July 19, 2024 /SemiMedia/ -- According to industry insiders, semiconductor outsourced packaging and testing (OSAT) manufacturers have increased capital expenditures in recent years and actively adopted high-end packaging technology and chip heterogeneous integration technology.

Sources said ISE Labs, a subsidiary of Advanced Semiconductor Engineering Holding Co., Ltd. (ASEH), plans to build a second production base in San Jose, California, U.S. The moves are part of ASEH's goal in emerging semiconductor application areas, including AI/ML, ADAS, and HPC, which require advanced packaging.

Sources said that the development of artificial intelligence (AI) has driven the market demand for high-end processors. At the same time, as the amount of data increases, cloud service providers (CSP) need greater processing power to process the data, which is also driving demand for chip testing and packaging.

Sources noted that King Yuan Electronics Co., Ltd. (KYEC), which performs GPU testing for Nvidia, allocated more than 10% of its revenue to AI.

ASE said it has stepped up efforts to expand the production of advanced packaging and does not rule out building new factories in Japan, the United States or Mexico. ASE's increased capital expenditure in 2024 indicates that demand for advanced packaging will continue to rise in 2025.