<div id="readability-page-1"><div> ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it was increasing capital expenditure to a record US$7 billion this year to meet demand for artificial intelligence (AI) applications and a broader recovery in non-AI sectors.That represents an expansion of about 27 percent from last year’s US$5.5 billion, it said.About two-thirds of the outlay would be earmarked for leading-edge services capacity, as demand outpaces supply, the company said. “The AI server cycle continues, primarily led by hyperscalers and data center development. There is a lot of activity in the physical layers, via agile applications,” ASE chief operating officer Tien Wu (吳田玉) told an earnings conference in Taipei.“For example, we are seeing more design perspectives regarding robotics and drones, as well as equipment for automotive and smart manufacturing,” he said. The Kaohsiung-based company expects leading-edge advanced packaging (LEAP) services revenue to at least double to US$3.2 billion this year, from US$1.6 billion last year, ASE said.The LEAP services include wafer-on-substrate process technology, which is part of the chip-on-wafer-on-substrate (CoWoS) technology. ASE is widely expected to receive outsourcing wafer-on-substrate orders from Taiwan Semiconductor Manufacturing Co (台積電) to help ease the constraints on CoWoS technology for AI chip packaging.“We expect 2026 leading edge revenue to at least double from last year and demand to continue to significantly exceed supply,” ASE chief financial officer Joseph Tung (董宏思) said, adding that there would be further upside if there were no capacity constraints.“As for the general market, last year’s growth momentum would continue this year, given AI’s proliferation and recovery in the automotive and industrial sectors,” he said.The aggressive capital investment this year and beyond is based on ASE’s optimistic outlook on profitability in the medium to long term, Tung said.On top of that, ASE expects gross margin to rise each quarter this year to reach the upper end of its forecast range of 25 percent, as the LEAP and testing services are margin “accretive,” he said.ASE expects a decline of 5 to 7 percent in revenue this quarter from NT$177.92 billion (US$5.62 billion) last quarter, with core chip packaging and testing service revenue edging lower by 3 to 5 percent, bucking the off-season effect, the company said.“For the first quarter of 2026, we will see a much stronger than normal seasonality,” Tung said.Gross margin for its chip packaging and testing services is expected to improve to 24 to 25 percent this quarter, compared with 23.5 percent last quarter.The pricing environment is “friendly,” ASE said. The company has reached a long-term service agreement with customers to deal with fluctuations of material costs such as gold, substrates and others, it said.ASE’s net profit last quarter surged 58 percent to NT$14.71 billion from NT$9.31 billion a year earlier, marking the strongest level in three quarters. On a quarterly basis, net profit rose 35 percent from NT$10.87 billion.Net profit for the full year expanded 25 percent to NT$40.66 billion from NT$332.48 billion in 2024, hitting a three-year high. Earnings per share increased to NT$9.37 from NT$7.52.Gross margin improved to 17.7 percent last year from 16.3 percent in 2024. </div></div>

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ASE Technology Holding Co announced a record capital expenditure of US$7 billion for 2023, a 27% increase from last year, to meet rising demand for AI applications and recovery in non-AI sectors. Two-thirds of the budget will focus on advanced packaging services. ASE expects LEAP services revenue to double to US$3.2 billion. Despite a projected 5-7% revenue decline this quarter, ASE's net profit surged 58% last quarter, reaching NT$14.71 billion, with a gross margin improvement to 24-25%.

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ASE increases capital spending to record US$7bn