Hsinchu, August 12, 2026, 06:21 EDT
- ChipMOS reported its strongest quarterly revenue since 2014.
- Gross margin increased by 11.4 percentage points compared to the same period last year.
- The ADS rose 11.7%, with trading volume reaching 1.9 times its three-month average.
Shares of ChipMOS TECHNOLOGIES INC. NASDAQ:IMOS surged 11.7% on Tuesday following the chip testing company’s announcement of its highest quarterly revenue since 2014 and a significant rebound in margins. Second-quarter revenue climbed to NT$7.38 billion, a 28.7% year-on-year increase.
Profit conversion delivered a clearer signal. Gross margin increased to 18.0%, up from 6.6% the previous year, and operating margin improved to 12.8% from 0.4%.
The 11.4-point recovery in gross margin indicates that pricing and utilization are aligning with demand. However, the upcoming challenge remains cash flow. Management currently anticipates that capital spending in 2026 will be more than 25% of revenue.
| Q2 metric | Q2 2026 | Q1 2026 | Q2 2025 |
|---|---|---|---|
| Revenue | NT$7.38bn | NT$6.94bn | NT$5.74bn |
| Gross margin | 18.0% | 13.8% | 6.6% |
| Operating margin | 12.8% | 7.5% | 0.4% |
| ADS earnings | US$0.80 | US$0.45 | US$(0.47) |
The formal announcement details revenue, gross margin, and earnings per ADS. On Tuesday’s call, finance chief Silvia Su provided operating-margin figures. Net profit attributable to shareholders stood at NT$891.7 million, representing a 12.1% net margin.
Chairman and President S.J. Cheng said, “Q2 revenue reached its highest level since 2014, as demand continues to exceed capacity.” He added, “Better pricing, product mix and utilization are now translating demand strength into meaningful operating leverage.”
Memory accounted for 51% of total revenue, increasing by over 46% compared to a year ago. DRAM sales surged more than 70%, driven by demand for DDR4 and the scaling of DDR5.
| Operating measure | Q2 2026 | Investor read-through |
|---|---|---|
| Overall utilization | 72% | Capacity remains, with rising demand for crucial lines |
| Assembly utilization | 78% | Process with the highest rate reported |
| Test utilization | 74% | Memory and mixed-signal activity keeps prices up |
| DDIC utilization | 69% | Lifted by stronger smartphone and TV sales |
| Bumping utilization | 65% | Lowest reported rate; could deliver upside or pose risk |
Cheng noted that available supply still lags behind ongoing AI-related demand. Automotive and industrial product sales climbed by over 45% year-on-year, accounting for 28.9% of total sales. The data on utilization and product mix comes from the company’s earnings-call transcript.
Prices are showing more strength. Cheng stated that ChipMOS has obtained increased pricing for services connected to limited equipment and resources. “We will pass these price increases on to our customers,” he said.
The market responded positively to the leverage, with the ADS ending at US$59.28 on August 11, a gain of US$6.23. Trading volume totaled 227,508 shares, 1.88 times higher than the three-month average.
| Market measure | August 11 reading | Comparison |
|---|---|---|
| Closing price | US$59.28 | Session increase of 11.7% |
| Trading volume | 227,508 | 1.88 times the three-month average |
| Versus 50-day average | -2.7% | Remains beneath the short-term trend |
| Versus 200-day average | +37.8% | Significantly exceeds the long-term trend |
| Market value / annualized Q2 sales | 2.22× | Calculated using a US$2.06bn market value and US$231.8m Q2 sales |
The stock is still trading 24.3% under its 52-week peak. This difference is significant since investors have factored in most of the rebound from the 52-week low. The 2.22-times sales ratio is based on one quarter annualized and does not represent a company projection.
Analyst coverage in the US public market is limited, reducing the reliability of consensus targets and placing greater emphasis on company guidance.
| Analyst dataset | Coverage shown | Recommendation | Published target |
|---|---|---|---|
| MarketBeat, IMOS ADS | 1 analyst | Hold | Not available |
| StockAnalysis, IMOS ADS | No consensus reported | Not available | Not available |
The recommendation table corresponds to public US ADS data available at the time of publication. MarketBeat listed one Hold recommendation, whereas StockAnalysis did not provide a US analyst consensus. Both sources lacked a valid target price.
Spending is now the key variable. Capital expenditure in the second quarter totaled NT$2.38 billion, representing 32.2% of revenue. Free cash flow for the first half declined 55.9% to NT$735.9 million, but cash stood at NT$12.55 billion.
ChipMOS is set to build a new facility in Tainan Science Park to expand its memory testing and mixed-signal operations. Management anticipates capital intensity in 2027 could surpass 25% with additional capacity for DRAM, NAND, and logic production.
Risks: A downturn in memory prices, weaker end demand, or postponed customer qualifications may reduce utilization. High capital expenditures might also result in free cash flow staying below profit recovery.
To finance that expansion, investors are now counting on demand to stay robust in the second half. The main comparison highlights the point: operating margin stands at 12.8%, while capital expenditure exceeds a quarter of yearly sales.
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