ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications.
The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains.
The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple the floor space of ASE Malaysia to approximately 315,870m2, from 92.903m2, it said in a statement.
Photo: CNA
“Southeast Asia is increasingly becoming an important base for semiconductors, given its growing digital economy propelling demand for advanced chips and its shift toward design and chip manufacturing in the past few years,” ASE chief executive officer Tien Wu (吳田玉) said in the statement.
“With Malaysia solidifying its position as a regional semiconductor hub, we see our expanded facility playing an even greater role across the global semiconductor value chain and contributing to the country’s economic growth,” Wu said.
“ASE remains committed to being a driving force for the development of the local and regional semiconductor industry, while continuing to meet and exceed the needs and expectations of our customers,” he said.
A majority of ASE Malaysia’s capacity is used to make image sensors and power management chips for vehicles and industrial devices, while the new plant would build new image sensors for industrial or humanoid robots, the company said.
At home, ASE also plans to make new investments totaling US$200 million to build its first large-size panel-level packaging facility in Kaohsiung, Wu said.
The company is to start a pilot run of the production line in the third quarter this year, he said.
ASE’s capacity expansion at home and overseas is based on its positive demand forecast, it said.
ASE on Monday gave a favorable forecast for its business, riding on the global semiconductor industry’s growth trajectory.
By 2032, total semiconductor revenue is to reach US$1 trillion, with OSAT manufacturers playing a critical role in the global electronics supply chain, Wu said.
Chip packaging and testing service providers are to make up about 20 percent of global semiconductor revenue, an increase from 15 percent over the past decades, he said.
As chips become more advanced and complicated, more materials are required to package them, he said.
For the packaging and testing segment, ASE expects global revenue would surge to US$180 billion in 2029 from US$60 billion in 2019, he said.
Half of the market, or US$90 billion, would be for OSAT in 2029, presenting an enormous opportunity for ASE, which holds 20 to 30 percent of the world’s OSAT market, he added.
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