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