Chipmos Technologies Q2 Earnings Call Highlights

Key Points

• ChipMOS reported a major earnings rebound in Q2 2026: Revenue rose 28.7% year over year to NT$7.38 billion, while net profit reached NT$892 million versus a loss of NT$533 million a year earlier. Gross margin improved to 18.0% as pricing, product mix and utilization strengthened.
• Memory demand led growth, with memory revenue up more than 46% year over year and DRAM revenue increasing over 70%. Management expects memory momentum—particularly DDR4 and DDR5—to outpace driver IC growth in the second half.
• ChipMOS is accelerating capacity investments: 2026 capital spending is expected to exceed 25% of revenue, funding memory testing, assembly, automation and AI-related capabilities. A newly acquired Tainan facility is planned to support additional memory and mixed-signal capacity beginning in 2027.

Chipmos Technologies NASDAQ: IMOS reported second-quarter revenue at its highest level since 2014, with stronger pricing, product mix and factory utilization lifting profitability as demand continued to exceed available capacity, Chairman and President S.J. Cheng said on the company’s 2026 semi-annual earnings call.

Second-quarter revenue reached NT$7.38 billion, up 6.5% from the first quarter and 28.7% from a year earlier. Net profit attributable to the company was NT$892 million, compared with a loss of NT$533 million in the second quarter of 2025. Basic earnings were NT$1.28 per common share, or $0.80 per basic American depositary share.

“We delivered a strong start to 2026 with a real earnings inflection,” Cheng said, citing demand that remains above capacity, improved pricing and favorable operating leverage. He added that customer visibility remained strong and that AI-driven demand continued to outpace supply.

Margins and utilization improve

Gross profit was NT$1.33 billion, producing a gross margin of 18.0%, up from 13.8% in the first quarter and 6.6% in the prior-year quarter. Operating profit rose to NT$948 million, with an operating margin of 12.8%, compared with a 7.5% margin in the first quarter.

Vice President of Finance and Accounting Management Center Silvia Su said quarterly profit attributable to the company increased 76.6% sequentially, primarily reflecting a NT$428 million increase in operating profit. Compared with the year-earlier period, results also benefited from lower foreign-exchange losses and a gain from the valuation of financial assets.

Overall utilization reached 72% in the second quarter. Assembly utilization was 78%, while average testing utilization was 74%. Driver IC utilization was 69% and bumping utilization was 65%.

• Assembly accounted for 31.8% of second-quarter revenue.
• Mixed-signal and memory testing represented 25.4% of revenue.
• Wafer bumping represented 23.7% of revenue.
• Memory products accounted for 51% of revenue.

Memory demand leads growth

Memory revenue rose approximately 6.7% from the first quarter and more than 46% from a year earlier. DRAM represented about 20.7% of total revenue, increasing 1.3% sequentially and more than 70% year over year. Niche DRAM revenue increased 21.8% from the first quarter.

Flash revenue, which represented 29.5% of quarterly revenue, increased 9.9% sequentially and more than 32% year over year. NAND flash rose 6.3% from the first quarter, while NOR flash increased 15.8%.

Cheng said ChipMOS selectively raised memory outsourced semiconductor assembly and test, or OSAT, prices during the second quarter to reflect higher material costs. He said customer discussions had been positive and emphasized the company’s focus on long-term customer relationships.

The company expects memory momentum in the second half to exceed that of driver IC products. Cheng said DRAM should see more significant third-quarter growth, supported by demand for DDR4 and the ramp-up of DDR5 products. Flash demand is expected to remain steady amid seasonal stocking, although some customers are adjusting inventories.

DDIC business supported by automotive panels and OLED

Driver IC and gold bumping revenue represented about 39.2% of second-quarter revenue, increasing 7.1% from the first quarter and 14.1% from a year earlier. The segment benefited from rush orders and a favorable mix of automotive-panel and OLED products, which offset pockets of weaker end-market demand, Cheng said.

DDIC revenue rose 9.7% sequentially. Automotive-panel demand generated more than 39% of DDIC revenue and increased more than 8.2% from the first quarter. OLED represented just under 21.9% of DDIC revenue and rose 12.7%, driven by customer inventory replenishment.

ChipMOS also increased DDIC OSAT pricing in the second quarter to provide relief from operating costs. During the question-and-answer session, Cheng said the company expects to pass through additional increases in substrates, lead frames and gold, as well as higher costs for high-end probe cards used in driver IC applications.

By end market, automotive and industrial revenue represented 28.9% of the quarter’s total, up 14.1% sequentially and more than 45% year over year. Smartphone revenue accounted for 29.9% and rose 2.8% from the first quarter. Computing revenue represented 6.4% and declined 23.7% sequentially.

Capex plan rises as company adds capacity

The board approved an increase to ChipMOS’ 2026 capital-expenditure plan. Su said capital spending is expected to exceed 25% of annual revenue this year, compared with the company’s long-term goal of maintaining capex below 20% of revenue. She said capex is also likely to exceed 25% of revenue in 2027 as the company invests to support growth.

ChipMOS invested NT$2.38 billion in capital expenditures during the second quarter, including 43.1% for testing, 30.5% for assembly, 14.3% for LCD driver applications and 12.1% for bumping. Logic and mixed-signal investments are expected to account for about 7% to 10% of 2026 capex, with a higher proportion anticipated next year.

Cheng said the investments will address memory assembly and testing bottlenecks, automation and artificial-intelligence initiatives, as well as longer-term silicon photonics and AI ASIC testing opportunities. The company plans to expand its logic and mixed-signal portfolio beyond TV system-on-chip products into mobile and AI ASIC-related applications. New high-end testing equipment for mobile projects is expected to arrive at the end of the year.

The company also acquired a facility in the Tainan Science Park area to support memory customers’ capacity needs beginning in 2027 and mixed-signal expansion. Cheng said ChipMOS is building memory testing capacity and turnkey assembly and testing capabilities at the site, while consolidating clean-room space and improving logistics efficiency for anticipated growth over the next three to five years.

As of June 30, ChipMOS had NT$12.55 billion in cash and cash equivalents, down NT$2.31 billion from the beginning of the year. First-half free cash inflow was NT$736 million, compared with NT$1.67 billion in the same period of 2025, reflecting higher capital expenditures and income-tax expense.

About Chipmos Technologies (NASDAQ:IMOS)

ChipMOS Technologies Inc is a Taiwan‐based provider of outsourced semiconductor assembly, testing and packaging services. The company offers a comprehensive range of back‐end solutions including wafer probing, assembly, surface mount and final test services for memory chips, microcontrollers, system‐on‐chips and other integrated circuits. ChipMOS serves customers in the consumer electronics, communications, industrial and automotive markets by delivering reliable testing and packaging support to semiconductor fabless companies and foundries.

Founded in 1997 and headquartered in Hsinchu, Taiwan, ChipMOS operates multiple production facilities across Asia, including sites in Taoyuan (Taiwan), Guangdong Province (China) and Singapore.

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