ASX

Every chip that leaves a foundry — whether TSMC, Samsung, or Intel — arrives as a fragile disc of silicon that cannot connect to anything. Before it becomes a processor in a server, a phone, or a car, it has to be packaged: placed on a substrate, wired to the outside world through thousands of microscopic connections, tested, and shipped. This is what ASE does, and they do more of it than anyone else on Earth.

ASE Technology Holding operates 37 manufacturing facilities across Taiwan, China, the Philippines, Malaysia, Singapore, Thailand, South Korea, Japan, Germany, and the United States. The company runs two reporting segments: ATM (assembly, test, and material) which accounted for roughly 60% of 2025 revenue and grew 19% YoY, and EMS (electronics manufacturing services) which declined 5% and provides lower-margin contract manufacturing. ATM is the thesis-relevant business.

Within ATM, ASE has been aggressively building its LEAP (Leading Edge Advanced Packaging) capabilities — fan-out wafer-level packaging, 2.5D interposer, system-in-package, and advanced test. LEAP revenue surged from $0.6B in 2024 to $1.6B in 2025, representing 13% of ATM revenue. Management has guided LEAP to double again to $3.2B in 2026 (75% packaging, 25% test), with two-thirds of incremental machinery capex directed at LEAP.

Full year 2025 consolidated revenue was approximately $20.8B (NT$645B). ATM gross margin was 23.5%, ATM operating margin 11.3%. The overall consolidated gross margin of 17.7% is diluted by the lower-margin EMS segment. No single customer exceeds 15% of revenue — a meaningful diversification advantage over Amkor, whose customer concentration is higher.