Shares jumped 7.4% to $42.89 after ASE Technology, the world's largest outsourced chip assembly and testing company, posted blowout unaudited revenue figures for June and the second quarter. The numbers confirm that insatiable demand for AI-related chip packaging is accelerating — but the stock's sky-high valuation leaves little room for a stumble.
The Chip Assembly Business Is Growing Twice as Fast as the Overall Company
June net revenues hit NT$65,783 million (US$2,092 million), up 32.9% year-over-year.
Q2 consolidated revenues reached NT$191,064 million (US$6,050 million), up 26.7% from a year ago, while the ATM segment — the division that packages and tests chips — surged 36.3% year-over-year to NT$126,148 million. That gap matters: ATM is the higher-profit engine. The segment now contributes about 65% of consolidated revenue and more than 90% of operating profit. Every quarter ATM outpaces the whole, ASE's profit mix improves.
AI Spending Is Reshaping the Revenue Curve
AI-related products are muting traditional seasonality and driving higher utilization rates.
Management raised its 2026 outlook for advanced packaging services and now expects revenue from those services to exceed $3.5 billion. That upgraded forecast, combined with US$1.0 billion in equipment spending in Q1 alone , signals ASE is betting heavily that AI chip complexity will keep its factories full through 2027.
Growth Is Real, but the Price Tag Is Steep
ASE trades at a price-to-earnings ratio — the stock price divided by per-share profit — of 59.24x, far above historical averages.
The stock has surged roughly 294% over the past year , pricing in extraordinary growth. Meanwhile, insiders have sold $363.4 million in shares over the past three months , a signal worth watching even if it partly reflects routine diversification.
The Bottom Line for Shareholders
Q1 gross margin expanded to 20.1%, up 3.3 percentage points year-over-year , and net income surged 87% year-over-year. The revenue acceleration into Q2 suggests margins should improve further. But at nearly 60 times earnings, the stock already reflects a best-case scenario. Any sign of slowing AI infrastructure spending — or margin pressure from rising depreciation costs tied to massive capital investments — could trigger a sharp correction.