰性，但我們一直在整個工廠實施相當多的成本削減計劃。我們有信心我們可以將 ATM 以及 EMS 業務的運營支出比率保持在 - 我們的目標是將運營支出比率維持在與去年相同的水平。

Our next question is from Mr. Gokul Hariharan of JPMorgan.

我們的下一個問題來自摩根大通的 Gokul Hariharan 先生。

Right. First of all, could you talk a little bit more on where are the areas you're seeing, I think previously, we were looking for double-digit growth in Q2. Is it mainly in Communication that you're seeing the slower-than-expected momentum? Or is it a little bit more broad-based?

正確的。首先，你能否多談談你所看到的領域，我想以前，我們正在尋找第二季度的兩位數增長。主要是在通信方面，您看到的勢頭低於預期嗎？或者它的基礎更廣泛一點？

And given that the pricing -- sorry, the weakness has been more persistent. Could you also give us some view on how you think about pricing? And what should we be expecting for CapEx this year? It looks like CapEx already come down a fair bunch in Q1, but maybe some outlook for CapEx this year?

鑑於定價 - 抱歉，弱點更加持久。您能否也談談您對定價的看法？我們應該對今年的資本支出有何期待？看起來資本支出在第一季度已經下降了很多，但今年的資本支出可能會有一些前景？

I think it's fair to say that we were banking on a better situation with the Communication sector, particularly when we're seeing most of the Taiwanese customers started the inventory digestion earlier. And -- but I think the overall macroeconomic situation did not improve and the end demand seems to be -- still remain to be soft. So we're seeing the softness persisting into second quarter. And hopefully, this will start to turn around in the third quarter.

我認為可以公平地說，我們寄希望於通信行業的情況會好轉，尤其是當我們看到大多數台灣客戶較早開始消化庫存時。而且——但我認為總體宏觀經濟形勢沒有改善，最終需求似乎仍然疲軟。所以我們看到疲軟持續到第二季度。希望這將在第三季度開始好轉。

I think the -- right now, we're still seeing low price elasticity, meaning that even we lower our prices, it doesn't really bring us more volume. So I think at this point, we still think the pricing is resilient, particularly for -- in our case, being the preferred vendor of our customers, I think the -- we are more resilient in protecting our pricing. We will continue to pursue or seek for sort of a pricing structure to meet both our customers and ourselves meeting our goals and try to protect our margin and return better.

我認為 - 現在，我們仍然看到價格彈性較低，這意味著即使我們降低價格，也不會真正為我們帶來更多的銷量。所以我認為在這一點上，我們仍然認為定價是有彈性的，特別是對於 - 在我們的情況下，作為我們客戶的首選供應商，我認為 - 我們在保護我們的定價方面更有彈性。我們將繼續追求或尋求某種定價結構，以滿足我們的客戶和我們自己的目標，並努力保護我們的利潤和更好的回報。

Got it. And could you also talk a little bit about the CapEx outlook for the year? And also, there were certain customers and funding capacity that you had some loading guarantees and loading arrangement agreements. How have those progressed given that the overall utilization, like Ken mentioned, is closer to the 60% mark? Are customers still kind of retaining those? Or you already renegotiated most of those? And if they are renegotiated, how do the terms look like today that maybe a year back?

知道了。您能否也談談今年的資本支出前景？而且，有一定的客戶和資金能力，你有一些裝貨保證和裝貨安排協議。考慮到總體利用率（如 Ken 提到的那樣）接近 60% 大關，這些進展如何？客戶還會保留這些嗎？或者你已經重新談判了其中的大部分？如果重新談判，這些條款在今天可能會像一年前一樣？

I think the LTAs has served its purposes, has being run down per its expiring period. As I mentioned, we will continue to seek for sort of a pricing structure for -- to serve both our customers, as well as our own needs. In terms of CapEx, I think in the first quarter, we already mentioned that whole year CapEx for the year will be a few TWD100 million lower than previous year. But at this point, given the softness persisting, we are lowering that CapEx budget by another couple of hundred million for the year. And also the combination of the CapEx will be a bit different from we previously anticipated. I think right now, in terms of assembly, it will be about 53% of the overall and test. Last year, we have about 34% of our CapEx being spent on tests. The ratio will be reduced to about 25% for this year. In terms of material, we're maintaining at 3% to 4%. And for EMS, actually, we are expanding the CapEx because of the new projects that we are taking on, particularly in the automotive sector. So, the EMS CapEx will represent roughly 15% to 16% of our overall.

我認為 LTA 已達到其目的，已在其到期期限內逐漸減少。正如我所提到的，我們將繼續尋求一種定價結構——為我們的客戶和我們自己的需求提供服務。在資本支出方面，我認為在第一季度，我們已經提到全年的資本支出將比去年減少幾台幣 1 億。但在這一點上，鑑於持續疲軟，我們將今年的資本支出預算再降低幾億美元。資本支出的組合也將與我們之前預期的有所不同。我認為現在，就組裝而言，它將佔整體和測試的 53% 左右。去年，我們將大約 34% 的資本支出用於測試。今年該比例將降至25%左右。在材料方面，我們維持在3%到4%。對於 EMS，實際上，由於我們正在進行的新項目，特別是在汽車領域，我們正在擴大資本支出。因此，EMS 資本支出將占我們總體支出的大約 15% 至 16%。

We have a question from Mr. Rick Hsu of Daiwa Securities.

我們有一個來自大和證券的 Rick Hsu 先生的問題。

Joseph, can you hear me?

約瑟夫，你能聽到我說話嗎？

Yes, you're kind of breaking off. So -- yes, I can hear you now.

是的，你有點分手了。所以 - 是的，我現在可以聽到你的聲音了。

Okay. Sorry for that. Technical issue here. Just want to double check on the housekeeping questions about your utilization rate of 60% roughly, that's for the Q1 across the board of your packaging and testing, right?

好的。對不起。技術問題在這裡。只是想仔細檢查有關您 60% 利用率的內務管理問題，這是針對您的封裝和測試的 Q1，對嗎？

Pretty much it's across the board. I think the same level of utilization will persist into second quarter. And going into second half of the year, I think it was -- third quarter, it should substantially improve, and we're expecting at some point, the utilization rate should reach around 80% in the back half of the year.

幾乎是全面的。我認為相同的利用率水平將持續到第二季度。進入今年下半年，我認為這是 - 第三季度，它應該會大幅改善，我們預計在某個時候，利用率應該會在今年下半年達到 80% 左右。

Okay. Great. That's pretty helpful. And the second question is about your profitability, especially your gross margin. Would that still be above the pre-COVID 19 level? When you guys move into second half, when all the operations improve and the utilization rates go to the optimal level, is that still effective?

好的。偉大的。這很有幫助。第二個問題是關於你的盈利能力，尤其是你的毛利率。那還會高於 COVID 19 之前的水平嗎？當你們進入下半場，當所有的運營都在改善，利用率達到最佳水平時，那還有效嗎？

I think our target is still try to maintain our gross profit margin to the new structural margin range of mid-20% to 30%. I think we still have a shot in maintaining that. But if the overall decline -- revenue decline exceeds around 10%, I think we could look at another 1% to 2% drop on this from our original target.

我認為我們的目標仍然是努力將我們的毛利率維持在 20% 至 30% 的新結構性利潤率範圍內。我認為我們仍有機會保持這一點。但如果整體下降 - 收入下降超過 10%，我認為我們可以考慮從我們最初的目標再下降 1% 到 2%。

We have a question from Laura Chen of Citigroup.

花旗集團的 Laura Chen 向我們提出了一個問題。

Next question is from Brad Lin of BOA.

下一個問題來自 BOA 的 Brad Lin。

I have 2 questions. One is on the testing part. So the mix of our CapEx on the testing lowered to around 25%. I remember last time we talked about that, we would like this testing business to be one of our key drivers going forward. So, well, would you please discuss what were the barriers there? And what changed the mind for our testing business target? And then -- that's my first question.

我有兩個問題。一個是在測試部分。因此，我們在測試中的資本支出組合降至 25% 左右。我記得上次我們談到這一點時，我們希望這項測試業務成為我們前進的關鍵驅動力之一。那麼，好吧，請您討論一下那裡的障礙是什麼？是什麼改變了我們測試業務目標的想法？然後——這是我的第一個問題。

Yes. I think our drive into test business is continuing, although there will be periodic modifications or revisions in our CapEx plan based on the current capacity, as well as the incoming demand for our services. So, there will be periodic or adjustments in terms of CapEx. But the overall goal remains the same. We'll continue to build that part of the business. And we still believe that the potential of test business is greater than assembly. And our target remains that we want to bring our test business to its historical peak of about 18% of our overall ATM business.

是的。我認為我們將繼續推動測試業務，儘管我們的資本支出計劃會根據當前容量以及對我們服務的未來需求進行定期修改或修訂。因此，在資本支出方面會有周期性或調整。但總體目標保持不變。我們將繼續建立這部分業務。而且我們仍然認為測試業務的潛力大於組裝。我們的目標仍然是，我們希望將我們的測試業務提升到占我們整體 ATM 業務約 18% 的歷史高峰。

Got it. And my second question will be on the ABF substrate. So last time we mentioned that the ABF supply improved, but not completely loosened. And would you please tell us that what will it be like for the second half of the year with the potential demand rebound?

知道了。我的第二個問題是關於 ABF 底物的。所以上次我們提到ABF供應有所改善，但並沒有完全放鬆。您能否告訴我們下半年隨著潛在需求的反彈會是什麼樣子？

I think most of the items returned to a normal lead time, and we are not seeing further ABF constrain at this point. And if we look at the second half, I think ABF should not be -- should not continue to be a constraint for us now.

我認為大多數項目都恢復了正常的交貨時間，目前我們沒有看到 ABF 進一步受到限制。如果我們看下半場，我認為 ABF 不應該 - 現在不應該繼續成為我們的約束。

Our next question is from Laura Chen of Citigroup.

我們的下一個問題來自花旗集團的 Laura Chen。

Can you hear me?

你能聽到我嗎？

Yes.

是的。

My line just dropped previously. I got a question on the automotive revenue. I'm just wondering, do you have any breakdown between the ATM and also the EMS business of your automotive sales? And also, do you see any potential softness would happen in second half, since some of the foundry makers they cited earlier, like automotive orders seems to be slowing down into second half and also the IDMs, their inventory level and also lead time since also kind of slower, right? I'm just wondering your view on the automotive business so far seems to be resilient at the moment. But do you see any potential softness into second half?

我的線路之前剛剛掉線。我有一個關於汽車收入的問題。我只是想知道，您的汽車銷售的 ATM 和 EMS 業務之間是否存在任何故障？而且，你是否認為下半年會出現任何潛在的疲軟，因為他們之前提到的一些代工製造商，比如汽車訂單似乎在下半年放緩，還有 IDM，他們的庫存水平和交貨時間也開始放緩有點慢，對吧？我只是想知道你目前對汽車業務的看法似乎是有彈性的。但你認為下半年有任何潛在的疲軟嗎？

For last year, I think the overall automotive revenue for us is over TWD1.6 billion, with the split from ATM -- between ATM and EMS, ATM is close to TWD1 billion. EMS is over -- close to -- somewhere close to TWD700 million. And we're expecting this part of the business to have a relatively resilient growth for the year, and we're still looking at double-digit growth for both EMS and ATM.

去年，我認為我們的汽車總收入超過 16 億新台幣，與 ATM 分開 - 在 ATM 和 EMS 之間，ATM 接近 10 億新台幣。 EMS 結束了——接近——接近 7 億新台幣。我們預計這部分業務今年將有相對彈性的增長，我們仍然期待 EMS 和 ATM 的兩位數增長。

And as -- in terms of the overall automotive business prospect, I think there is a lot of noises so far from our own forecast or from the business outlook that we are seeing from our end. I think it still looks very resilient. And I think part of the reason is that we are -- aside from the organic growth, we are also gaining shares in this part of the business. So, there may or may not be some softness going into the second half of the year. But as far as our own business, I think the combination of organic as well as share gaining, I think that's really the [lay] of the prospect for us in terms of our automotive business.

而且——就整體汽車業務前景而言，我認為到目前為止，我們自己的預測或我們從我們這端看到的業務前景中存在很多噪音。我認為它看起來仍然很有彈性。我認為部分原因是我們——除了有機增長，我們也在這部分業務中獲得份額。因此，今年下半年可能會或可能不會出現一些疲軟。但就我們自己的業務而言，我認為有機和份額增加的結合，我認為就我們的汽車業務而言，這確實是我們前景的 [lay]。

Okay. And my second question is also about the ATM business. We know that, given the weakness, we probably will slow down the CapEx expansion in this space. But on the other hand, we are seeing like a high-computing PC or AI, the trend seems to be more structured. So from ASE Group perspective, just wondering that what's your position now? And any chance you may also break into these, like AI chip or a high-computing PC, maybe find some way to cooperate with the foundry makers or to pursue your own solution? So can you elaborate more on your strategy and your business plan on this space?

好的。我的第二個問題也是關於 ATM 業務的。我們知道，鑑於弱點，我們可能會放慢該領域的資本支出擴張。但另一方面，我們看到像高計算 PC 或 AI 一樣，趨勢似乎更加結構化。所以從 ASE Group 的角度來看，只是想知道你現在的立場是什麼？有沒有機會你也可以突破這些，比如AI芯片或者高計算PC，也許會想辦法和代工廠商合作或者尋求自己的解決方案？那麼你能詳細說明你在這個領域的戰略和商業計劃嗎？

I think the AI chips definitely presents a good potential for us, although this is still at a very early stage. And so we cannot -- it's kind of difficult to quantify the impact. But as a whole, I think it does create a good business potential for us, both in terms of the so-called advanced packaging and test, but also for the peripheral chips that requires traditional packaging test. They all fall into our strength, and we believe that creates a good opportunity for us going forward.

我認為 AI 芯片對我們來說絕對是一個很好的潛力，儘管這還處於非常早期的階段。所以我們不能——量化影響有點困難。但總的來說，我認為它確實為我們創造了一個很好的商業潛力，無論是在所謂的先進封裝和測試方面，還是對於需要傳統封裝測試的外圍芯片。他們都屬於我們的力量，我們相信這為我們前進創造了一個很好的機會。

In terms of the ultra advanced type of packaging, I think, for any type of new product technology, I think, because of the characteristics of it, because some -- most of these new packaging is more of a wafer process. So, we believe in the earlier stage, it should be the foundries that are taking the lead in developing this technology. Whereas when we come in, we need to wait until these applications becomes -- has a wider adoption. And with the volume becomes a real volume production type of business, then there will be a natural division of works between us and the foundries. So, I think it's a good opportunity, and we do have a natural migration of technology from foundry to OSAT players, including us. And in this environment, I think, being the largest and the most technologically advanced OSAT player in the field, I think we will gain the most potential from this business.

就超先進類型的封裝而言，我認為，對於任何類型的新產品技術，我認為，由於它的特點，因為一些 - 大多數這些新封裝更多的是晶圓工藝。所以，我們認為在早期階段，應該是晶圓代工廠在帶頭開發這項技術。而當我們進來時，我們需要等到這些應用程序變得 - 得到更廣泛的採用。隨著批量成為真正的批量生產業務，我們與代工廠之間將自然分工。所以，我認為這是一個很好的機會，我們確實有技術從代工到 OSAT 玩家的自然遷移，包括我們。在這種環境下，我認為，作為該領域最大、技術最先進的 OSAT 廠商，我認為我們將從這項業務中獲得最大的潛力。

Our next question is from Sunny Lin of UBS.

我們的下一個問題來自瑞銀集團的 Sunny Lin。

Could you hear me?

你能聽見我？

Yes.

是的。

So, my first question is on second half. Just want to better understand the trajectory of your recovery. So, I think, Joseph, earlier you mentioned for your IC ATM utilization rate, they get back to 80% or higher in late this year. And so I understand it's still a bit early, but based on your current communication with the customers, would you expect a similar recovery pace for Q3 and Q4? Or do you think potentially it will be very back-end loaded, meaning Q4, the recovery will be a lot more significant?

所以，我的第一個問題是關於下半年。只是想更好地了解您的康復軌跡。所以，我認為，約瑟夫，你早些時候提到你的 IC ATM 利用率，他們在今年年底恢復到 80% 或更高。所以我知道現在還為時過早，但根據您目前與客戶的溝通，您是否預計第三季度和第四季度會有類似的複蘇步伐？或者你認為它可能會非常後端加載，這意味著第四季度，恢復會更重要嗎？

I think the -- it should be third quarter being the highest sequential growth rate. And then going to fourth quarter, we're still expecting growth on a quarterly basis, but to a lesser magnitude. But all in all, I think I already mentioned that from a whole year perspective. I think the softness -- because of this softer-than-expected second quarter, I think for the whole year, we're now taking a more conservative view from originally expecting a flat to high single-digit decline ATM revenue to high single-digit to mid-teens kind of a decline for the whole year. Low teens.

我認為——第三季度應該是最高的連續增長率。然後進入第四季度，我們仍然預計季度增長，但幅度較小。但總而言之，我想我已經從全年的角度提到了這一點。我認為疲軟 - 由於第二季度低於預期，我認為對於全年，我們現在採取更保守的觀點，從最初預計 ATM 收入持平到高個位數下降到高個位數 -數字到十幾歲的人全年都有所下降。低青少年。

Got it. That's very helpful. So just to follow up. For second half, any particular areas that you're seeing better strength?

知道了。這很有幫助。所以只是跟進。對於下半年，您看到任何特定領域有更好的實力？

I'm sorry?

對不起？

So for second half recovery, any particular applications that you're seeing better strength?

那麼對於下半年的恢復，您看到任何特定的應用程序更有力量？

I think it should be a broad-based recovery. I think a lot of the new products in all segments should be brought out. And I think the customer will resume to a restocking type of mode to meet these new product launches.

我認為這應該是一個基礎廣泛的複蘇。我認為應該推出所有領域的很多新產品。而且我認為客戶將恢復到補貨類型的模式來滿足這些新產品的發布。

Next question is from Szeho Ng of China Renaissance.

下一個問題來自華興資本的Szeho Ng。

Joseph, two questions from my side. The first one, within the ATM business, what are the major applications that are driving the automotive momentum?

約瑟夫，我有兩個問題。第一個，在 ATM 業務中，推動汽車發展勢頭的主要應用是什麼？

Driving the automotive?

駕駛汽車？

Yes. Business within the ATM portfolio.

是的。 ATM 組合中的業務。

The IDMs, MCUs, sensors, infotainment processors, telematics, there's a pretty wide application. And for EMS, I think it's a large chunk of it -- a better chunk of it is for power module and power management type of products and also telematics and infotainment.

IDM、MCU、傳感器、信息娛樂處理器、遠程信息處理，應用非常廣泛。對於 EMS，我認為它佔了很大一部分——其中更好的一部分用於電源模塊和電源管理類型的產品，以及遠程信息處理和信息娛樂。

I see. So basically, it's on the wire bond applications, right, for those products?

我懂了。所以基本上，它是在引線鍵合應用上，對吧，對於那些產品？

Yes. What?

是的。什麼？

Mostly on wirebond, right, for those products?

主要是在引線鍵合上，對吧，對於那些產品？

Right, right, at this point. And so it is migrating into flip chip as well.

對對對，就在這個時候。因此它也正在遷移到倒裝芯片。

I see. All right. Yes. Second question on the financial side, on the gearing ratio. Right now, the company has been driving down the gearing ratio to a quite healthy level. So is this something that we are comfortable? Or do we want to bring it down further?

我懂了。好的。是的。關於財務方面的第二個問題，關於資產負債率。目前，該公司一直在將資產負債率降至相當健康的水平。那麼這是我們感到舒服的事情嗎？還是我們想進一步降低它？

We are comfortable with the current level, although the -- because of the rate hikes, I think the interest burden on us is increasing quite a bit. So if -- given the circumstances, I think we will try our best to continue to bring down our interest-bearing debt level so that we could have some savings on interest.

我們對目前的水平感到滿意，儘管 - 由於加息，我認為我們的利息負擔正在增加很多。因此，如果 - 在這種情況下，我認為我們將盡最大努力繼續降低我們的有息債務水平，以便我們可以節省一些利息。

Our next question is from Bruce Lu of Goldman Sachs.

我們的下一個問題來自高盛的 Bruce Lu。

Can you hear me?

你能聽到我嗎？

Yes.

是的。

Okay. So, I want to follow-up a lot of questions, but I want to focus on the ARM-based CPU where you have higher market share. Do we see some kind of dollar content increase for you to do this kind of business, whether you get like better packaging ASP, a longer testing time or even have -- with level testing opportunities?

好的。所以，我想跟進很多問題，但我想關注你們擁有更高市場份額的基於 ARM 的 CPU。我們是否看到您從事此類業務的某種美元內容有所增加，您是否會喜歡更好的包裝 ASP、更長的測試時間，或者甚至有水平測試機會？

Like I said, it's in the early stage. We don't really have a number in our mind, except it's more complicated and it's more technologically advanced. So, I think the overall value should be -- or value content should be higher than the other chips involved. And also, I think, not just on these most advanced chips also to -- there will be also peripheral chips coming out using mature packaging. And that is also another good potential for us.

就像我說的，它處於早期階段。我們心中並沒有真正的數字，只是它更複雜，技術更先進。所以，我認為整體價值應該——或者說價值含量應該高於所涉及的其他籌碼。而且，我認為，不僅是在這些最先進的芯片上——還會有使用成熟封裝的外圍芯片。這對我們來說也是另一個很好的潛力。

Right. Do you see emerging SLT business? Is that an ROE or accretive business for ASE?

正確的。您看到新興的 SLT 業務了嗎？這是 ASE 的 ROE 或增值業務嗎？

SLT?

SLT？

System level testing.

系統級測試。

I need to get back to you on this. I'm not that familiar with it.

我需要就此回复你。我對它不是很熟悉。

Okay. Then I want to switch gear to another question for the -- do you consider to do some kind of like capacity expansion in United States, given there it's like tear-and-stack approach from the government?

好的。然後我想換一個問題——你是否考慮在美國進行某種類似的產能擴張，因為這就像政府的撕裂和堆疊方法？

Well, we're not ruling out anything. I think we're evaluating different options, trying to find a suitable option for us, not just in the US, but also in the other part of the world. As you know, we do have worldwide footprints and we are expanding in Singapore and Malaysia and in Korea as well in terms of ATM. And we are expanding from EMS perspective, expanding in Vietnam, Poland, some other areas. So, we'll continue to monitor the situation and trying to find a suitable option for us to meet our customer's request and also to move to meet the overall kind of environment, geopolitical environment type of requirements.

好吧，我們不排除任何可能性。我認為我們正在評估不同的選擇，試圖找到適合我們的選擇，不僅在美國，而且在世界其他地方。如您所知，我們確實擁有全球足跡，我們正在新加坡、馬來西亞和韓國以及 ATM 方面進行擴張。我們正在從 EMS 的角度擴展，在越南、波蘭和其他一些地區擴展。因此，我們將繼續監測情況，並努力為我們找到合適的選擇，以滿足客戶的要求，同時滿足整體環境、地緣政治環境類型的要求。

(Operator Instructions) Our next question is from Charlie Chan, Morgan Stanley.

（操作員說明）我們的下一個問題來自摩根士丹利的查理陳。

So first of all, just some follow-ups to the previous questions. In terms of the advanced packaging, would the company consider to do some kind of wafer purchase for [Trimble] in the [poster]? Can I ask a follow-up question?

所以首先，只是對前面問題的一些跟進。在先進封裝方面，公司是否會考慮為[海報]中的[Trimble]進行某種晶圓採購？我可以問一個後續問題嗎？

Yes. I think there will be some kind of alliances with the wafer producers, and we already have the wafer process here.

是的。我認為將與晶圓生產商建立某種聯盟，我們這裡已經有了晶圓工藝。

Okay. But this is still in early stage, as you just mentioned?

好的。但這還處於早期階段，正如你剛才提到的？

Yes.

是的。

Got it. And the next follow-up is to Sunny's question about utilization back to 80%. I think -- do you mean that by the end of this year, it will be 80% or at the beginning of second half, you can see? Yes, because just based on the utilization calculation, right, from 60% to 80%, it is like a 30% sequential growth. Can you clarify?

知道了。下一個跟進是 Sunny 關於利用率回到 80% 的問題。我想——你的意思是到今年年底，它會達到 80% 還是在下半年年初，你能看到嗎？是的，因為僅根據利用率計算，從 60% 到 80%，就像 30% 的連續增長。你能澄清一下嗎？

Yes. I think what we're seeing is, at some point, we will reach 80%. I think that's based on the forecast that we're looking at. But it's too early to say when exactly that will happen and how long it will last. So, I think we still need to monitor the situation a bit more.

是的。我認為我們看到的是，在某個時候，我們將達到 80%。我認為這是基於我們正在查看的預測。但現在說什麼時候會發生以及會持續多久還為時過早。所以，我認為我們仍然需要更多地監測情況。

Okay. Yes. And lastly, kind of pricing and also your structural margin improvement. So this question could be a little bit more complex. So in terms of pricing, I understand that lower prices don't really drive the end demand, but your key customers are quite suffering, right, meaning they are cutting price with their competitors, their margin squeezed. And also our understanding is that some of your Chinese competitors, they are indeed cutting price for some mature wirebond business, right? So how do you address all those kind of pressures from your major customers and also your competitors?

好的。是的。最後，定價以及結構性利潤率的改善。所以這個問題可能有點複雜。所以在定價方面，我知道較低的價格並不能真正推動最終需求，但你的主要客戶卻很痛苦，對吧，這意味著他們正在與競爭對手一起降價，他們的利潤受到擠壓。而且我們的理解是，你們的一些中國競爭對手，他們確實在為一些成熟的引線鍵合業務降價，對吧？那麼，您如何應對來自主要客戶和競爭對手的所有這些壓力呢？

I'm trying to look at the -- to find the right word, [p for p, bifur]. I think because of the supply chain....

我正在嘗試查看 - 以找到正確的詞，[p 代表 p，bifur]。我認為是因為供應鏈......

Bifurcation.

分叉。

....bifurcation, I think the price competition from the Chinese OSATs has lessened. So, we're actually not feeling that much of a pressure from the Chinese competitor at this point. But in terms of our customer, I think the value add in terms of the back-end services is much smaller than the front end. So, I think most of the pricing pressure should be more on the fab level [rather] than us. And given our scale and technology leadership and also the high degree of customer reliance on us, I think the -- we're still -- comparing to our competitors, we have a better pricing leverage. So, we're saying the pricing seems to be still resilient. In that case, we still need to find the suitable pricing strategy to serve our customers' needs and also to maintain the strategic relationship we have with our customers.

....bifurcation，我認為來自中國 OSAT 的價格競爭已經減弱。因此，目前我們實際上並沒有感受到來自中國競爭對手的太大壓力。但就我們的客戶而言，我認為後端服務的附加值遠小於前端。所以，我認為大部分定價壓力應該更多地來自晶圓廠層面 [而不是] 我們。鑑於我們的規模和技術領先地位以及客戶對我們的高度依賴，我認為 - 我們仍然 - 與我們的競爭對手相比，我們有更好的定價槓桿。所以，我們說定價似乎仍然具有彈性。在這種情況下，我們仍然需要找到合適的定價策略來滿足客戶的需求，並維持我們與客戶的戰略關係。

Sure. Yes. And last one. Attached to your comments about your pricing strategy, I'm wondering when you talk about or Ken talk about higher trough margin versus previous cycle, do you refer to the ATM business only or ATM and EMS? And also, do you think if there is industry-wide, the trough margin will be higher? Or is it just more about ASE?

當然。是的。最後一個。附上你對定價策略的評論，我想知道當你談論或 Ken 談論與上一個週期相比更高的谷底利潤時，你指的是 ATM 業務還是 ATM 和 EMS？還有，你認為如果有全行業，波谷利潤率會更高嗎？或者它只是更多關於 ASE？

Competitors, I think from ATM's perspective, we are in a much stronger position than our customers -- than our competitors. And because of the -- because of our scale, because of the higher degree of customer reliance on us, I think the -- also the synergistic cost savings that we have after the SPIL combination, I think it does raise our overall margin prospect for us. That's why we're saying that our structural margin range has improved from historically around 20% to 25%. Now, we're moving that range from to mid-20s to 30%. And even with this trial cycle, we're still -- we still -- I think we still -- we're still maintaining that margin range for the whole year, although there's more uncertainties and the overall environment is not -- the overall environment is more challenging. As I mentioned, we are facing higher utility costs. We're facing higher financial costs and so on and so forth. And so the challenge is higher, but given the position, we still believe that we do have the buffer to try to maintain that structurally improve the margin.

競爭對手，我認為從 ATM 的角度來看，我們比我們的客戶——比我們的競爭對手更有優勢。而且由於 - 由於我們的規模，由於客戶對我們的依賴程度更高，我認為 - 還有我們在 SPIL 合併後所節省的協同成本，我認為這確實提高了我們的整體利潤率前景我們。這就是為什麼我們說我們的結構性利潤率範圍已從歷史上的 20% 左右提高到 25%。現在，我們將該範圍從 20% 左右移動到 30%。即使有這個試用周期，我們仍然 - 我們仍然 - 我認為我們仍然 - 我們仍然保持全年的利潤率範圍，儘管存在更多的不確定性並且整體環境不是 - 整體環境更具挑戰性。正如我提到的，我們面臨著更高的公用事業成本。我們面臨著更高的財務成本等等。因此挑戰更大，但鑑於目前的情況，我們仍然相信我們確實有緩衝來努力維持結構性提高利潤率。

(Operator Instructions) It seems like there is no more question.

（操作員說明）似乎沒有更多問題了。

Okay. So thank you very much for attending this conference call. And I think the whole year, it remains to be challenging. But we believe we will continue to be the leader of the industry and we will be the last to fall and first to rise. And we remain confident weathering through this out, this down cycle lastly. And we'll continue to make the necessary investments to meet the future demand going forward.

好的。非常感謝您參加本次電話會議。我認為全年都充滿挑戰。但我們相信，我們會繼續做行業的領頭羊，最後跌倒，最先上漲。我們仍然有信心渡過這次下行週期。我們將繼續進行必要的投資以滿足未來的需求。

Thank you very much.

非常感謝。