July 31, 2026 / SemiMedia / — ASE Technology Holding has raised its 2026 capital expenditure budget from $8.5 billion to approximately $10.5 billion as demand for advanced packaging and semiconductor testing continues to exceed expectations.

Of the additional $2 billion, around $1 billion will be allocated to manufacturing facilities and another $1 billion to production equipment.

Most of the new investment will support leading-edge advanced packaging and testing services under ASE’s LEAP business. The company will also expand mainstream packaging and testing capacity to meet broader semiconductor demand.

ASE said it is constructing 13 greenfield sites during 2026 and repurposing another eight existing facilities. The expansion will support growing demand for AI processors, high-performance computing hardware and other semiconductor products requiring complex packaging and testing.

Revenue from LEAP services is already tracking ahead of ASE’s previous 2026 target of more than $3.5 billion. Management said full-year revenue could exceed the target by several hundred million dollars.

ASE aims to double LEAP revenue again in 2027 as additional buildings, cleanrooms and manufacturing equipment enter operation.

The company said it has strong visibility into customer demand, product content and the capacity required for 2027. The main uncertainty is whether construction, equipment installation, production yields and volume ramp-up can be completed according to schedule.

Growth is expected to come from both advanced packaging and testing. ASE previously expected wafer testing to expand faster than packaging, but demand for full-process services, additional manufacturing steps and new packaging products has also accelerated.

ASE therefore expects packaging and testing to contribute at broadly similar growth rates during 2027.

Demand is also improving outside the LEAP segment. ASE reported stronger activity across industrial, power, connectivity and memory-related semiconductor products as AI infrastructure expands demand beyond computing processors.

The company raised its 2026 growth forecast for mainstream packaging and testing revenue from 13% to 30%. Including LEAP services, total assembly, testing and materials revenue is expected to increase by approximately 35% this year.

ASE’s ATM revenue reached NT$126.15 billion in the second quarter, increasing 36.3% from a year earlier and 12.2% sequentially.

The segment’s gross margin improved to 27.3% from 26% in the first quarter, while operating margin increased to 15.7% from 14.1%.

Consolidated second-quarter revenue reached NT$191.06 billion, representing year-over-year growth of 27%. Net income attributable to shareholders of the parent increased 180% to NT$21.07 billion.

For the third quarter, ASE expects ATM revenue in New Taiwan dollar terms to increase by 11% to 13% sequentially. ATM gross margin is forecast at between 28% and 29%.

Revenue from electronic manufacturing services is expected to increase by approximately 40% from the second quarter, with an operating margin of 3.2% to 3.4%.

Based on an exchange-rate assumption of NT$31.9 to the U.S. dollar, consolidated third-quarter revenue is expected to increase by 21% to 22% sequentially.

Consolidated gross margin is projected at 20.5% to 21.5%, while operating margin is expected to reach 11.5% to 12.5%.

ASE expects the increasing contribution from higher-margin LEAP and testing services, combined with improving utilization and manufacturing efficiency, to lift ATM profitability during the second half.