Episode
ASE Technology (ASX): Its Best Quarter Ever — And It Just Burned $1 Billion in Cash
- Published
- Jul 30, 2026
- Duration seconds
- 823
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Summary
ASE Technology Holding Co., Ltd. (ASX) Q2 2026 — Revenue was NT$191,064M (about US$6.05B), +26.7% YoY and +10.0% QoQ — an all-time record. Gross margin rose to 21.0% from 20.0% and operating income of NT$21,134M was +107% YoY; net income was NT$21,068M vs NT$7,521M. Basic EPS NT$4.80 = US$0.304 per ADS vs consensus near US$0.23. CONVENTION: ASE reports in New Taiwan dollars, 1 ADS = 2 common shares, NT$31.59 = US$1. ATM (assembly and test) did NT$126,148M, +36.3%, at a 27.3% gross margin and 15.7% operating margin — both UP; EMS did NT$65,789M, +11.9%, at 8.9% gross and 2.4% operating — both DOWN. ATM is 66% of revenue and 93.6% of operating income. Testing revenue grew 42.5%, faster than packaging's 34.9%, and computing rose to 30% of ATM revenue from 24%. But free cash flow was MINUS NT$32,835M (about −US$1.04B) on NT$79,849M of cash capex against NT$47,014M of operating cash flow, funded with NT$39,864M of new borrowings as net debt/equity went 0.40 to 0.47. Two things trip everyone up: this is ASE Technology Holding (NYSE: ASX, Taipei 3711), NOT the Australian stock exchange; and one ADS equals TWO common shares at NT$31.59/US$1, so NT$4.80 of EPS is 30.4 US cents per ADS, not 15. ASE is two companies in one ticker — ATM, the real semiconductor business, expanded gross margin to 27.3% while EMS fell to an 8.9% gross and 2.4% operating margin, so the blended 21.0% hides the good business. The AI leverage is measurable: computing went 24% to 30% of ATM revenue and testing grew 42.5%. The most under-covered number is the machine count — testers went 6,797 to 8,348 (+23%) while wirebonders SHRANK from 25,156 to 24,815, and US$804M of US$1,695M equipment capex went into testing. ASE is converting itself into a test house. But the headline capex understates the cash: act…