June 25, 2026 /SemiMedia/ — ASE Technology Holding said demand from AI servers, high-performance computing and advanced packaging is driving a major expansion cycle, with the company raising its 2026 capital expenditure plan to $8.5 billion.

Speaking at the company’s annual shareholder meeting on June 24, Chief Operating Officer Tien Wu said ASE expects its advanced packaging and testing business to double in 2026 from the previous year.

Wu said growth is being driven by advanced solutions, broader AI adoption and a recovery in the semiconductor market. About 75% of new advanced packaging and testing business is expected to come from packaging, while 25% will come from testing. AI chips, data centers and high-performance computing remain the main drivers.

In 2025, ASE’s advanced packaging service revenue rose to NT$50.2 billion, or about $1.6 billion. Its share of the company’s overall packaging and testing revenue increased from 6% to 13%, showing that advanced packaging is becoming a more important growth engine.

To support demand, ASE raised its 2026 capital expenditure plan from $7 billion to $8.5 billion, with further increases still possible. The company’s annual capital spending had previously stayed around $2 billion for many years before rising to $5.3 billion in 2025.

Wu said the increase reflects higher investment in research and development, human capital, advanced capacity and smart factories. Spending is expected to remain elevated into 2027 as advanced packaging becomes more capital intensive.

ASE is also moving forward with about 15 capacity expansion projects in 2026. These include six new projects at ASE itself, seven projects at Siliconware Precision Industries, and additional capacity from acquired Innolux facilities and other sites.

Wu said the new capacity is not only for 2027 or 2028, but is being prepared for demand in 2029 and 2030. He added that even with 15 factory projects underway, capacity expansion is still not keeping up with demand.

Pricing was another focus at the shareholder meeting. Wu said future price adjustments could come from three areas: higher raw material costs, increased capital investment and supply-demand imbalance. He described raw material cost pass-through as an inevitable trend.

However, ASE also emphasized that pricing decisions must consider long-term customer relationships and customer confidence in the company’s investment plans.

In the United States, ASE currently operates two testing, R&D and production sites in California and is planning a third and fourth facility. The company is also continuing plans in Arizona tied to demand from TSMC and U.S. customers. Wu said overseas investment decisions are based on competitiveness and economic returns rather than customer requests alone.

ASE also confirmed progress in panel-level packaging. Equipment for its first large-scale automated fan-out panel-level packaging line has entered the facility, with mass production expected by the end of 2026. As AI chip sizes increase and chiplet architectures become more common, FOPLP is viewed as an important technology for higher-density and more cost-efficient packaging.

Equipment purchases also show the scale of expansion. Public filings show SPIL has purchased NT$59.42 billion worth of equipment since June, while ASE announced NT$2.46 billion in equipment purchases during the same month. Combined group equipment purchases in June have exceeded NT$62 billion.