Don't be afraid of the “AI bubble” haze! Packaging giant ASMPT (00522) makes a tough statement: long-term demand for AI devices is as stable as before

The Zhitong Finance App learned that Huang Zida, CEO of ASMPT (00522), a leading global semiconductor packaging equipment company, said that long-term demand for devices driven by artificial intelligence (AI) is still very stable, thus refuting investors' growing concerns about the AI bubble.

In an interview on Wednesday, Huang Zida said that as new AI systems use more chips, the chip architecture will continue to evolve and change. He pointed out that this will require more back-end packaging processes, which are a critical component of ASMPT's business.

He said, “We want the entire industry to continue to grow, not only in terms of money, but also in the number of chips that need to be packaged,” and “this is why we are generally optimistic despite fluctuations in the stock market.”

Furthermore, Huang Zida, who is about to retire next month, expressed no concern about the risk of local Chinese competitors advancing the localization process through aggressive price cuts, thereby encroaching on their market share. He pointed out that the company will continue to “double its investment” in R&D and target customers who are willing to pay for advanced packaging technology rather than simply seeking discounts.

Prior to his statement, the company's Hong Kong-listed stock plummeted 9.7% due to the second-quarter earnings report raising investors' concerns about excessive investment in AI production capacity. Although the net profit of ASMPT (which mainly provides chip assembly and packaging) increased 155% in the second quarter, it still falls short of market expectations for a higher growth rate. However, its quarterly revenue exceeded analysts' expectations, and growth expectations for the current quarter were faster than analysts' forecasts.

Demand for AI devices is driving up bookings

The team led by Citibank analyst Kevin Chen wrote in a report: “We see that demand for advanced packaging remains strong in the future, while the mainstream semiconductor business remains steady.”

Huang Zida said that although the number of orders surged 98% year over year, these orders have not been fully converted into bill revenue due to long delivery cycles that limit delivery of certain materials.

According to Huang Zida, ASMPT is actively expanding its supply chain network in order to shorten delivery cycles and complete orders more quickly — thereby speeding up the recognition of bill revenue.