January 9, 2026 /SemiMedia/ — Morgan Stanley said on Jan. 8 that ASE Technology Holding, the world’s largest outsourced semiconductor assembly and test (OSAT) provider, is likely to raise semiconductor packaging and testing prices from late 2026, as stronger-than-expected AI chip demand tightens global OSAT capacity.

AI chip demand tightens advanced packaging capacity

The bank estimates price increases of 5% to 20%, above earlier market expectations of 5% to 10%, citing rising consumption of advanced packaging resources by AI GPUs and high-performance computing chips.

Unlike traditional consumer semiconductors, AI-related chips require more complex packaging and higher testing reliability, accelerating capacity usage. ASE’s overall utilization rate reached nearly 90% in the third quarter of 2025, leaving limited room for incremental demand across the industry.

Cost pressure and utilization rates support OSAT price hikes

Rising costs are also contributing to the pricing adjustment. Higher substrate, precious metal and electricity costs have pressured margins, prompting ASE to pass incremental costs downstream while prioritizing higher-margin AI-related orders.

Morgan Stanley said the move reflects a structural shift in the backend semiconductor market, where sustained AI demand is restoring pricing power to leading OSAT providers.