Packaging Operations³

• Gross margin for our packaging operations during the quarter was 20.6%, down by 0.1 percentage points from 1Q17.
• Capital expenditures for our packaging operations amounted to US$161 million for the quarter, of which US$78 million were used in purchases of wafer bumping and flip chip packaging equipment, and US$83 million were used in purchase of common equipment, SiP equipment and wirebond packaging equipment.

Testing Operations

• Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,673 million during the quarter, down from NT$1,759 million in 1Q17.
• Gross margin for our testing operations amounted to 34.2% during the quarter, up by 0.8 percentage points from 1Q17.
• Capital expenditures for our testing operations amounted to US$47 million during the quarter.

EMS Operations

• Gross margin for our EMS operations amounted to 11.1% during the quarter, up by 0.5 percentage points from 1Q17.
• Capital expenditures for our EMS operations amounted to US$4 million during the quarter.

Substrate Operations

• PBGA substrate manufactured by ASE amounted to NT$2,144 million for the quarter, up by NT$54 million, or by 3% from 1Q17. Of the total output of NT$2,144 million, NT$928 million was from sales to external customers.
• Gross margin for substrate operations was 14.4% for the quarter, up by 2.4 percentage points from 1Q17.
• In 2Q17, our internal substrate manufacturing operations supplied 27% (by value) of our total substrate requirements.

Customers

IC ATM CONSOLIDATED BASIS

• Our five largest customers together accounted for approximately 32% of our total net revenues in 2Q17, compared to 31% in 1Q17. No customer accounted for more than 10% of our total net revenues in 2Q17.
• Our top 10 customers contributed 47% of our total net revenues for the quarter and in 1Q17.
• Our customers that are integrated device manufacturers, or IDMs, accounted for 36% of our total net revenues for the quarter and in 1Q17.

EMS BASIS

• Our five largest customers together accounted for approximately 79% of our total net revenues in 2Q17, compared to 81% in 1Q17. One customer accounted for more than 10% of our total net revenues in 2Q17.
• Our top 10 customers contributed 89% of our total net revenues during the quarter, compared to 90% in 1Q17.

OUTLOOK

Based on our current business outlook and exchange rate assumptions, management projects overall performance for the third quarter of 2017 to be as follows:

• IC ATM 3Q17 business should be a notch or two lower than 3Q16 levels;
• IC ATM 3Q17 margin should be similar to 2Q16 levels;
• EMS 3Q17 business should be similar to the average of 3Q16 and 4Q16 levels;
• EMS 3Q17 gross margin should be similar to the average of 1Q16 and 2Q16 levels.

About ASE, Inc.

ASE is among the world's leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services.  For more information, please visit our website at http://www.aseglobal.com.

Safe Harbor Notice

This press release contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended.  Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release.  The words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release.  Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; fluctuations in foreign currency exchange rates; and other factors.  For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2016 Annual Report on Form 20-F filed on April 21, 2017.

Supplemental Financial Information