AI boom and cost pressures: ASE rumored to raise advanced packaging prices by another 20%

As AI applications drive semiconductor demand strongly and advanced packaging capacity grows tight, both leading players and small to midsize packaging and test houses are now running at nearly full utilization, and the companies involved are aggressively expanding capacity in response. With rising raw material costs, higher long term investment costs, and supply shortages all converging, word has spread across the industry that ASE Holdings (3711) has once again adjusted its packaging quotes, with the increase exceeding 20 percent. The market expects other packaging and test houses to follow with successive hikes that reflect the current overheated conditions. (ASE declined to comment on the market rumors.)
In the wave of advanced packaging led by AI, ASE Holdings plays an important driving role. As TSMC (2330) struggles to keep its CoWoS capacity up with demand and the share of outsourcing keeps climbing, the on substrate packaging (oS) and wafer test (CP) volumes that ASE takes on continue to grow. According to industry sources, this round of price increases spans advanced packaging such as CoWoS and FoCoS, includes a top tier US customer, and reaches a maximum increase of more than 20 percent.
On the pricing strategy, ASE Holdings Chief Operating Officer Tien Wu responded in a media interview right after this year's (2027) shareholders meeting that price increases are a very sensitive matter and can broadly be viewed across a few dimensions. The first reflects rising raw material prices, and increases of this kind have their own necessity. The second reflects growing investment amounts and considerations around investment costs.
Wu added that ASE's capital expenditure was previously around 2 billion dollars a year, rose to 5.3 billion dollars last year (2025), and has been raised to 8.5 billion dollars this year, with further increases not ruled out going forward. This too is part of the cost structure. As for taking a pricing stance in response to market supply and demand imbalances, he said views differ from person to person, and the company would prefer to leave room for the management team's own judgment.
Wu also stressed that running a business cannot be about the short term alone but must look to the long term. Data centers are doing very well right now, but the company must also think about investment in the next wave of applications such as the AI real economy, automotive electronics, and humanoids. Price adjustments therefore have to balance the future together with close cooperation with customers, customer trust, and long term investment confidence.
$ASX