<div id="readability-page-1"><div>//php echo do_shortcode('[responsivevoice_button voice=&#34;US English Male&#34; buttontext=&#34;Listen to Post&#34;]') ?&gt; ASE, the world’s largest chip assembler, expects its advanced packaging sales to double this year to $3.2 billion on strong demand from AI chipmakers, such as Nvidia. ASE said it will increase its 2026 capital expenditure by an undisclosed amount from the $5.5 billion it spent last year.The Taiwanese company is buying cleanrooms and building its own to expand into advanced packaging. Top foundry TSMC is likely to transfer more of the business to ASE as both companies prepare to boost production for AI customers like Nvidia, AMD, and Amazon, according to JPMorgan managing director Gokul Hariharan.“In 2026, we believe that the primary driver for growth is likely to be on-substrate outsourcing from TSMC for Nvidia GPUs, with a meaningful step up likely in second-half 2026 as [Nvidia] Rubin GPUs start ramping,” Hariharan said in a Feb. 6 report obtained by EE Times. “Full-process packaging should start in second-half 2026, in our view, with AMD Venice CPUs being the first products, and could reach $300 million to $400 million in revenues in 2026, with further room for growth in 2027, as multiple non-GPU products from AMD are moving to ASE’s 2.5D process. In 2027, we also expect to see some [Nvidia] Vera CPU outsourcing coming to ASE, while early discussions indicate potential share gains in [Amazon] Trainium3 ASICs.” TSMC has struggled to keep up with AI chip demand even as it has budgeted a record $52 billion to $56 billion in capital expenditure this year. TSMC, which dominates advanced packaging for customers like Nvidia and AMD, is likely to transfer more of the business to outsourced assembly-and-test companies (OSATs), according to chip toolmaker Lam Research. ASE is expanding into the business this year. “There’s a lot of technology collaboration with our partners upstream and downstream,” ASE CEO Tien Wu told the audience at the company’s quarterly earnings event on Feb. 5. “We are building factories from scratch. We’re also acquiring existing factories from our partners, even with cleanrooms already installed.” ASE will probably be the main beneficiary of TSMC’s transfer of advanced packaging business to OSATs.“Given strong demand and a 15% to 20% gap still in supply demand for advanced packaging at TSMC, we believe that ASE is likely to be the primary beneficiary of outsourcing in the next two to three years,” Hariharan said. “We believe that TSMC would be increasingly willing to give up more of the lower-end CoWoS processes to ASE in 2027–2028, as it readies to migrate to 3D SoICs, as well as bringing up the CoPoS process in 2028 for a key customer, Nvidia.”Similar to TSMC’s CoWoS advanced packaging that the company has been providing for years, CoPoS places logic chips and HBM stacks side by side on an interposer, using a panel-level substrate instead of a 300-mm wafer.<h3>Paradigm shift</h3>ASE and other companies in the Taiwan ecosystem, such as Global Unichip, are expanding into technologies for AI data centers, including co-packaged optics (CPO), which Wu called a “paradigm shift.”“There are different requirements between the scale-up, scale-out, chip-to-chip level, chip-to-package level, for the package-to-package level, they’re all different,” Wu said in response to a question from EE Times. “Our job is to develop the toolboxes for the designers so they have the freedom to choose.”ASE will be among the first companies to start production of panel-level packaging, which will replace the round silicon wafers that the chip industry has used for decades. The company will open production at a “lights out,” fully automated, 310 × 310-mm panel facility by the end of this year, Wu said. The company may also move to a 620 × 620-mm format depending on customer demand, he added. Larger panels would allow more die per substrate, lowering packaging cost per chip. The panels are designed for AI processors requiring integration of multiple dies and HBM.“We are responsible to provide more packaging-level toolboxes, including panels, including CPO, and including next-generation power delivery voltage-regulator modules,” Wu said.<h3>Expanding in Asia</h3>ASE aims to expand its production capacity primarily in Asia. The move underscores the challenges the U.S. government faces in trying to shift a larger share of Taiwan’s semiconductor industry to the U.S.“ASE is building footprint primarily in Penang [Malaysia],” Wu said. “Mainly for automotive and in the future, potentially, robotics, to capture customers and wafers that are not produced in Taiwan. We’re also building footprint in [South] Korea and the Philippines. Penang will be the main sector that we’ll be ramping up. The Penang cluster has been well-established, second to Taiwan.”ASE hasn’t committed to following TSMC to the U.S. In March last year, TSMC added $100 billion to its investment in the U.S. to start domestic production of AI chips, a move partly aimed at dodging tariffs that U.S. President Donald Trump was threatening to levy on imports from the Taiwanese company. TSMC said the investment would include two advanced-packaging facilities.Taiwan’s top tariff negotiator on Feb. 8 said it would be impossible to move 40% of Taiwan’s chipmaking capacity to the U.S., responding to a demand from U.S. Commerce Secretary Howard Lutnick in January.Taiwan’s Vice Premier Cheng Li-chiun said in an interview with the Taiwanese television channel CTS that she had informed U.S. officials that Taiwan’s semiconductor ecosystem could not be relocated.Taiwan’s near-90% share of advanced chip production is the result of an ecosystem developed over several decades that could not be moved to the U.S., Cheng specified.“There’s no question about the leadership in semiconductor manufacturing in Taiwan this year, as well as a few years down the road,” Wu said. “I don’t think there’s any question about our position—Taiwan’s as well ASE’s. We understand that what is driving the business in AI is mainly system optimization, which includes chip-level optimization, packaging-level optimization, as well as power delivery, silicon photonics, manufacturing efficiency. I would like to remind you [that] Taiwan has manufacturing leadership in all sectors.”ASE declined to estimate how much it will increase capex this year because it’s a moving target.“Half of me is saying, ‘Spend more,’” Wu said. “Half of me is saying, ‘Are you sure we’re doing the right thing?’ We have 64,000 people in Taiwan and 100,000 worldwide. You want to stretch that, but you don’t want to stretch it to the point that we all go to the hospital.” </div></div>

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ASE, the largest chip assembler, anticipates its advanced packaging sales will double to $3.2 billion this year, driven by demand from AI chipmakers like Nvidia. The company plans to increase its 2026 capital expenditure and expand its production capacity, including building new factories and acquiring existing ones. ASE is expected to benefit from TSMC's outsourcing of advanced packaging, with significant growth projected in 2026 and beyond as it prepares for new AI products. ASE is also expanding its operations in Asia, particularly in Malaysia, Korea, and the Philippines.

Chip Assembler ASE Sees Advanced Packaging Sales Doubling