ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip tester and packager, yesterday said it would invest NT$26 billion (US$880.58 million) in a new fab in Kaohsiung to expand advanced testing and packaging capacity for 5G-related chips.
The new fab, code-named K13, is part of the company’s broader plan to build six fabs in Taiwan within five years, ASE said.
As rapidly developing 5G technology is stimulating demand for semiconductors, ASE said it is stepping up investment and adding advanced technology capacity to capture the “explosive” growth of the supply chain.
Photo: Lee Hui-chou, Taipei Times
“5G is a new technology, which is to bring explosive growth to businesses. ASE would continue to invest in advanced process technologies and hire research and development experts in Kaohsiung to capitalize on this opportunity for the semiconductor industry,” ASE chief executive officer Tien Wu (吳田玉) said in a statement.
ASE is positive about its long-term prospects in the semiconductor industry, as 5G technology, artificial intelligence, smart manufacturing and electric vehicles are likely to drive semiconductor growth over the next few years, Wu said in June.
The company plans to invest NT$8 billion in fab construction and add another NT$18 billion for further capacity expansion. The fab is scheduled to become operational in 2023.
The K13 fab is forecast to contribute US$500 million a year to revenue and create 2,800 jobs when it reaches full capacity, the Kaohsiung-based company said.
For this year, the company plans to spend US$1.6 billion on new facilities and equipment, on par with last year’s level, while its global peers scaled back capital spending by a combined US$700 million, it said.
The capacity expansion plan came as ASE runs most of its factories at, or near full capacity, thanks to strong demand, mostly from its communications segment, the company told investors on July 31.
The company said it expects revenue from its core chip assembly, testing and material business this quarter to grow 5 percent quarterly.
However, overall revenue this quarter would still face the effects of US restrictions on using US technology and software to produce chips abroad, it said.
The US restrictions are to take effect on Sept. 14.
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