ASE Technology Holdings, the world’s largest outsourced semiconductor assembly and test provider, has raised quotes for advanced packaging services by more than 20%, according to industry sources cited by MoneyDJ.
The price increases cover Chip-on-Wafer-on-Substrate and Fan-Out Chip on Substrate technologies, with major US customers among those affected. ASE declined to comment on the market speculation.
ASE COO Tien Wu attributed the increases to higher raw material costs and growing capital investment requirements. AI has become the key driver behind ASE’s capacity expansion plans, Wu said at a recent industry event. As AI adoption extends beyond data centers into physical AI applications including automotive electronics, demand for advanced packaging continues to pressure supply.
Wu estimates that ASE and its subsidiary SPIL have roughly 15 new factory projects underway this year, preparing for demand expected from 2029 to 2030 and beyond. ASE increased capital expenditures significantly to support the buildout.
Utilization rates across the OSAT industry remain near full capacity, with both leading and smaller providers actively expanding to meet rising demand. With TSMC’s CoWoS capacity still supply-constrained and outsourcing continuing to increase, ASE is seeing stronger demand for its on-substrate advanced packaging services. Competition in AI has expanded beyond leading-edge processes, making backend packaging and testing increasingly critical to chip performance.
