ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications.
Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said.
“We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an investors’ conference in Taipei.
Photo: CNA
“In the second half, the disparity will improve. In 2026 and beyond, we believe that cycle will start showing less of a disparity,” Wu said. “That is why it is putting a lot of pressure on ASE to accelerate the capacity growth in Taiwan, especially in the leading-edge packaging and testing.”
All of its leading-edge capacity in Taiwan is fully utilized, ASE said.
To satisfy customer demand, ASE said it is accelerating its machine and equipment investments.
The company also plans to add US$300 million to US$400 million to its capital expenditure budget of US$2.5 billion this year, it said.
ASE still has a target to add US$1 billion to revenue this year from last year with its leading-edge packaging and testing services.
Due to capacity constraints, the company did not increase its revenue growth forecast, it said.
ASE expects the revenue uptrend to carry into next year and beyond, driven by leading-edge solutions and a broad-based semiconductor demand related to AI proliferation, Wu said.
Gross margin next year is also expected to return to the firm’s “structural margin range,” which is about 25 percent, on the condition that the New Taiwan dollar stabilizes at NT$29 to NT$29.2, the company said.
During the second quarter, gross margin improved to 17 percent compared with 16.8 percent in the previous quarter and 16.4 percent in the second quarter last year.
The growth momentum would carry into this quarter and the next, with “very strong” demand for high-performance computing and AI applications, ASE said.
“It has been quite busy for the ASE team [in the first half of 2025]. The second half will be busier,” Wu said.
Revenue in the third quarter is expected to expand 6 to 8 percent sequentially, ASE chief financial officer Joseph Tung (董宏思) said.
Gross margin this quarter is expected to drop 1 to 1.2 percentage points from last quarter, attributable to the stronger NT dollar, Tung said.
Net profit last quarter contracted about 3.3 percent to NT$7.52 billion (US$251.37 million) from NT$7.78 billion in the same quarter last year.
On a quarterly basis, net profit edged 1 percent lower from NT$7.55 billion.
Earnings per share fell to NT$1.74 from NT$1.8 a year earlier and NT$1.75 a quarter earlier.
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