Key Highlights

  • Consolidated revenue reached a record TWD 244.2 billion, up 28% sequentially and 45% from the year earlier quarter.
  • Diluted EPS was TWD 5.84, while dollar based data showed EPS of 0.37 against a consensus estimate of 0.32.
  • Gross margin reached 22.1%, up 5 percentage points year over year, and operating margin widened to 13.6%.
  • Management raised 2026 LEAP revenue to over USD 4 billion from USD 3.7 billion mentioned the prior quarter.

ASE Technology Holdings (NYSE:ASX) reported record third quarter 2026 consolidated net revenue of TWD 244.2 billion, up 28% from the second quarter and 45% from a year earlier. In the dollar based data used for estimate comparison, revenue was USD 7.53 billion against a consensus estimate of USD 7.22 billion, and earnings per share were 0.37 against a consensus estimate of 0.32. The company itself reports under Taiwan IFRS in New Taiwan dollars, with fully diluted EPS of TWD 5.84 and basic EPS of TWD 6.13.

Net income was TWD 27 billion, up 28% sequentially and 148% year over year. Year to date, fully diluted EPS stands at TWD 13.40. Management said revenue grew faster than initially planned because high demand LEAP capacity was installed more quickly, and that its assembly and test capacities ran at or near full utilization.

Packaging Mix Lifts Margins While EMS Absorbs Costs

Gross profit was TWD 54 billion, a margin of 22.1%, up 1.1 percentage points sequentially and 5 percentage points from last year. Operating profit rose 151% year over year to TWD 33.1 billion at a 13.6% margin, and operating expenses of TWD 20.8 billion fell to 8.5% of revenue. The effective tax rate was 14.8%.

The ATM business posted record revenue of TWD 151.5 billion, up 20% sequentially and 51% annually, with a gross margin of 30.6% and an operating margin of 20.0%. ATM made up 62% of revenue and 91% of operating profit. Computing application revenue grew 39%, while communications grew 8%. EMS revenue rose 42% sequentially and 35% annually to TWD 93.5 billion, but its gross margin slipped 0.6 percentage points to 8.3% as higher pass-through component costs weighed, and its operating margin was 3.3%.

Fourth Quarter Guidance and Capacity Build

The chief financial officer said management projects fourth quarter consolidated revenue growth of 6% to 8% sequentially, a gross margin of 23% to 24% and an operating margin of 14.5% to 15.5%, using an exchange rate of USD 1 to TWD 31.9. ATM revenue is projected to grow 11% to 13% with gross margin up 100 to 200 basis points, while EMS revenue is projected flattish at an operating margin near 2%. The effective tax rate for 2026 is projected at 16% to 17%.

Machine and equipment capital expenditures were USD 2.1 billion in the quarter, with another USD 1.8 billion on facilities and land, and year to date spending reached USD 8 billion. Cash and current financial assets were TWD 107.9 billion, interest-bearing debt rose TWD 100.2 billion to TWD 406.5 billion, and the net debt to equity ratio was 66%, which management called the near term peak. There are 22 building projects underway in Taiwan.

Signposts for the Fourth Quarter and 2027

The fourth quarter guidance supplies several measurable checkpoints: consolidated revenue growth of 6% to 8%, gross margin of 23% to 24%, and ATM margin gains of 100 to 200 basis points. The net debt to equity ratio, at 66% in the third quarter, is another reference, since management described the third quarter as its near term peak.

LEAP revenue is a further item, with 2026 raised to over USD 4 billion and a plan to double it in 2027. Full process revenue of USD 300 million in 2026 and over USD 1 billion projected for 2027 completes the set.