ASE Technology Holding Inc (日月光投控), the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy.
Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security.
ASE subsidiary Siliconware Precision Industries Co (SPIL, 矽品精密) is participating in Nvidia Corp’s US$500 billion artificial intelligence (AI) infrastructure in Arizona over the next four years, along with other supply chain partners.
Photo: CNA
Nvidia unveiled the investment project in April and SPIL is one of the suppliers of chip-on-wafer-on-substrate (CoWoS) packaging technology for the US company’s AI chips.
Regarding this project, ASE “will proactively plan” capacity expansions, ASE chief operating officer Tien Wu (吳田玉) told a media briefing.
“Other than that, we have also received more requests from customers to build ‘made-in-America’ capacity. We are carefully evaluating this,” Wu said.
Wu said that the US tariff policy did carry weight with ASE’s global manufacturing deployments.
The company is closely monitoring how the tariff landscape is evolving before making any adjustments, he said.
Taiwan is hoping to reduce the 32 percent “reciprocal” tariff proposed by the US before the 90-day reprieve ends early next month.
“Made in America” is viable, but it requires multiple factors to achieve it, including customers’ support and the readiness of employees, Wu said, adding that it would be challenging to duplicate manufacturing technologies in an unfamiliar country.
ASE said it is cautiously optimistic about business prospects for the second half of the year, given rising demand for edge AI devices, application-specific ICs (ASIC) and high-performance computing applications, such as servers and data centers.
The company is sticking to its projected capital spending of US$2.5 billion for this year, up about 32 percent from US$1.9 billion last year.
A big chunk of the budget is earmarked for advanced chip packaging and testing capacity expansions, Wu said.
“It is our feeling that the demand for advanced packaging [technologies] is still in its infancy, as this AI [demand] is just the first wave, which will be followed by a second and third wave,” Wu said.
ASE is confident about AI demand over the next decade, while hardware supply has become the bottleneck now, he said, adding that demand for AI chips is outpacing supply.
To catch this business opportunity, ASE will continue investing in advanced packaging technologies next year, he said.
This year, advanced packaging and testing services revenue would grow at an annual pace of 10 percent, ASE said in its annual report.
ASE shareholders yesterday approved the nomination of Danielle Chang (張淡堯) as a new board director in the by-election, filling the vacancy left by Rutherford Chang (張能傑). Danielle Chang is a daughter of ASE chairman Jason Chang (張虔生).
Shareholders also gave the go-ahead to the distribution of a cash dividend of NT$5.3 per share. That represented a payout ratio of 70.5 percent.
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