Chip Giant ASE Forecasts Advanced Packaging Business to Double, Hitting $3.2 Billion by 2026
TAIPEI, Feb 5 (Reuters) – In a bullish forecast underscoring the semiconductor industry's strategic pivot, ASE Technology Holding Co. announced Thursday that it expects its advanced packaging business to double in scale, reaching approximately $3.2 billion by 2026. The projection comes as chipmakers race to develop more powerful and efficient processors for artificial intelligence, data centers, and next-generation electronics.
The Taiwanese firm, the world's largest outsourced chip packaging and testing service provider, revealed its outlook during an earnings conference call. ASE reported robust fourth-quarter results, with revenue climbing 9.6% year-on-year to T$177.9 billion ($5.62 billion). Net income saw a particularly sharp rise of 58%, signaling strong operational performance and favorable market conditions.
Advanced packaging technologies, which involve integrating multiple chips into a single package to enhance performance and reduce power consumption, have become a critical battleground. With traditional chip scaling becoming more difficult and expensive, companies like ASE are essential partners for giants such as NVIDIA, AMD, and Apple. This segment is a key growth driver as the industry moves beyond Moore's Law.
"This isn't just growth; it's a fundamental shift in how semiconductors are built," said Michael Chen, a semiconductor analyst at Horizon Insights. "ASE's forecast confirms that advanced packaging is now a multi-billion-dollar pillar of the supply chain, crucial for meeting the insatiable compute demands of the AI era."
However, the optimistic outlook is tempered by geopolitical considerations. Taiwan's dominance in the chip supply chain remains a point of global tension. Sarah Jenkins, a tech policy researcher, offered a more cautious take: "While the numbers are impressive, this growth is tethered to a volatile region. It underscores the urgent need for other regions to build credible advanced packaging capacity to de-risk the global ecosystem."
A more pointed reaction came from David Miller, a portfolio manager focused on tech. "A 58% jump in net income? That's staggering. It shows the absolute pricing power and lack of alternatives in this market," he said. "End-users are paying a premium, and companies like ASE are printing money. It's great for shareholders, but it fuels inflation in tech and concentrates far too much critical infrastructure in one company—and one island."
ASE's confidence reflects broader industry trends. Market research firm Yole Development has previously estimated the advanced packaging market will grow at a compound annual rate of over 10% this decade. ASE's specific forecast suggests it is positioned to capture a significant share of that expansion, leveraging its scale and R&D in technologies like fan-out wafer-level packaging (FoWLP) and 2.5D/3D integration.
($1 = 31.6800 Taiwan dollars)
(Reporting by Wen-Yee Lee; Editing by Christopher Cushing)