Taiwan's ASE to expand chip assembly, testing for AI demand

ASE Technology (Advanced Semiconductor Engineering, Inc) will expand its advanced integrated circuit assembly and testing capacity in Taoyuan and Kaohsiung to meet strong demand from the AI boom.

The Taiwan-based company, which is the world’s largest IC packaging and testing services provider, said its subsidiary Advanced Semiconductor Engineering will acquire a newly built factory in Taoyuan’s Zhongli District from affiliate Hung Ching Development & Construction for about NT$4.2 billion (US$134 million).

ASE will also work with Hung Ching to develop another factory in Kaohsiung’s Nanzih District.

The company’s board approved both projects on November 24, 2025.

🔗 Source: Focus Taiwan

🧠 Food for thought

Implications, context, and why it matters.

ASE’s CoWoS build targets a packaging bottleneck, yet capacity remains opaque

ASE’s K18B plant costs NT$17.6 billion and starts in Q1 2028, adding about 2,000 jobs 1. Monthly throughput and added capacity remain undisclosed, so the AI packaging backlog into 2027 still stands 2.
The site will offer CoWoS plus FOCoS (Fan-Out Chip on Substrate), copper pillar bump (a chip-to-substrate interconnect), and flip-chip ball grid array (FC BGA) 1. That lineup moves beyond 3D stacking to cover High-Performance Computing (HPC) and networking, but ASE has not shared the revenue split.
Equipment capital spending could rise up to 16% in 2025 to about $3 billion 1. The Kaohsiung build sits within a wider ramp, yet no anchor customers or contracted volumes are public, so investors cannot judge utilization risk.

Substrate makers hit glass yarn limits that open timing windows for investors

Taiwan’s leading substrate makers include Unimicron, Kinsus, and Nan Ya PCB 3. They face glass yarn shortages, the fiberglass reinforcement used in substrate laminates, with waits over five months 3. Japanese supplier Nittobo holds a near monopoly 3. Taiwan Glass, a Taiwanese glass fiber maker, may become a second source in about two years 3.
Substrate lead times stretch to about 25 weeks 3. Investors plus procurement teams can map 2025 to 2027 capacity adds at Taiwanese Ajinomoto Build-up Film (ABF) makers to time capital and supplier outreach before ASE’s 2028 ramp.
Bismaleimide triazine (BT) substrates use more glass yarn than ABF substrates 3. Track which substrate types ASE prioritizes for CoWoS versus FOCoS to flag material suppliers with the tightest demand and pricing power through 2027.