[News] ASE Reportedly Raises Advanced Packaging Quotes by More Than 20% in Latest AI-Driven Price Hike

AI-driven semiconductor demand is reportedly fueling another round of price increases across the OSAT industry. According to MoneyDJ, citing industry sources, ASE, the world’s leading outsourced semiconductor assembly and test (OSAT) provider, has raised its packaging quotes by more than 20%, driven by higher raw material costs and higher long-term investment costs.

The latest price increases cover advanced packaging technologies such as Chip-on-Wafer-on-Substrate (CoWoS) and Fan-Out Chip on Substrate (FoCoS), with major U.S. customers among those affected, the report says.

ASE declined to comment on the market speculation, the report adds.

The report indicates that ASE has become a key beneficiary of the AI-driven advanced packaging boom. With TSMC’s CoWoS capacity still supply-constrained and outsourcing continuing to increase, the company is seeing stronger demand for its on-substrate (oS) packaging and chip probing (CP) services.

Meanwhile, utilization rates across the OSAT industry remain near full capacity, with both leading and smaller providers actively expanding capacity to meet rising demand, the report notes.

AI Fuels OSAT Investment and Capacity Expansion

Commenting on the pricing strategy, ASE COO Tien Wu said the increases reflect two key factors: higher raw material costs and growing capital investment requirements, according to MoneyDJ.

Those long-term investments are being fueled by AI. According to Liberty Times, Wu said AI has become the key driver behind ASE’s capacity expansion plans. As AI adoption extends beyond data centers into physical AI applications such as automotive electronics and humanoid robots, he described the trend as a long-term structural shift and said the ASE Group is “going all out” to expand capacity.

To support future demand, Wu estimates that ASE and its subsidiary SPIL have around 15 new factory projects underway this year to prepare for demand expected from 2029 to 2030 and beyond, according to Liberty Times. ASE increased capital expenditures to US$5.3 billion in 2025 and further raised its 2026 capex to US$8.5 billion, with additional increases remaining possible.

The aggressive capacity expansion reflects a broader industry trend. As noted by Economic Daily News, competition in AI has expanded beyond leading-edge processes, making backend packaging, testing, and assembly increasingly critical to chip performance, yields, and time-to-market. As a result, major OSAT providers are accelerating investments in technologies such as 2.5D/3D packaging, chiplets, HBM integration, and panel-level packaging, further positioning the sector as a key capacity bottleneck in the AI semiconductor supply chain.

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(Photo credit: ASE)