Hello. I am Ken Hsiang, the head of investor relations for ASE Technology Holding. Welcome to our first quarter 2021 earnings release. Thank you for attending our earnings presentation today. Please refer to our safe harbor notice on page two. All participants consent to having their voices and questions broadcast via participation of this event. If participants do not, please disconnect at this time. I would like to remind everyone that the presentation that follows may contain forward-looking statements. These forward-looking statements are subject to a high degree of risk, and our actual results may differ materially. For the purposes of this presentation, our dollar figures are generally stated in $, unless otherwise indicated. As a Taiwan-based company, our financials are presented in accordance with Taiwan IFRS. Results presented using Taiwan IFRS may differ materially from results using other accounting standards, including those presented for subsidiary using Chinese GAAP. I'm joined today by Dr. Tien Wu, our COO, and Joseph Tung, our CFO. For today's call, I will first be going over our financial results. Joseph and Tien will then be available to answer questions during the Q&A. During our last earnings release, we talked about seeing an increasingly tight semiconductor supply chain. At the time, we indicated that we saw tight supplies of wafers, components, substrates, and capital equipment. The tight supply environment continues to be true today. During the quarter, headlines citing semiconductor shortages have spread into daily newspapers. Semiconductor companies, our customers, have started to plan further out with orders being placed now for products to be delivered in 2022. Order term loading agreements, which seemed like an unusual request in the back half of 2020, now are being regarded as a requisite by not only us, but by our customers as well. Last quarter, we expressed that we expected the logic semiconductor industry to grow between 5%-10% during 2021. We also stated that our ATM business generally targets to grow two times that number. Since that time, we certainly have seen an overall step up in our business. However, we also see some constraint becoming more of an obstacle for further growth. Nevertheless, even with these constraints considered, we still see an improved growth environment with our growth to be on the very high end of the original range. All signs continue to point towards 2021 being a banner year for our ATM business. Meanwhile, our EMS business went through its seasonally soft quarter. For us, volatility tends to be the norm each quarter. This year, with business coming in a little behind our expectations during such order fine-tuning, this year's target manufacturing was made even more complex by bill of material constraints. Looking forward, we do see various product ramps coming, including new SIP and traditional EMS projects in the next few quarters. Please turn to page three, where you will find our first quarter consolidated results. Intercompany transactions between our ATM and EMS business have been eliminated during consolidation. For the first quarter, we recorded fully diluted EPS of $1.94 and basic EPS of $1.99. Consolidated net revenue decreased 20% quarter-over-quarter, but increased 23% year-over-year. This sequential decline was primarily driven by seasonality of our EMS business. We had a gross profit of $22 billion with a gross margin of 18.4%. Our gross margin improved by 2.7 percentage points sequentially and 1.8 percentage points year-over-year. Both margin improvements are principally the result of higher ATM business mix. Our operating expenses decreased by $1.8 billion to $11 billion, mainly as a result of lower bonus expenses during the quarter. Our operating expense percentage increased 1.1 percentage points sequentially and declined 1.2 percentage points year-over-year to 9.2%. The operating expense percentage increase is mainly the result of seasonality. On a full year perspective, we should see improvement from last year's 9% level. Operating profit was $11.1 billion, down 0.1 billion sequentially, and up $5 billion year-over-year. Sequentially, operating margin increased 1.7 percentage points to 9.3% and increased 3.1 percentage points year-over-year. From a total year perspective, we previously expected to be able to achieve 0.5-2 percentage point improvement. We now expect to be able to improve our full year consolidated operating margin by 2.5-3 percentage points, driven by increased scale, a friendly ATM pricing environment, and SIP synergies. During the quarter, we had a net non-operating gain, $0.3 billion. This amount primarily consists of gains related to our foreign exchange hedging activities, investments, and asset sales, offset in part by net interest expense of $0.6 billion. Tax expense for the quarter was $2.5 billion. The effective tax rate for the first quarter was 22%. We expect to have an effective tax rate for the year of between 20%-21% during the full year. Net income for the quarter was $8.6 billion, representing a decline of $1.5 billion sequentially, an improvement of $4.7 billion year-over-year. On the bottom of the page, we provide key P&L line items without the inclusion of PPA-related expenses. Consolidated gross profit excluding PPA expenses would be $22.9 billion, with a 19.2% gross margin. Operating profit would be $12.2 billion, with an operating margin of 10.2%. Net profit would be $9.7 billion with a net margin of 8.2%. Basic EPS excluding PPA expenses would be 2.26. On page four is our ATM P&L. Worth noting here that the revenue reported here, revenue eliminated at the holding company level related to intercompany transactions between our ATM and EMS businesses. During the first quarter, our ATM factories not only held fourth quarter production run rates as per our original expectations. Our factories were able to surpass them. As you will see, we were also able to achieve higher than expected profitability as a result of these stronger revenues and on higher test revenue mix. For the most part, the majority of our ATM product lines were running at full or near full capacity. Our wire bond business continues to be capacity constrained, driven not by just increased unit demand, but also by unit bonding complexity. During this time, our ATM factories have remained diligent to our customers, trying to supply as much capacity as possible. To cope with the current environment, our preference has been, in no particular order, to pass through raw material price increases, correct for underperforming engagements, enter into long-term loading contracts, and secure key customer relationships. We continue to work with our customers who are trying to work through an extremely challenging production environment. For the first quarter of 2021, revenues for our ATM business were $73.8 billion, up $1 billion from the previous quarter, and up $7.6 billion from the same period last year. This represents a 1% increase sequentially and an 11% increase year-over-year. Our ATM revenues came in slightly ahead of our expectations. On a U.S. dollar basis, our ATM revenues grew by 3% sequentially. This marks the first time in near-term history in which ASE's first quarter had sequential revenue growth. Gross profit for our ATM business was $18 billion, up $1.5 billion sequentially and $4.7 billion year-over-year. Gross profits improved both sequentially and annually, primarily as a result of higher manufacturing efficiency and significantly higher off-season loading. Gross profit margin for our ATM business was 24.4%, up 1.8 percentage points sequentially and 4.3 percentage points year-over-year. Our gross margin improvement was due to improved loading and a high percentage of low raw material product. ATM gross margin improvement was accomplished despite NT dollar appreciation, having a negative 0.8 percentage point impact quarter-over-quarter and a 2.7 percentage point impact year-over-year. Looking forward, we do expect this beneficial product mix to reverse itself in the second quarter, and even switching to a high raw material product mix in the third and fourth quarters. However, even with this product mix shift looming, we expect to be able to deliver gradually improving gross profits throughout 2021. We are well on our way to achieving full-year gross margin in the mid-20s. During the first quarter, operating expenses were $8.1 billion, down $0.4 billion sequentially and up $0.3 billion year-over-year. The sequential operating expense decline was primarily driven by a decline in employee bonuses. Meanwhile, the year-over-year operating expense increase was the result of higher employee salaries due to higher headcount and higher bonus accrual. Our operating expense percentage was 11%, down 0.6 percentage points sequentially and down 0.7 percentage points year-over-year. During the first quarter, operating profit was $9.9 billion, representing an improvement of $1.9 billion quarter-over-quarter and an improvement of $4.3 billion year-over-year. Operating margin was 13.4%, improving 2.4 percentage points sequentially and five percentage points year-over-year. Without the impact of PPA-related depreciation and amortization, ATM gross profit margin would be 25.6% and operating profit margin would be 15%. On page five, you'll find a graphical representation of our ATM P&L. On page six, ATM revenue by market. You can see here a seasonal decline in the comms market segment. However, our automotive consumer and other products picked up to fill the typical seasonal decline gap. On page seven, you will find our ATM by service type. The quarterly move happened to be too small, but the chart taken as a whole tells a more complete story. You can see here the gradual improvement and underlying strength of our wire bond-related business. Meanwhile, our advanced and testing service types have seen a decline, much of which having to do with the impact of the U.S. EAR. On page eight, you can see the results of our EMS and a graphical representation of gross revenue by application. The information we provide in regards to our EMS business may differ materially from the information directly provided by our subsidiary, as they report independently using Chinese GAAP. During the quarter, our China-based factories were subject to a special government policy for lowering the risk of COVID-19 by means of reducing travel across China during the Lunar New Year holiday. China highly encouraged factories such as ours to maintain staffing levels throughout the Lunar New Year holiday. This resulted in extra unexpected labor expense. This, along with softer than expected business, contributed to the lower than expected profitability. During the first quarter, EMS revenues declined 40% sequentially, primarily due to product seasonality. EMS revenues increased 46% year-over-year as a result of having an expanded revenue base of products. Our EMS gross profit was $4.2 billion, declining $2.8 billion sequentially and increasing $1.1 billion year-over-year. The lower sequential EMS gross profit was the result of lower loading due to seasonality, and the higher year-over-year gross profit was the result of higher sales from a wider product base. Gross profit margin for the EMS business came in at 8.7%, which is a decline of 0.1 percentage points sequentially and 0.6 percentage points year-over-year. In addition to the aforementioned level staffing rule, the gross margin sequential decline was primarily the result of lower scale during the seasonally down quarter. Year-over-year, this decline is principally the result of the level staffing rule and product mix. Our EMS business unit's first quarter operating expenses were $2.8 billion, declining $0.7 billion sequentially, while increasing $0.5 billion year-over-year. The operating expense sequential decline is the result of lower bonus expense, while the annual increase is the result of China's level staffing rule. Our operating expense percentage increased 1.4 percentage points sequentially to 5.9%, while declining 1.1 percentage points year-over-year. The operating expense percentage movements are driven by lower bonuses in the first quarter and sales seasonality. Our EMS operating profit declined $2.2 billion sequentially while improving $0.6 billion year-over-year. Our EMS operating margin was 2.8%, declining 1.6 percentage points sequentially and up 0.4 percentage points year-over-year. From a full-year perspective, we continue to target a 4% operating margin for our EMS business. On the bottom half of the page, you will find a graphical representation of our EMS revenue by application. You can see here that seasonally driven products in consumer and communication segments each declined by six percentage points. Other segments were generally seasonally soft, but were not as strongly pronounced. On page nine, you will find key line items of the balance sheet. The only thing that we would like to add are that total unused credit lines amounted to $255.2 billion, and our net debt to equity ratio dropped to 61%, the lower end of our targeted range. Page 10, you will find our equipment capital expense amounts on this in the U.S. dollar. Machinery and equipment capital expenditures for the first quarter totaled $471 million, of which $337 million were used in packaging, $118 million in testing, $11 million in EMS operations, and $5 million in interconnect materials and others. From the full year perspective, we currently expect to increase our wire bond capacity by about 10%-15% during the year. We ended 2020 with slightly more than 26,000 wire bonders. We also currently expect our 2021 equipment capital expenditures to increase 10%-15% as compared to last year. We expect to invest roughly 65% of our CapEx on packaging equipment and 20% on testing equipment. The current environment is a challenging one. It is incredibly difficult to manage capacity allocations. We continue to see tight wafer, substrate, component, and capital equipment deliveries throughout the remainder of this year. It's even coming full circle for us. Some of our capital equipment vendors are telling us that their equipment delivery schedules are slipping because of lack of semiconductors. We are well aware that perceived capacity scarcity potentially perpetuates a snowball effect, with customers scrambling for even more incremental supply chain security. There are rumblings that capacity has been systemically under-built for years, but we have only been capacity constrained outside of typical seasonality for just this quarter. At the very most, under-ordering in early times of COVID created an artificial lull in demand and capacity build. We don't believe the current situation is simply explained away by saying, the semiconductor industry had under-invested, specifically to us, in back-end capacity. The worldwide capacity was in balance two quarters ago. For us and others, there is a resurgence of the trailing edge underway. We see longer term shifts in product complexity, the expanded use of trailing edge technologies, and geopolitical disruption as having a hand in this supply and demand imbalance. Regardless of the cause, we believe we stand to extend our competitive advantage during the coming year. Not only do you look at who has the largest capacity at this time, what you have to ask is, who gets the allocation of capital equipment in these times? Who has the advantage in getting allocation of components and substrates at this time? Who invested during the last three years while everyone else held back? Who can supply chain managers trust with their jobs to deliver on long-term loading agreements? Industry leaders like us stretch their leads in times like these. With that, we would like to provide our second quarter business outlook as follows. For our ATM business, our ATM second quarter sequential business growth should be similar with our second quarter 2020 sequential business growth rate. Our ATM second quarter 2021 gross margin should slightly improve from the first quarter. For our EMS business in U.S. dollar terms, EMS second quarter business should be similar with third quarter 2020 business levels. Our EMS operating profit margin should be slightly below full year 2020 levels. Now we open the floor for Q&A. If you have one, please raise your hand in the Webex. First question is coming from Randy Abrams, Credit Suisse. Randy? Okay. Yes, thank you. Actually, if I could ask the first question, I tried to get down the guidance real quick, but want to just make sure I have the right understanding. For IC ATM, we should imply about 5% if I look back to last year in U.S. dollar terms, with slightly up gross margin. For EMS, I think I saw compared to the third quarter 2020 growth rate. Is that a sequential or a year-on-year for that growth? For operating margin, I assume it's slightly below, so it's a good sequential improvement. If you could just recap it just so we have the right assumption on those guidance metrics. I don't have it. I can hear you. I didn't write it down. Oh, the guidance that we provided for ATM, you're correct. In terms of ATM, on the top line, we're expecting the same level of growth that we saw in previous second quarter. In terms of the gross profit margin, we're looking at slight improvement in the quarter. For EMS, we are looking at EMS second quarter. The top line will be similar to third quarter 2020 level, and the operating margin slightly below full year 2020 level. Okay. If I could follow up, two things on the constraints. Is there a way to think about how much it is limiting you or how much behind you are on IC ATM, and is it strictly a wire bond that's still the bottleneck? Or do you now have constraint on your more advanced packaging, the flip chip and wafer-level packaging as well? The constraint we were referring to applies to capital equipment, including wire bonder. Also related to substrates, lead frames, and other components that are required to do the final assembly. Every product is different. I cannot tell you, but definitely it's not just a wire bonder thing. In terms of how do we manage the line balance, I think that's the operations job. Whenever we're missing some components or materials, we try to do the line conversion. We switch back to the other assembly where we have materials in reserve. In terms of how much that limits our potential growth, it's very difficult to quantify that because the process right now is very dynamic. I won't be able to give you a comment, a quantitative number. Okay. The second part of the guidance outlook, the EMS actually picking up in second quarter. Last year it did, but some years it's still down. If you could talk about the drivers for the pickup, if there's some SIP projects or just existing EMS business recovering a bit earlier. If you could give an update on the overall SIP outlook, how that's now looking, whether on a year-over-year or if any change versus the incremental growth you were expecting. I think from second quarter as well as for the full year in terms of EMS, we will continue to see growth. For this year, I think EMS will go through a typical first and second half distribution of revenue. It will be similar to roughly 44/56 or 43/47 type of allocation distribution. I think the overall growth comes both from the traditional EMS as well as SIP. In terms of SIP, I think last year we went through a phenomenal growth in terms of SIP revenue. We have been entertaining many more projects and many more customers as well. In terms of the new project revenues, we had about close to $400 million of revenue coming from new projects, and we are seeing the same kind of momentum this year. Overall, I think in terms of the composition of the SIP revenue, there are some mature products going through gradually tapering off because of feature transition. There is some projects that we are seeing second sourcing coming in. On the other front, there are new projects and there are the newer projects that we started to entertain from last year. We're seeing started to also kind of expand for this year. We're going to see decent growth in SIP overall, and particularly in terms of new projects, so we're seeing still very strong momentum going forward. Okay. Tien, I could try to dig on the 47/53. Is the implication IC ATM, you had mentioned high end of the 2X, which seems to imply U.S. Dollar up mid to high teens? Is EMS similar type of growth profile, factoring you consolidate? I think the overall annual growth in the EMS business will be slightly better than the ATM overall growth for the year. Okay, great. If I could ask a follow-up, actually two questions on the CapEx. One is the upgrade. I think if I have it right, it was originally maintained at the high level you invested last year, but now increasing. That's one, I guess, the area that relative to the prior, the area you're increasing. Then the second one on the wire bond at 10%-15% year-over-year. Is that more what you see as the need based on real demand, or is it a constrained number that you would add even more if capacity? If I could fit a third, I'm curious. The foundries, usually they'll talk, it takes a couple of years to bring up fabs, so we might have a shortage for two years. Do you have a view on sustainability of the tightness? Where traditionally lead times, they're stretched, but a bit shorter than building a fab, how long it looks like. If this looks like it may extend into next year at this stage. The wire bonder delivery right now is one year. It's anywhere between 40-52 weeks. That's the wire bonder delivery. In other words, whatever wire bonder that I ordered now, it won't be delivered until next year. The wire bonder lead time, as well as the other equipment that go with the wire bonding line, also got elongated. The wire bonder demand right now is clearly above the efficiency improvement, as well as the new capital equipment that we can receive this year. Right now, the wire bonder is under allocation and highly constrained. Previously, I made a comment that for the whole year of 2021, we will see wire bonding. I'll maintain this, except that the wire bonder constraint might last a little bit longer. The back-end equipment has a shorter lead time comparing to the fabs. I will not draw comparison between one to the other. Right now, the supply-demand imbalance is obvious for the whole industry, which is why many of our customers who already signed long-term agreement, and we are talking about how do we collectively, through the design optimization, material standardization, we can collectively improve the efficiency to support them for 2021 as well as 2022. Okay, great. That's helpful. I guess just to help, if you could clarify, the increase in CapEx, it sounds like that might be an area you could place order to get additional tools. Was there kind of versus the prior framework, where the new spend is directed? The CapEx right now is literally across the board. We're seeing the test equipment, we're seeing the fan-out equipment, we're seeing the bumping equipment, we're seeing the wire bond equipment. Almost all kinds of equipment we're issuing CapEx. Right now, we're working with our suppliers, trying to prioritize delivery schedule. In terms of the total equipment that we plan to order, we will stay at the up level, the high level, if not exceeding last year. In terms of the actual delivery, that is what we need to do from the operation perspective. Now, why are we placing order knowing that we have such a long lead time? Because our customer's development and product cycle, as well as the long-term service agreement dictates that. We're working closely with our customer to understand the demand profile long term. All of the capital equipment expansion, we'll take that into consideration. Okay, great. No, appreciate the color. Thank you. The next caller we have is Gokul from JPMorgan. Thanks. Gokul, go ahead. Yeah, can you hear me? Yeah, we can hear you. All right. Thank you. The first question, could we talk a little bit more in detail about what are you seeing, what is the nature of these longer term commitment orders? Are you talking about two to three years price, fixed contract, fixed volume kind of orders? What does that mean for ATM pricing, margins, et cetera? Are these primarily for wire bond or are we also seeing this spread to other areas in advanced packaging as well? Could we talk a little bit more about what are the nature of these kind of longer-term commitment orders that you're getting? The long-term service agreement depends on customer. Each one is different. I will not comment detail on that. The comment that I can make is the service agreement right now covers more than just the wire bonder. It was wire bonder the second half of 2020, and now we're spreading into flip chip and the other areas, because we do see a general constraint of the assembly capacity. In terms of the pricing environment, the pricing environment remains friendly. As you know, we do not do tactical pricing. What we're doing right now is we're working closely with our customer to reflect the raw material and the other component pricing increase. We took that into account, and we also work close with customer on long-term service agreement in terms of total demand, the capacity we need to build on behalf of their demand. The only area that I would like to comment is, there are specific sectors where super hot run, as well as the expedited product requirement. Normally we will have the expedite fee to apply for those particular cases. In general, the environment remains friendly, and I believe that condition will at least applies to whole year of 2021, if not longer. Thank you, Dr. Wu. If I may also ask about chiplets and the 2.5D 3D packaging. Clearly a lot of our compute customers especially seem to be talking about this in a very aggressive fashion. Could we refresh what is ASE's views on this area? When we think about the CapEx increase, are we allocating some of that CapEx to your fan-out as well as 2.5D packaging efforts as well? Those efforts are still going to come a little bit later? Well, I see from the general, the mega trend. You understand for the 2.5D, the 3D, or the chiplet, whichever architecture you're referring to, there has been growing acceptance as growing demand from all regions, all application sectors. ASE has been developing with our key customer, those architecture. That has been in place for quite some time. Now, the 2020 and the 2021 scenario, as we're in right now, has modified the situation a little bit in the sense that because our long-term service agreement with all of our key customers, the chiplet, the 2.5D fan-out also becomes a strategic development requirement as part of that overall long-term service agreement. In other words, as we're going through better delivery cycle with our key customers, we are expected to do more development with them, trying to further improve the efficiency and the performance from an architectural standpoint as well as from a process point. I'm not sure the exact question that you're asking, but I believe those are answers that I can offer you today. Thank you. Got it. Thank you. Are we all set there, Gokul? Yes. I will go back into the queue. Thanks. Okay. The next question will be coming from Bruce Lu, Goldman Sachs. Bruce, are you on the line? Yes. Thank you for the presentation. Very good result. Can you give us a little bit more color in terms of 2021 ATM overall? I look at the first quarter revenue was very strong. Do you expect the same year-over-year performance for the whole year? Also for the profitability, the gross margin to improve more than 2.5 percentage point already, but guiding only 2.5% operating margin improvement. I would be greedy to ask for a little bit more because operating leverage. Thank you. I think the overall growth momentum in terms of ATM remains to be strong. In the previous earnings call, we were saying that our overall growth will be 2x of the logic market growth. I think that principle remains. Although we're seeing the overall industry growth is kind of stepping up. Because of some of the capacity constraint, we're now saying that our overall growth should be approaching the high end, which we actually said in the last call, saying we're expecting the growth to be anywhere from 10%-20%. We're seeing that the growth is likely to be reaching the high end of the range. In terms of profitability, I think at the gross level, we'll continue to see sequential growth in our gross margin as we continue to enlarge our overall operation, also improving the efficiency that we have. For the whole year, we are very confident that we will be reaching the mid-20% level. The operating margin improvement that you mentioned is really on the consolidated basis. On holdco, that we're projecting 2.5%-3% improvement now. When translate to ASE, of course, the improvement will be higher because we're only setting the EMS operating margin target to be 4% for the year. All right. Thank you. Can I drill down a little bit for the ATM gross margin improvement in the first quarter? The gross margin was improved by 180 basis points compared to the previous quarter, but the earlier guidance for the first quarter GM for ATM is flat. Where are the positive surprise coming from? Can you also give us a rank in terms of the gross margin among different businesses in ATM, such as wire bond testing, flip chip, SIP? What was the rank for the gross margin now? We don't give out separate gross margins in our different business. As a whole, I think the improvement that we saw in the gross profit margin in this quarter, largely coming from, first of all, the higher than expected revenue that we can generate in the quarter. The other is really we have a higher test revenue as well. In terms of the percentage of our overall revenue, test percentage is higher than expected. That leads to a better than expected gross margin performance in the quarter. Just one additional comment. When we offered the guidance last year, we were planning for the seasonality. In other words, the communication sector will go through the typical Q1 and Q2 seasonality. At the time, we were planning on some of the equipment dealing with the communication sector might not be fully utilized as well as the test equipment, as well as the assembly or the SIP equipment. What has transpired in the first quarter was because of the loading situation and strong demand, we were able to collectively cooperate with our customers, trying to utilize some of the idle equipment that would've been underutilized otherwise. That, as a result, improved the revenue stream as well as the profit. That is just another comment. We believe the similar thing will permeate into Q2. In other words, what is unique about 2021 is we sort of are removed from the typical communication sector seasonality in Q1 and Q2. Having said that, in Q3 and Q4, we will go through the reverse part of the seasonality. For right now, from the operation execution-wise, we have to work very hard to secure all of the supply, all the equipment, and all of the necessary resources to make sure that after clear Q1 execution, we execute too well, and we can deal with the second half, including the ATM, as well as the SIP, as well as the traditional seasonality of the communication sector. Overall, I think 2021 will be a very exciting year. In terms of the supply situation that covers wafer, covers leadframe, ABF substrate, capital equipment, that you're all very familiar with, we will try to give you quarter-to-quarter update. As of today, we have done a decent Q1 because of the factor that Ken, Joseph, and I have just outlined. We're optimistic about Q2, and we're quite excited about the second half of 2021. There are some headwinds, the NT dollar that we have not discussed much about it. The other type of constraints, and of course, now there is the general global political situation, as well as the pandemic. With all considered, we have given you the best guidance that we believe is pertinent to the current uncertainty scenario. I hope that clarified a lot of the questions about Q1, and also the outlook for Q2 and the second half. Thank you. Can I ask a question about EMS? I think the guidance for the second quarter for EMS grew about 10%, despite the typical low seasonality. How much is due to the Asteelflash acquisition? Also, the consumer segment in EMS in first quarter seems to went down a lot. Do you see a rebound in the second quarter as well for the consumer segment in EMS? Second quarter compared to first quarter, we're seeing that both the I think really is the organic growth that we're going to see, largely because of the special growth is mainly from the supply chain security continuity. I think a lot of the customers are, because in the whole value chain, there's constraints in terms of component and some of the material supply. I think some of the customers are really bumping up their inventory, hoping to get their safety stock go up. We're seeing an uptick in second quarter, which is not a very typical second quarter performance. That's what we're seeing now for EMS specifically second quarter. The whole year, how do we see the whole year's revenue growth for the EMS? Because nowadays, seasonality doesn't really seem like a reference anymore. Like I said, in terms of the overall EMS business, we're expecting kind of a 44%, 56% kind of a split between the first and second half. I think going into the second half, we'll see new products coming on stream, and we're seeing more product launching, and then we'll go back to the typical seasonality, seeing a much stronger uptick in the second half. Okay. Let me try to squeeze one more question. We do see a somehow different production utilization rate, especially the wire bonder between ASE and a lot of Chinese OSAT makers. Most of Taiwanese companies in OSAT are having extremely high utilization rate, but China is high, but it's a step down comparing to most of the Taiwanese guys. Can you let us know what happened and why is that? I think the supply security applies somehow into that scenario. In other words, if a supplier that has a longer working relationship, who can cooperate not only the assembly complexity for you, the quality, who can also secure better component molding compound, as well as the lead frame and substrate supply, I believe that plays into the fact why people tend to place more order, even though it's on the allocation mode. They still prefer to work with the ASE or our peers in Taiwan. I can't really comment on the China OSAT because I'm sure you know this scenario better than I do. I think the product complexity, the product security, and the geopolitical sentiment might not play into their decision. That, you have to talk to the customers. Tien, don't get me wrong. I fully agree that ASE should have a much stronger customer demand, but your customer are actually dying or in serious shortage. They need to grab. Like dying people, they grab whatever they can, right? The gap seems to be a bit larger than I expected. I think that's- get some clarity. I think that's precisely the point. I think when things are tight, I think most of the customer will look for the safest bets. Given our scale and given the leverage that we have, in terms of sourcing, capital equipment as well as materials, I think we are much safer bet to our customers. That's one front. I think the other one is that, given geopolitical situation, I think there is a growing concern on the longer term or mid to longer term sustainability of some of the Chinese players. I think it does play into the current situation a bit. I see. Understand. Thank you. I'll go back to the queue. Thank you. All right. Thank you. Next question is coming from Roland Shu of Citi. Hi. Thanks for taking my question. J ust a quick question on the CapEx. I think for today, I don't hear you update your total CapEx spending plan this year. How is the CapEx spending plan this year? I think Ken briefly mentioned that this year, we are expecting to spend roughly 10%, 15% more than we spent last year in terms of equipment CapEx. This is really to support the surging demand that we're seeing now. Although we brought up the overall CapEx spending amount this year, but in terms of actual spending, it really depends on the delivery that we will have. Nonetheless, I think that's the current situation, we are upping our CapEx. In terms of distribution, I think out of the total spending, roughly 65% will be for assembly, around 21% for tests, 12% for EMS and the rest for our material. I think that will be the distribution for this year. Understood. So far, I think that the total number should be somewhere around $ 1.9 billion-$ 2 billion you are planning, right? Yes. Last year we spent close to $ 1.7 billion. Yes. Yeah. This year 10%-15% higher. Yeah. Okay. Yes. Cool. Correct. Thank you. Probably your 80%, 85% for assembly and testing. Our question is, you look at TSMC's CapEx spending on advanced backend and their mask making, is going to be around $3 billion this year. This actually is much higher than your total spending, about $2 billion this year. Does it mean that you have to raise CapEx spending significantly, going forward, if you are also trying to do more advanced packaging business? Well, the comment about the TSMC CapEx for the backend, I think the first clarification I would like to make is, you really cannot make. It's not a direct comparison. The CapEx that they're referring to for their backend, versus the CapEx we are referring to for the assembly equipment, are very, very different in nature. If you really go back to the CapEx, the equipment list, and you will understand that. There is no direct comparison that I can draw between that levels. Now, the second comment is, if our customer demand us to engage in the type of configuration or the architectural design where our customer are designing with foundry suppliers, then we are obligated to work with our customer to come up with our proposal. Our proposal could be in the form of what the foundry is using, but it might not be in the form. It's up to the customers how to design their packaging, the architecture with us. That is a hypothetical questions. Right now, we are engaging with said customer, trying to explore our end of the proposal. Now, in some form, there will be overlap, but in the majority of the form, it will be quite different. Right? I don't believe our CapEx will be at the foundry level, because in nature it is extremely different. Also, in terms of the variety, it's also quite different. Because we're not dealing with the large, high volume capacity for a few customers. The process and the architectural design we need to come up with has to be able to fit into the application segment for a basket or a number of customer interchangeably. That is the key difference between the business model versus the CapEx. Okay. Correct me if I am wrong. You are pretty much meaning TSMC is building its technology and proprietary technology for their customers. This technology probably different from the platform technology you are doing for customers product across the board. Am I reading you right on that? Yeah. That I believe. Again, it's not what the ASE wants. It's what ASE customers wants. Understood. Okay. Yeah. Thank you. I think a follow-up question is, in the past, you said, for every $1 CapEx you invest on assembly, it probably will be generate a $1 new revenue in the first year and more than $1 new revenue generation for testing for the first year. For the CapEx you are spending now, and because of this capacity tightness, are you still going to generate a similar return for the CapEx or investment that you invest in your new capacity now? I think as a rule of thumb, $ 1 of investment in packaging, we can generate about $1.20 of revenue on an annual basis. For a test, $ 1 of investment, we can generate about $ 0.50 of revenue. From a blended point of view, I think what we're saying is, in terms of assembly and test, $ 1 of investment should generate $1 of revenue for us, appended revenue for us, to make it an economically viable investment. I think from a different angle to look at TSMC's investment into back-end, that's totally different scenario. Yeah, I know it's very different. In general, you said from the back-end, for every $1 investment, you probably will generate a $1 return. This is still the thumb rule, still valid, right? That's still the rule, yes. Okay. Thank you. Thanks for taking my questions. Thank you. All right. The next caller we have is Szeho Ng. Oh, hi. Szeho are you with us? Hey. I'm Hong Kong. Yeah, thanks. Yeah. I have two questions for you guys, anyway, good. First one, regarding the wire bonder delivery. I read off the math in Q1, you got roughly 1,100 wire bonder this, right? I basically want to know the wire bonder delivery schedule for this year. I think currently we're looking at 3,500 to 4,000 bonders for this year. We're expecting full delivery by maybe October, November timeframe. It will be delivered progressively, and I think full delivery we're expected by October, November timeframe. Oh, okay. Got you. Okay. All right. The other one is on the housekeeping. What is the utilization for your wire bonding business and testing as at Q1? Where rough number would be by? I think in terms of packaging, we're around 85%, and for- tests, around 80. That's the theoretical capacity utilization, right? I believe. Yeah, we're pretty much maxed out. Okay, good. Last one, on the dividend policy, any update compared with three months ago? No, I think we've announced it already. It's going to be $4.20 this year. The payout ratio is roughly 65%. Okay, that will be the rule of thumb for the future. At least for the near future, right? Yeah. Yes. Okay, great. Congratulations on the good results. Thank you. We don't have any additional hand raisers in the queue. If you want to ask any questions, please raise your hand. Five seconds. Four, three Okay, thank you for attending our first quarter earnings release. See you next time. Thank you. Thank you.