[News] ASE Again Raises 2026 CapEx to Record US$10.5B; Eyes 2x Leading-Edge Advanced Packaging Revenue by 2027
ASE, the world’s largest outsourced semiconductor assembly and test (OSAT) provider, announced at its July 30 earnings call that it has again raised its 2026 capital expenditure. According to Economic Daily News, the company increased its 2026 capital expenditure from US$8.5 billion to US$10.5 billion, an increase of US$2 billion, or about 23.5%, setting another record high. The company also said momentum in its Leading-Edge Advanced Packaging (LEAP) business continues to exceed expectations and is targeting 2027 LEAP revenue to double from this year.
Economic Daily News also notes that institutional investors estimate about US$4 billion of this year’s capital expenditure will be allocated to new fabs and infrastructure, while US$6.5 billion will be invested in production equipment to expand capacity for LEAP, mainstream packaging, and testing.
As AI chip demand continues to accelerate and leading foundries face tight advanced packaging capacity while outsourcing more production, Economic Daily News indicates that ASE plans to accelerate investments in 2.5D/3D advanced packaging, fan-out panel-level packaging (FOPLP), and advanced testing equipment to capture the next wave of opportunities driven by AI and high-performance computing (HPC). TechNews notes that the company is currently undertaking 13 new fab construction projects and eight expansion projects simultaneously.
ASE Raises LEAP Target, Sees Margin Expansion
ASE said revenue from its Leading-Edge Advanced Packaging (LEAP) services has already exceeded its previously announced US$3.5 billion target for 2026, highlighting continued strong business momentum. TechNews notes that, during its earnings call, the company raised its 2027 LEAP revenue target from US$5.5 billion to at least US$7.5 billion, representing a doubling from this year’s level.
The stronger LEAP outlook is also expected to support profitability. Economic Daily News notes that ASE expects Assembly, Testing, and Material (ATM) gross margin to improve sequentially each quarter, with fourth-quarter gross margin potentially exceeding the long-standing structural ceiling of 30%.
Looking ahead to the third quarter, ASE expects ATM revenue, in New Taiwan dollar terms, to grow 11% to 13% quarter over quarter, with gross margin of 28% to 29%. Electronic Manufacturing Services (EMS) revenue is projected to increase by about 40% sequentially, with an operating margin of 3.2% to 3.4%, according to Economic Daily News.
ASE’s Next-Generation Packaging Technologies
The company has also been advancing next-generation packaging technologies. According to Storm Media, ASE COO Tien Wu said the company’s 310 × 310 mm fully automated fan-out panel-level packaging (FOPLP) production line is expected to begin mass production in the first quarter of 2027. He added that co-packaged optics (CPO) could begin initial low-volume deployment by the end of 2026, while glass substrate technology is not expected to enter mass production within the next 12 months.
As its advanced packaging business continues to expand, Storm Media also notes that ASE’s full-process advanced packaging services currently support products across GPUs, CPUs, and ASICs. The company said it has already secured visibility into customers’ 2027 demand and capacity requirements.
Read more
- [News] ASE Reportedly Raises Advanced Packaging Quotes by More Than 20% in Latest AI-Driven Price Hike
- [News] ASE Targets FOPLP Mass Production by End-2026, Launches 15 Expansion Projects This Year Amid AI Boom
(Photo credit: ASE)
