ASE Technology Bets Big on AI and Advanced Packaging, Unveils Aggressive Expansion Plans

TAIPEI – ASE Technology Holding Co., Ltd. (NYSE: ASX), a global leader in semiconductor assembly and testing, has charted an ambitious multi-year growth trajectory, banking on the sustained artificial intelligence (AI) boom and a recovering chip market. The announcement came as the company released its fourth-quarter and full-year 2025 financial results, showcasing robust performance in its core advanced packaging and testing segments.

Chief Operating Officer Dr. Tien Wu painted a picture of dual engines driving growth. "The AI server cycle, primarily fueled by hyperscale data center investments, shows no signs of slowing," Wu stated during the earnings call. "Simultaneously, we are seeing a significant uptick in design activity for edge applications—robotics, automotive, smart manufacturing—which we expect to materialize into volume production over the next 24 months."

Management highlighted a strategic "cross-collaboration" model, integrating expertise across chip design, advanced packaging, power delivery, and thermal solutions to meet complex customer needs. While reaffirming Taiwan's central role in the global semiconductor ecosystem, ASE is actively executing a "Taiwan Plus One" manufacturing strategy. Expansion efforts are concentrated in Penang, Malaysia, with additional footprints in Korea and the Philippines, aimed at serving automotive and future robotics sectors.

Financial and Operational Highlights

For the full year 2025, ASE reported consolidated revenue growth of 8%, with its core Assembly, Test, and Materials (ATM) business surging 20%. A standout was the "LEAP" (Leading Edge Advanced Packaging) services revenue, which skyrocketed to TWD 1.6 billion, representing 13% of ATM revenue, up from just 6% in 2024. Testing revenue grew an impressive 36% year-over-year.

Capital expenditure remains a key focus. After spending TWD 3.4 billion on machinery in 2025, the company plans to add another $1.5 billion (approx. TWD 47.1bn) in 2026, with two-thirds targeted at leading-edge services. "Demand continues to significantly exceed supply in our advanced nodes," CFO Joseph Tung noted, guiding that 2026 leading-edge revenue is expected to at least double from 2025 levels.

Despite forecasting typical first-quarter seasonality headwinds due to the Lunar New Year, management expressed confidence in a favorable pricing environment and sequential margin improvements throughout 2026.

Analyst and Investor Commentary

Market reactions were mixed, with experts weighing in on ASE's aggressive posture:

"The numbers speak for themselves, particularly the explosive growth in LEAP and testing," said David Chen, a semiconductor analyst at Horizon Capital. "ASE is not just riding the AI wave; it's strategically positioning itself as an indispensable enabler. Their capacity expansion in Penang is a prudent hedge against geopolitical uncertainties while tapping into new regional supply chains."

"I'm deeply skeptical of this 'multi-year growth' narrative that every chip company is suddenly peddling," countered Maya Rodriguez, a portfolio manager at ClearSight Investments, her tone sharp. "The capital spending is staggering, and it feels like a bet-the-company move. What happens if the AI demand plateaus or if the broader recovery stumbles? They're building for a gold rush that might not last. The guidance seems overly optimistic, ignoring potential macroeconomic fragility."

"The operational details are encouraging," offered Arjun Mehta, an engineering consultant specializing in advanced packaging. "The shift toward more full-process service revenue is critical. It moves ASE further up the value chain, locking in customers with more comprehensive solutions. Their cross-collaboration model is exactly what's needed to solve the next generation of power and thermal challenges in AI chips."

"From a pure execution standpoint, ASE has delivered," added Sarah Lin, an independent equity researcher. "Maintaining near-full capacity in Taiwan while successfully ramping overseas operations is no small feat. The margin resilience in the face of currency headwinds and rising costs demonstrates strong operational management. The 2026 outlook, while ambitious, appears grounded in visible demand and contracted expansions."