Advanced packaging giant, price increase 20%.

According to industry sources, on July 1, ASE, the world's top semiconductor packaging and testing (OSAT) supplier, announced another price increase for packaging, with the highest increase exceeding 20%.

The price hike this time covers various advanced packaging technologies, including Chip-on-Wafer-on-Substrate (CoWoS) and Fan-Out Chip-on-Substrate (FoCoS).

Regarding the pricing logic, ASE COO Wu Tien-Yu responded in an interview after a shareholder meeting, stating that the price increase is mainly driven by two considerations: first, reflecting the rise in raw material costs, which is a necessary adjustment; second, covering the investment costs corresponding to the recent significant increase in capital expenditures. Public data shows that ASE's previous annual capital expenditure was about $2 billion, which increased to $5.3 billion in 2025, and further raised to $8.5 billion in 2026.

From a global market perspective, as AI computing power continues to experience explosive growth and Moore's Law approaches its physical limits, advanced packaging has become a core track for sustaining chip performance growth and supporting the AI computing boom, with the industry's strategic position being elevated unprecedentedly.

Market research firm Yole stated that the global advanced packaging market size is $54 billion in 2025 and is expected to grow to $109 billion by 2031, doubling in scale. Among them, 2.5D/3D packaging will become the main growth driver, with the core driving force coming from the rapid development of the AI industry.

Industry information shows that due to strong and sustained demand from AI for high-performance computing chips and HBM, the capacity for 2.5D/3D advanced packaging remains tight, with supply shortages expected to continue until the second half of 2027. Faced with this opportunity, semiconductor packaging and testing companies both domestically and internationally are racing to build new advanced packaging and testing capacity.

According to incomplete statistics from Shanghai Securities News reporters, A-share semiconductor packaging and testing companies such as JCET, Tongfu Microelectronics, Huatian Technology, and Yongsheng Electronics have announced expansion plans, with total investments close to 35 billion yuan (of which Huatian Technology's Nanjing Phase 2 factory investment is calculated at 10 billion yuan).

Previously, Wu Tien-Yu stated that ASE Group is building up to 15 new factories at an unprecedented expansion speed, with the first large-scale panel-level packaging production line set to begin mass production by the end of the year.

Source: Shanghai Securities News

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