Taiwan's ASE forecasts its advanced chip packaging to hit $3.2b

Taiwan’s ASE Technology Holding, the world’s largest chip packaging and testing firm, expects its advanced packaging business to reach US$3.2 billion by 2026, nearly doubling in size.

The company made the projection during a conference call after reporting a fourth-quarter revenue of T$177.9 billion (US$5.6 billion), a 9.6% increase from the previous year.

Its net income for the quarter rose by 58%.

No further details on factors driving the growth forecast were provided.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

The story behind ASE’s growth is a multi-billion dollar bet on AI

ASE expects capital spending of about US$4.5 billion in 2025, around twice its 2024 outlay 1.
Over 60% of machinery capital goes to leading-edge advanced packaging (technologies that connect multiple chips and components into a single high-performance package) 1. Another 30% goes to high-end testing (advanced methods to verify chips meet performance and reliability requirements) 1.
The plan supports Leading-Edge Advanced Packaging (LEAP) services, with revenue expected to rise from US$250 million in 2023 to more than US$1.6 billion in 2025 1. This also supports the 2026 target referenced in the article 1.

Why chip packaging is no longer the boring part of the semiconductor industry

Packaging now drives much of the performance in AI chips, rather than serving as a final assembly step 2.
Spending at this scale raises the cost to compete, helping ASE pull further ahead of smaller outsourced semiconductor assembly and test (OSAT) rivals such as Amkor 3.
More of the supply chain flows through a smaller group of high-capability partners, including ASE 4. Fabless AI chip designers (companies that design chips but outsource manufacturing) depend more on those partners 4. The same partners also enable chiplet-based designs (architectures that combine multiple smaller chips into one system) used in newer AI hardware 4.