ASE investing NT$100 billion in Kaohsiung

SCALING UP: Two new facilities are expected to generate NT$80 billion in annual revenue and 5,000 jobs, while ASE agreed to buy more AI Nose systems

• By Lisa Wang / Staff reporter

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ASE Technology Holding Co (日月光投控), the world’s biggest chip packager and tester, yesterday said it is investing NT$100 billion (US$3.05 billion) in two new manufacturing facilities in Kaohsiung’s Lujhu District (路竹), scaling up capacity to meet surging demand for artificial intelligence (AI) computing hardware.

Subsidiary Advanced Semiconductor Engineering Inc (ASE, 日月光) officially inaugurated the first phase of its Lujhu fab while breaking ground on the second phase.

The facilities in the Southern Taiwan Science Park are the group’s first expansion into Taiwan’s science park system.

Advanced Semiconductor Engineering Inc CEO Tien Wu, left, joins Marvell CEO Matt Murphy at a keynote speech during Computex Taipei on June 2 this year.

Photo: Reuters

The two factories are expected to generate NT$80 billion in annual revenue and create 5,000 new jobs once the factories reach full capacity, ASE Holding said in a statement.

The Lujhu facilities would be the group’s second manufacturing hub, complementing its primary production complex and headquarters in Kaohsiung’s Nanzih District (楠梓), it said.

“Rapid development in AI and high-performance-computing [HPC] devices continues to boost demand for advanced chips and, thus, for advanced packaging technology and capacity,” ASE Inc executive vice president Mike Hung (洪松井) said in the statement.

“With advanced packaging emerging as a critical driver of semiconductor computing performance, ASE is proactively expanding its capacity, technological capabilities and talent pool,” Hung said.

ASE Holding last month raised its annual capital expenditure budget for the third time to US$11.5 billion, driven by expectations that customer demand next year would continue to outpace capacity, particularly for its leading-edge advanced packaging technologies used in AI chips.

The first-phase fab was converted from an idle flat-panel plant that the company acquired from AUO Corp (友達) in July for about NT$6.5 billion.

The investment in new capacity reflected the company’s long-term commitment to meeting global customer demand and deepening Taiwan’s competitive advantage in the global semiconductor supply chain, S.F. Wang (王頌斐), executive vice president of ASE Inc’s Kaohsiung unit, said in the statement.

ASE’s advanced packaging expansion in the Southern Taiwan Science Park would further strengthen Taiwan’s semiconductor supply chain — from wafer manufacturing to packaging and testing services to downstream companies — Science Park Bureau Director-General Alice Cheng (鄭秀絨) said in a statement.

The investment would also inject fresh growth momentum into southern Taiwan’s semiconductor hub, she added.

Separately, ASE Holding yesterday inked a US$9 million agreement with Ainos Inc to purchase 5,000 additional AI Nose systems, which digitize scent and chemical signals into machine-readable smell identification data, the Houston-based firm said in a statement.

The agreement represents the largest single purchase order by value in Ainos’ history and marks a new phase of commercial scale for its chemical intelligence platform in advanced semiconductor manufacturing, the statement said. The purchase follows the delivery of 1,400 systems under the companies’ previous US$2.1 million agreement.