The packaging house used to be the last stop on the chip supply chain, quoting a price after the wafer was finished. ASE Technology’s third quarter shows how far that has moved.
A margin ceiling that moved
Consolidated revenue hit a record NT$244.2B, up 45 percent year on year. The assembly and test segment, which ASE calls ATM, grew 51 percent to NT$151.5B and its gross margin reached 30.6 percent, a level management had described as a structural ceiling. Basic earnings per share jumped 145 percent to NT$6.13.
Chief financial officer Joseph Tung told analysts on the Oct. 29 call that the ceiling has become the base, with sequential improvement expected to continue. He described pricing as very friendly in a market where supply trails demand.
The advanced packaging number keeps being revised
ASE raised its 2026 forecast for leading-edge advanced packaging to more than $4B from $3.7B and expects that business to double next year. Full-process CoWoS contributed $300M in 2026 and is targeted above $1B in 2027.
Co-packaged optics, where optical engines sit in the same package as the switch or accelerator silicon, entered mass production in the fourth quarter and is projected to bring in over $500M next year. That is a new line item for an OSAT, and it puts ASE in the same conversation as the foundries building similar prototypes.
Capex was raised to $11.5B for the year from $10.5B, with 2027 higher still and partly covered by customer prepayments. Twenty-two building projects are running across Taiwan, more than half feeding revenue between now and the end of next year. Tung said space itself is the constraint, and that ASE is hunting for existing plants to buy.
