Chip tester King Yuan Electronics Co (京元電子), which counts Nvidia Corp as a key customer, yesterday said it is mulling whether to build a new production line in the US in response to strong testing demand for chips used in artificial intelligence (AI) and high-performance computing (HPC).
The remarks came after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) unveiled a new US$100 billion US expansion plan, including two advanced packaging fabs, to address demand from its US clients and potential tariffs.
“That [US expansion] needs to correspond with the development of market conditions. We will be preparing for that,” King Yuan chairman Lee Chin-kung (李金恭) told reporters on the sidelines of a media gathering in Hsinchu.
Photo: CNA
King Yuan said that US President Donald Trump’s plan to hike tariffs poses great uncertainty to the whole semiconductor industry.
It is hard to gauge the impact as of the present, it said.
King Yuan is one of the key back-end assembly partners to TSMC for its advanced packaging, or chip-on-wafer-on-substrate, technology, which is primarily adopted for AI chips. The firm provides final test and burn-in test services for TSMC and Nvidia.
Apart from the US, King Yuan has also included Southeast Asian nations on its shortlist as the region has risen to be a major global semiconductor hub.
King Yuan expects AI-related revenue to account for more than 20 percent of its total revenue this year, Lee said.
That would be a spike from a single-digit percentage revenue contribution last year.
The company has a positive revenue outlook for this year and expects demand for advanced technologies to outpace mature technologies, King Yuan president Gauss Chang (張高薰) said.
A majority of the company’s customers in the consumer electronics segment have reduced their inventory to a healthy level, which would help drive growth, while customers in the automotive segment are still digesting excessive stockpiles, he said.
“Based on the normal seasonality, the first quarter is usually a low season,” Chang said. “The second quarter will be a better period than the first, followed by a strong second half fueled by AI and HPC demand.”
To cope with the dramatic increases in AI-related demand from customers, King Yuan has rented a factory in Miaoli County’s Toufen City (頭份) and is building a clean room and preparing for new equipment to move in, Chang said.
The firm is also building a new fab in Miaoli County’s Tongluo Township (銅鑼), he said.
King Yuan has budgeted for record-high capital expenditure of NT$23.3 billion (US$709.2 million) this year, an increase of 68 percent from NT$13.8 billion last year.
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