ChipMOS Technologies Inc. (NASDAQ:IMOS) stock jumped more than 12% Tuesday after the semiconductor company reported stronger second-quarter 2026 results, with revenue reaching its highest quarterly level since 2014.

Revenue rose 28.7% year over year and 6.5% sequentially to 7.38 billion New Taiwan dollars ($231.8 million).

ChipMOS Margins Improve As Profit Rebounds

Gross margin expanded to 18%, up from 13.8% in the first quarter and 6.6% a year earlier.

Net profit attributable to equity holders rose 76.6% sequentially to 891.7 million New Taiwan dollars ($28 million), from 504.9 million New Taiwan dollars ($15.9 million).

ChipMOS reported earnings of 80 cents per basic American depositary share, compared with a loss of 47 cents per ADS a year earlier.

Cash Flow Strengthens

ChipMOS generated net free cash inflow of 735.9 million New Taiwan dollars ($23.1 million) during the first half of 2026.

The company ended the period with 12.55 billion New Taiwan dollars ($394.1 million) in cash and cash equivalents.

AI Demand Outpaces ChipMOS Capacity

Chairman and President S.J. Cheng said demand continued to exceed capacity during the quarter. He said stronger pricing, product mix and utilization helped the company turn rising demand into improved operating leverage.

Cheng said customer visibility remains strong, while AI-driven demand continues to outpace available supply.

Memory products gained momentum as customers restocked and assembly and testing utilization improved. ChipMOS expects DRAM growth to accelerate in the third quarter, supported by strong DDR4 demand and the ramp-up of DDR5 products.

Flash momentum remains steady on seasonal stocking despite some customer inventory adjustments, although management expects it to trail DRAM.

Meanwhile, seasonal OLED demand, automotive panels and rush orders are expected to support improvement in the display driver integrated circuit business during the second half.

ChipMOS Expands Capacity For AI, Memory Demand

ChipMOS plans to expand memory assembly and testing bottleneck stations while investing in automation and AI across its operations.

The company also plans to add testing capacity for longer-term opportunities in silicon photonics and AI-related application-specific integrated circuits.

ChipMOS acquired a new facility in Tainan Science Park to support memory customers’ capacity needs beginning in 2027. The facility will also support strategic expansion for mixed-signal customers and new product projects.

Cheng said ChipMOS selectively raised memory outsourced semiconductor assembly and test pricing during the second quarter to offset higher material costs. The company also reached agreements with customers to pass through rising costs in memory and driver IC packaging and testing.

During the earnings call, ChipMOS said it is stepping up investment to capture rising demand from memory and AI-related markets.

The company expects 2026 capital spending to exceed 25% of revenue, above its usual goal of about 20%, as it expands memory assembly and testing capacity and invests in AI-related ASICs and silicon photonics.

ChipMOS expects capital spending to remain above 25% of revenue in 2027 as it continues investing for growth.

IMOS Stock Jumps

IMOS Price Action: ChipMOS shares were up 12.40% at $56.00 at the time of publication on Tuesday, according to Benzinga Pro data.

Image via Shutterstock

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