TSMC Advanced Packaging Overflow Benefits ASE

According to people familiar with the matter, ASE has secured a large share of TSMC's CoWoS outsourcing business and is set to receive additional orders. At the same time, another fast-rising technology called CoWoP is drawing attention. Unlike traditional chip packaging that relies on substrates such as ABF, CoWoP skips the substrate entirely by bonding chips and silicon interposers directly onto a reinforced platform PCB. TSMC is said to have assigned SPIL a central role in executing this architecture.

According to industry observers, the generative AI boom led by OpenAI has become the main growth engine for the tech sector, sending high-performance computing demand from companies such as NVIDIA and AMD sharply higher. Tech giants including Microsoft, Meta, Amazon AWS, and Google are racing to secure computing capacity, and demand is expected to stay strong at least through the end of next year.

According to market watchers, TSMC is currently the sole manufacturing partner for NVIDIA and AMD in advanced HPC chips. Its cutting-edge process nodes at 2nm and 3nm, along with SoIC and CoWoS packaging capacity, are already fully booked. To keep up with massive AI-driven orders, TSMC has accelerated outsourcing in advanced packaging and testing.

According to the company, ASE is the biggest winner from this outsourcing wave. Management expects advanced packaging and testing revenue to reach US$1.6 billion this year and grow by more than US$1 billion in 2026—an increase of over 60%. This long-term visibility has encouraged continued capital investment to strengthen its position in the global chip packaging and testing market.

According to project updates, capacity expansion is moving quickly. New facilities in Erlin and Douliu under SPIL are expected to be ready next year, while ASE Semiconductor's newly acquired plant in Kaohsiung is also scheduled to receive equipment in the same timeframe. These upgrades are seen as key drivers for growth going into 2026.

According to ASE's disclosures, investment in plant construction and tools by ASE Semiconductor and SPIL over the past two months has totaled NT$11.173 billion, with more spending likely to follow. The scale of this investment reflects just how hot the advanced packaging market is as AI and HPC demand continue to surge.