Packaging, Test Firms Post Mixed Results In Q1 '25
K&S reported mixed results; Amkor, ASE, JCET and Teradyne post mixed results
By Mark LaPedus
IC packaging is an important part of the semiconductor industry.
In the semiconductor process flow, a company designs a chip line using specialized software. Then, a chipmaker manufactures the chip line based on that design in a facility called a fab.
Finally, the chip is tested and then assembled in a package. A package is a product that houses a chip and protects it from harsh operating conditions. A package is also used to boost the overall performance of a given chip line.
Nonetheless, it’s important to keep tabs on the leading outsourced semiconductor assembly and test (OSAT) vendors, which specialize in providing third-party packaging and testing services for customers. Here’s the latest financial results from leading OSATs, tool vendors and equipment makers:
K&S
On May 7, Kulicke and Soffa (K&S) reported its financial results for the second fiscal quarter ended March 29. The supplier of equipment for packaging reported second quarter net revenue of $162.0 million, down 2.5% from the previous quarter and down 5.9% from the like period a year ago.
It also reported a net loss of $84.5 million for the quarter. The company reported a net income of $81.6 million in the previous quarter. It posted a net loss of $102.7 million in the like period a year ago.
In March, the company disclosed that its board had approved a plan related to the intended cessation of its Electronics Assembly equipment business. This resulted in a pre-tax charge of $86.6 million during the quarter.
Fusen Chen, K&S’s president and chief executive, said: "We recently experienced more cautious order activity unique to certain Southeast Asia markets. Despite this near-term regional dynamic, we continue to support our global customer base, see positive core-market utilization data and remain well prepared to accelerate growth through Vertical Wire, Power-Semiconductor, Advanced Dispense and Thermo-Compression technology transitions."
K&S currently expects net revenue in the third quarter of fiscal 2025 ending June 28 to be approximately $145 million +/- $10 million.
“(K&S’s) March '25 quarter top line results were fine but a weak June '25 quarter guidance adds additional uncertainty towards the timing/shape of a cyclical recovery in KLIC's core semi business,” said Krish Sankar, an analyst at TD Cowen, in a research note.
There were several positives for K&S during the quarter. “Fluxless thermo-compression (FTC) traction is progressing well in foundry/logic. Management expects overall thermo-compression bonder (TCB) revenues to be around $70M in FY25 (vs ~$50M in FY24) and growing to >$100M in FY26 as KLIC's solution is adopted at leading-edge foundry/logic customers and early expansion into HBM,” Sankar said.
On the downside, there were several negatives for K&S. “Weak June quarter guidance implies continued limited visibility in the backend space,” Sankar said. “TCB for HBM seems like a crowded market with existing suppliers such as Hanmi, Hanhwa Semitech, Shinkawa, SEMES, BE Semi, Toray and ASMPT.”
ASE
On April 30, Taiwan’s ASE, the world’s largest OSAT, reported sales of NT$148,153 million (US$4.62 billion) for the first quarter of 2025, down 9% from the previous quarter but up 12% from the like period a year ago.
Net income attributable to shareholders of the parent for the quarter totaled NT$7,554 million ($230.4 million), down 19% from the previous quarter but up 33% from the like period a year ago.
ASE’s assembly, testing, and material (ATM) sales were up by 17.3% year-over-year and down by 1.9% sequentially. In the quarter, leading-edge advanced packaging services accounted for 10% of ASE’s overall ATM revenues, as compared to 6% for the full year 2024.
ASE’s overall utilization rate came in slightly above its original expectations of 65% for the first quarter. Test utilization was full for advanced platforms while being in the 60s-percent range for trailing-edge capacities.
For the second quarter of 2025, ASE’s ATM business is expected to grow by 9% to 11% quarter-over-quarter.
During a conference call, ASE addressed several topics, including:
Will ASE invest in a packaging plant in the U.S.?
“Currently, we are engaging in discussions and are evaluating the opportunity with interest. There are no further details so far in terms of the actual investment size or the timing of it, but any decision that we will eventually make will be made with economic viability,” said Joseph Tung, chief financial officer of ASE Technology Holding.
ASE’s utilization rates in Q2
“In terms of the second quarter, I think the overall utilization will be around 70% and will reach the 70% hurdle threshold earlier than what we were expecting,” Tung said.
Demand for automotive, consumer and industrial
“I think it's a general consensus that other than maybe automotive, the other sectors are gradually recovering. In terms of automotive, I think on the high end, automotive actually is having much better momentum at this point. But the legacy, the MCUs and the lower end stuff, is still going through some level of inventory correction at this point. So from our own business portfolio perspective in automotive, we will see growth in this area for this year as well,” Tung said.
The schedule for panel-level packaging
“In terms of our own panel, I think we're in the process of establishing and aligning a pilot line for the customer qualification scheduled in (the) later part of 2025, and ’26. The actual adoption and timeline will be dependent on customers,” he added.
Amkor
On April 28, Amkor reported mixed results in the quarter, but it beat Wall Street’s expectations.
U.S.-based Amkor, one of the world’s largest OSATs, reported sales of $1.322 billion in the first quarter of 2025, down 3% from the like period a year ago and down 19% from the previous quarter. Net income attributable to Amkor was $21 million in the first quarter, compared to $106 million in the previous quarter and $59 million a year ago.
“Amkor delivered first quarter results in line with expectations, with revenue of $1.32 billion and EPS of $0.09,” said Giel Rutten, Amkor’s president and chief executive. “We are closely monitoring the evolving landscape with tariffs and trade regulations and potential impacts on our customers’ supply chains. Our diversified global footprint and long-standing partnerships allow us to help our customers work through complexity and uncertainty.”
During the quarter, Amkor’s sales in the communications market fell 19% year-on-year. Revenue in the automotive and industrial markets declined 6% year-on-year.
But the company saw strong growth in other markets. “Revenue in our computing end market increased 21% year-on-year, driven by multiple engagements across data center, networking, and PC customers, as well as accommodating dynamic build patterns for AI GPUs using 2.5D technology,” said Megan Faust, chief financial officer for Amkor, during a conference call. “Revenue in our consumer end market increased 23% year-on-year, driven by a continuation of the hearable program utilizing advanced SIP technology that launched in the second half of last year.”
The company provided the following guidance for the second quarter of 2025:
• Net sales of $1.375 billion to $1.475 billion
• Net income of $17 million to $57 million, or $0.07 to $0.23 per diluted share
•Full year 2025 capital expenditures of approximately $850 million
Amkor continues to expand its capacity. The company is in the process of building a packaging plant in Peoria, Ariz. Amkor Technology Arizona is expected to start production in the early part of 2028.
“The project is progressing very well,’’ according to officials from Amkor. “The design is complete. Amkor is currently in the process of selecting a general contractor for the facility in Peoria.”
To build the plant, Amkor received $400 million under the CHIPS Act. “Amkor must meet the defined deliverables to receive reimbursement,” according to officials from Amkor.
Amkor is also expanding its test capacity. “This quarter, we confirmed plans for a turnkey test solutions expansion on our K5 campus in Incheon, Korea, where also our main R&D center is located. We expect the first phase of the expansion to be operational in the existing K5 facility by the end of 2025. The next phase, including a new building, is expected to be operational in the first half of 2027,” Rutten said.
JCET
On April 28, JCET Group, China’s largest OSAT, reported its financial results for the first quarter of 2025.
The company achieved revenue of RMB 9.34 billion in the first quarter of 2025, a 36.4% increase year-on-year. Net profit attributable to owners of the parent was RMB 200 million, a 50.4% year-on-year increase.
During the reporting period, JCET’s computing electronics segment increased by 92.9% year-on-year. The automotive electronics business increased by 66.0%. The industrial and medical electronics segment saw a revenue increase of 45.8% year-on-year.
Teradyne
On April 28, ATE giant Teradyne reported revenue of $686 million for the first quarter of 2025. GAAP net income for the first quarter was $98.9 million or $0.61 per diluted share.
Teradyne reported revenue of $600 million for the first quarter of 2024. GAAP net income for the first quarter was $64.2 million or $0.40 per diluted share.
During the first quarter of 2025, Teradyne’s test sales were $543 million, $69 million were in robotics, and $74 million in product test.
“We delivered first quarter revenue toward the high end of our guidance range with gross margin and earnings per share above the high-end of our expectations. Strength in Semi Test, specifically SoC for the mobile end market drove year-over-year growth. This mobile demand is transitory and related to some supply chain transitions at our customers, rather than a signal of end market recovery. Our compute revenue also grew year-over-year in Q1 with record loading on our Ultra Flex and Ultra Flex Plus testers for AI accelerators. Revenue in our Product Test and Robotics divisions were generally in line with our expectations for Q1,” said Greg Smith, chief executive of Teradyne, during a conference call.
“In Semi Test, SoC delivered above our plan, and memory was in-line with our expectations as customers digest the HBM, or high bandwidth memory, capacity that was put in place last year. In the quarter, our Memory Business Unit secured a coveted HBM4 performance test win with a major DRAM manufacturer, which is expected to begin shipping in the second half of this year. This is our first DRAM wafer sort win at this customer and a major milestone for our memory business,” Smith said.
The outlook is cloudy. “In the near-term, the combination of trade policy and our customer’s heightened uncertainty around end market demand has caused orders to push out, as we discussed last month. Although the direct impact of current and anticipated 90-day tariffs on our model is minimal, we are more concerned about the impact of tariffs on end market demand. Many of our customers, primarily in the mobile, automotive, and industrial segments, are reviewing their capital acquisition plans, and we do not have firm forecasts from them at this time,” Smith said. “Beyond the second quarter, our visibility is very limited. As such, we are not commenting on or reaffirming our expectations beyond the second quarter.”