As AI booms, ASMPT sets sights on lower-profile back-end of chip-making race

After logging a bumper year in 2025, the semiconductor equipment maker is concentrating its resources on the chip packaging process

Key Takeaways:

• Chip equipment maker ASMPT recorded a profit of HK$1.08 billion last year, nearly quadruple the figure for 2025
• Demand for AI chip packaging equipment helped to fuel a 146% revenue increase for the company’s thermo-compression bonding (TCB) equipment business

By Lee Shih Ta

The AI wave is reshaping the semiconductor landscape, giving rise to new giants like Nvidia, along with many others hoping to cash in on the profits. Surging demand for large model training and cloud computing power has fueled big appetite for AI chips, as well as high bandwidth memory (HBM) products, shining a growing spotlight on the strategic importance of chip packaging technology. Such technology is used in the final stage of chipmaking, and is generally lower-tech, and thus draws less attention than the more cutting-edge front-end chip fabrication stage.

The growing importance of back-end work was reflected in the 2025 financial results from semiconductor and electronics equipment maker ASMPT Ltd. (0522.HK), demonstrating that AI demand is lifting the entire chip-making food chain. The company’s 2025 revenue from continuing operations reached HK$13.74 billion ($1.76 billion), up 10% year-on-year. New order bookings totaled HK$14.48 billion, up by an even larger 21.7%, signaling a demand recovery. A HK$1.1 billion gain from the sale of its stake in a joint venture contributed to a full-year profit of HK$1.08 billion, up 272.7% year-on-year. Its adjusted profit from continuing operations totaled HK$467 million, up by a more modest 24.5%.

ASMPT’s core products cover advanced packaging equipment like die bonder applications, wire bonding, and thermo-compression bonding (TCB). TCB has become a crucial technology for recent chip packaging upgrades, enabling precise die-to-substrate bonding under high heat and pressure. It has been widely adopted for use in packaging AI chips and HBMs.

ASMPT said its TCB equipment has gained market share in HBM packaging, securing orders for machines handling 12-layer HBM4, while also participating in developing 16-layer HBM4 packaging technology. For the full year, its semiconductor solutions segment, which includes packaging gear, generated revenue of HK$7.38 billion, up 21.7% annually. The segment’s profit more than doubled, rising 115% to HK$550 million. ASMPT pointed out its advanced packaging business posted revenue of $532 million last year, up 30.2% year-on-year, with TCB-related equipment revenue soaring 146%.

Management forecast that increasing AI technology investments, coupled with rapid adoption of advanced logic chips and HBM memory, will propel the TCB market size from around $760 million in 2025 to approximately $1.6 billion by 2028, representing an average annual growth rate of about 30%.

Advanced packaging focus

Besides advanced packaging, ASMPT’s other significant business is surface mount technology (SMT) equipment. That segment’s revenue edged down 1% year-on-year to HK$6.36 billion last year, while its profit tumbled 32% to HK$400 million.

But the company is conducting a strategic review that could include the potential sale of the SMT division. CEO Robin Gerard Ng Cher Tat said that industry innovation is now concentrated on back-end semiconductor processes, where advanced packaging technologies like TCB are growing rapidly. Consequently, ASMPT aims to focus its resources on the back-end market. He revealed potential buyers have already expressed interest in the SMT business.

An SMT sale would extend ASMPT’s ongoing restructuring of recent years. Its ASMPT NEXX division, acquired from Tokyo Electron (8035.T) in 2018 for its advanced packaging deposition equipment, is now classified as a discontinued operation pending divestment. Last November, the company also sold its 49% stake in ASM Assembly Automation (AAMI), a lead frame supplier, to Shenzhen Original Advanced Compounds (603991.SH).

Those moves signal a strategic narrowing of the company’s product portfolio, concentrating its resources on back-end semiconductor equipment where it holds the strongest competitive edge.

Three ASM brothers

Notably, ASMPT shares common roots with Dutch lithography giant ASML Holding (ASML.AS; ASML.US) and Dutch semiconductor equipment firm ASM International. Dutch entrepreneur Arthur del Prado founded ASM International in 1964. As the industry’s center of gravity shifted to Asia, he established ASM Pacific Technology, which later became ASMPT, in Hong Kong in 1975, focusing on semiconductor packaging and assembly equipment. In 1984, ASM partnered with Philips (PHG.AS) to form ASM Lithography, which later became ASML.

As those businesses were spun off, ASML concentrated on lithography systems, ASMI focused on wafer fabrication equipment, and ASMPT emerged as a global leader in packaging equipment, collectively dubbed the “three ASM brothers” within the industry. This history of successful spinoffs underscores the ASM family’s aptitude for sharpening technological focus and business positioning, fostering investor optimism toward ASMPT’s current streamlining efforts.

But the road ahead for advanced packaging technology remains hotly contested. Beyond TCB, the industry is accelerating exploration of next-generation 3D solutions like hybrid bonding. While ASMPT holds an edge in TCB equipment, Dutch peer BE Semiconductor Industries (BESI.AS) is seen as a frontrunner in hybrid bonding gear. As HBM stacking layers continue to increase, the importance of packaging technology is rising swiftly, shifting the competitive landscape among equipment suppliers from a capacity to a technology race.

Riding the AI chip wave, ASMPT’s stock has surged about 90% over the past 52 weeks. Its trailing price-to-earnings (P/E) ratio stands at around 52 times, below BESI’s meteoric 118 times but above ASML’s 49 times. This shows the market has priced in high-growth expectations for AI and HBM packaging demand, though ASMPT’s valuation remains relatively conservative next to BESI’s hyper-focus on advanced packaging. Some brokerages remain bullish on advanced packaging equipment demand. Macquarie, for instance, recently raised its price target on ASMPT to HK$140 and maintained its “outperform” rating.

Growing demand for AI chips and HBM have made advanced packaging equipment a new bottleneck in the AI compute race. Related equipment makers are entering a critical competitive phase. ASMPT is steadily approaching the sprint stage of this technology contest, clearly concentrating its resources in a bid to cross the finish line first.

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