ASE's advanced packaging quotes raised again by 20%

BlockBeats News, July 1 — Driven by strong demand for semiconductors from AI applications, along with tight capacity for advanced packaging, the utilization rates of both leading and small-to-medium-sized packaging and testing plants are nearly maintained at full-load levels. Related companies are also actively expanding capacity to meet demand. With raw material costs running higher, long-term investment costs increasing, and supply remaining tight, industry reports say ASE Technology Holding has once again adjusted its packaging quotation, with the increase reaching more than 20%. The market expects other packaging and testing companies to continue to follow suit, reflecting the current heat in the sector.

In the AI-driven wave of advanced packaging, ASE Technology Holding plays an important enabling role. Due to TSMC’s CoWoS capacity being in short supply and the share of outsourced production continuing to rise, the company’s substrate-based packaging (oS) and wafer testing (CP) are also increasing steadily. According to industry sources, this round of price increases covers advanced packaging such as CoWoS and FoCoS, and also includes top-tier US customers, with the highest increase exceeding 20%.

Regarding its pricing strategy, ASE Technology Holding operating chief Wu Tian-yu responded in a media interview after this year’s shareholders’ meeting. He said price increases are a very sensitive issue, and the increase can roughly be viewed in several parts. First, it reflects the rise in raw material prices, and such increases are necessary. Second, it reflects considerations related to an increase in investment amounts and investment costs.

Wu added that ASE’s annual capital expenditures were roughly $2 billion in the past, increased to $5.3 billion last year, and have been raised to $8.5 billion this year. In the future, it also can’t be ruled out that they may be raised again, which is also part of the cost structure. As for the pricing strategy adopted due to imbalances in market supply and demand, this portion is a matter of viewpoint, and the company hopes to leave the operating team room for consideration.