Revenue, Bookings and Profitability for First Nine Months of 2020 / Show Year-on-Year Improvement

ASM Pacific Technology Limited (“ASMPT”, “the Group”) (Stock Code: 0522) announced its results for the third quarter and the nine months ended 30 September 2020. ASMPT is a leading global supplier of hardware and software solutions in the manufacturing of semiconductors and electronics. ASMPT’s technologies enable its diverse range of customers to create a wide range of semiconductor and electronic products and services for the digitally-enabled world.

Despite the challenging global economic conditions, ASMPT achieved growth in revenue and profit for the first nine months of 2020 (9M 2020) versus the same period in 2019 (9M 2019), with bookings growth an especially encouraging sign.

9M 2020 Group Review

Revenue for 9M 2020 was HK$11.97 billion (US$1.54 billion), an increase of 4.7% versus HK$11.43 billion (US$1.46 billion) for 9M 2019. The Group’s consolidated profit after taxation for 9M 2020 of HK$624.7 million also represented a 56.0% increase over 9M 2019.

ASMPT benefited from several areas of opportunity, from the radical shift to Work-From-Home arrangements this year that drove demand for personal computing and connectivity devices, to accelerating 5G infrastructure deployment and device upgrades driving strong capacity and technology demand for the company’s solutions - from die and wire bonders, through to Advanced Packaging (AP) and System-in-Package products.

The increase in adoption of ASMPT’s wide range of AP solutions was especially strong for high-performance computing (HPC) devices for data centres and 5G-related applications. This resulted in 9M 2020 revenue for AP tools already equalling AP revenue for the whole of 2019. Moreover, ongoing global trade tensions saw domestic China-based companies engaged in more localized production. Consequently, ASMPT’s China business registered a 9M 2020 revenue increase, compared with 9M 2019.

Q3 2020 Group Review

ASMPT’s Q3 2020 revenue was HK$4.27 billion (US$550.7 million), with consolidated profit after taxation at HK$233.9 million, 5.2% higher than Q3 2019 but 36.0% lower than Q2 2020.

Bookings growth was encouraging. Notably, Q3 bookings (HK$4.52 billion (US$583.1 million)) represented increases of 12.4% (YoY) and 23.5% (QoQ) respectively, bucking the historical trend of Q3 bookings coming in lower than Q2’s. Q3 bookings were the second highest this quarter as compared with previous Q3 bookings (the record was Q3 2018).

While ASMPT’s Q3 2020 gross margin of 32.9% declined 182 bps YoY, this was due mainly to weaker gross margin from its Semiconductor Solutions and SMT Solutions Segments, but mitigated by stronger gross margin from its Materials Segment.

Mr. Robin Ng, Chief Executive Officer of ASMPT said, “ASMPT’s business continues to demonstrate resilience and momentum. We achieved revenue at the higher end of our guidance for Q3, with a strong bookings growth momentum throughout 2020 indicating healthy demand for our products and services, and possibly an improving business sentiment overall.

While gross margins were still slightly impacted, ASMPT has continued to focus on cost reduction efforts to streamline operations and improve overall profitability.”

Segment Highlights

The Semiconductor Solutions Segment experienced broad-based demand this quarter, including die and wire bonders, possibly indicating that customers are increasing their capacities amidst improving market conditions. The IC/Discrete Business Unit benefited from increased Work-From-Home arrangements driving strong demand for related computing solutions, while the ongoing 5G Infrastructure rollout globally, especially in China, was another driver. Its Optoelectronics Business Unit saw sustained demand f...

Extracted from: 

• Status of the Memory Industry 2020 report, Yole Développement, 2020

• YMTC 3D NAND Flash Memory report, System Plus Consulting, 2020 

• NAND Quarterly Market Monitor, Yole Développement, 2020 

• DRAM Quarterly Market Monitor, Yole Développement, 2020 

• 3D NAND Memory Comparison 2019 report, System Plus Consulting, 20

* In the long term, NAND and DRAM market revenues are expected to grow up to US$82 billion and US$95 billion respectively, by 2025. Yole Développement (Yole) announces a 11% CAGR for the NAND market and 7% for the DRAM one, between 2019 and 2025.

* Market status per technology:

NAND and DRAM account together for the main part of the overall stand-alone memory market, with 96% market shares in 2019.

Other memory technologies represent only about 4% of memory business.

3D XPoint is poised to grow in datacenter applications.

* China is entering the NAND business with aggressive plans, whereas China DRAM developments continue to advance.

* COVID-19 outbreak:

The DRAM revenues will be growing modestly, about 5% in 2020.

From the NAND side, market figures are much better with about 35% of revenue growth.

2020 DRAM ASP is directly impacted, announce Yole in its memory report and Q2 2020 memory monitor, around -9% from 2019, although growing on a quarterly basis starting from Q1 2020.

NAND ASP started growing earlier in Q4 2019. On a yearly basis, the NAND ASP will grow 6% in 2020.

* TO DOWNLOAD THE PRESS RELEASE: ENGLISH 

“Despite the COVID-19 outbreak, which negatively impacted the smartphone and automotive industries, but spurred demand for server and PC memory for stay-at-home activities, 2020 is expected to be a year of recovery,” asserts Simone Bertolazzi, PhD, Technology & Market analyst, Semiconductor, Memory & Computing, at Yole Développement (Yole). “At Yole, we see the beginning of a new era of prosperity for the memory industry.”

Driven by important megatrends such as mobility, cloud computing, AI and the IoT , the stand-alone memory market has experienced extraordinary growth over the past decade.

However, this exciting growth period ended in Q4-2018 when both the NAND and DRAM markets started experiencing oversupply caused by weak demand. This included lower-than-expected smartphone sales and a slowdown in datacenter demand. Inventory levels increased for memory suppliers and their OEM customers, with ASP ($/Gb) declining by more than 49% in 2019. Meanwhile, combined DRAM and NAND revenue reached ~$106B, down 34% from 2018. In 2019, significant DRAM and NAND capex cuts initiated a market recovery that began in late-2019, and which has continued in 2020.

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