ASE Industrial "Higher capex to power larger advanced packaging opportunity"

Research evidence excerpt

ASE Industrial "Higher capex to power larger advanced packaging opportunity"

’s TPU v8t, both of which are set to ramp meaningfully next year. We forecast

12/27E 25.67 28.53 11 24.32

ASE's LEAP platform sales to rise from US$3.6bn in 2026 to US$6.7bn in 2027 vs. our

12/28E 33.21 36.64 10 31.80

prior estimate of US$5.8bn (see Figure 1ASE'sleading-edgeadvancedpackagingbusines, for our detailed LEAP sales forecasts). We raise

our IC ATM GM to 27.9%/32.8%/33.7% in 2026/27/28E. Sunny Lin

Analyst

Healthy outlook for mainstream packaging & testing sunny.lin@ubs.com

+886-2-8722 7346

The traditional back-end outlook appears better than expected in coming quarters. We

expect mature foundry utilisation to further improve in H226-2027E with stable Ryan Sun

consumer restocking, growing demand for servers, and an improving auto and industrial Associate Analyst

ryan-za.sun@ubs.com

cycle. This should support ASE's mainstream semis sales growth to the guided 13-14%

+886-2-8722 7267

in 2026 and sustain growth in 2027E.

Christine Chen

Associate Analyst

Valuation: raise price target to NT$835.00 from NT$660.00; reiterate Buy christine.chen@ubs.com

+886-2-8722 7352

We fine tune 2026E EPS and raise 2027/28E EPS by 11%/10% to factor in our more

optimistic LEAP outlook. Our new PT is based on 25x 2027-28E PE vs. 25x 2027E PE

previously, justified by 26% long-term earnings CAGR forecast. Key catalyst could be its

upcoming earnings conference in late July, as we anticipate another solid set of earnings

and guidance, and a potential capex upgrade.

Highlights (NT$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 581,914 595,410 645,388 782,430 964,726 1,156,462 1,344,635 1,563,003

EBIT (UBS) 40,328 39,166 50,756 96,304 163,669 213,394 262,147 325,363