ASE Technology Holding Co (日月光投控), the world’s biggest chip assembly and testing manufacturing (ATM) service provider, yesterday said revenue from its leading-edge packaging and testing services would more than double to US$1.6 billion this year, thanks to accelerating adoption of artificial intelligence (AI) technology spreading to edge devices.
That compared with US$600 million last year and US$250 million in 2023 from advanced packaging and testing services, the Kaohsiung-based company told an investors’ conference.
ASE said that non-AI applications this year have adopted advanced packaging technology similar to the chip-on-wafer-on-substrate (CoWoS) technology.
Photo: Grace Hung, Taipei Times
CoWoS is primarily used in packaging Nvidia Corp’s AI chips made by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
This year, ASE’s ATM revenue would extend the robust growth of last year, the company said.
The global semiconductor market, excluding the memory chip market, is forecast to grow about 13 percent annually this year, International Data Corp said.
ASE said the forecast did not include the “potential upside” from increased demand from Chinese customers as a result of new semiconductor restrictions imposed by the US Bureau of Industry and Security (BIS).
“We are trying to understand the detailed execution, the rules and also the capacity requirement,” ASE chief operating officer Tien Wu (吳田玉) said.
“We do understand this is an upside and we are aggressively working with our foundry partner and customers to try to fulfill that demand,” Tien said.
Based on the BIS regulations, TSMC is banned from shipping 14-nanometer or 16-nanometer chips to China, unless the chips are packaged and tested by entities approved by the bureau.
Overall, ASE believes this year would be “decent” for the company.
“We will continue to accelerate in preparation for the AI-led supercycle, which we believe started in 2024 and we will see the momentum in 2025, 2026 and beyond,” Wu said.
To cope with growing demand, ASE plans to spend US$2 billion on new manufacturing equipment and facilities this year in Taiwan and overseas, up from US$1.9 billion last year.
Despite the increased capital expenditure, ASE would still improve its gross margin, chief financial officer Joseph Tung (董宏思) said.
The gross margin of its ATM business this year would rise to 24 to 30 percent from 22.5 percent last year, Tung said.
Further improvement is expected next year, he added.
ASE’s net profit last year increased 2 percent to NT$32.48 billion (US$990.18 million), compared with NT$31.73 billion in 2023. Earnings per share rose to NT$7.52 from NT$7.39 a year earlier.
ASE said that it expects ATM revenue this quarter to decline by a single-digit percent sequentially from NT$88.38 billion, while gross margin is to drop by 1 percentage point from 23.3 percent last quarter.
It expects high-performance computing to show the strongest growth momentum this quarter, Tung said.
The communications segment is picking up faster than other segments, while the automotive segment is in the process of recovery, he said.
On the electronic manufacturing service (EMS) side, revenue is to drop slightly year-on-year from NT$59.33 billion a year earlier, ASE said.
Operating profit margin is projected to slide 0.3 percentage points from 2.8 percent the previous year, it added.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective
RSS