ASE Investment Holdings has revised up this year’s capital expenditure for the fourth time and doubled its advanced packaging and testing revenue target for next year.

ASE Investment Holdings held a meeting today (29th) to raise its capital expenditure for this year for the fourth time.

ASE Investment Holdings (3711), the leader in packaging and testing, held an online press conference today (29th). Chief Financial Officer Dong Hongsi said that demand for advanced packaging and testing (LEAP) continues to be strong, and this year’s LEAP service revenue target has further increased from the original 3.7 billion US dollars. It has been revised to US$4 billion, and the target revenue in 2027 has doubled. In response to customer demand and business growth, ASE Investment Holdings has also increased its capital expenditure this year from the original estimate of US$10.5 billion to US$11.5 billion. Capital expenditure will also increase again next year.

Looking forward to the fourth quarter, ASE Investment Holdings estimates that based on the assumption of NT$1.00 to NT$31.9, the consolidated revenue in NT$ in the fourth quarter will increase by 6% to 8% quarter-to-quarter, the consolidated gross profit margin is estimated to be 23% to 24%, and the operating profit margin will be between 14.5% and 15.5%.

Dong Hongsi said that demand is not a problem at present, and production capacity is still in short supply. Companies that can find ways to free up more factory space or production capacity will have the opportunity to grasp market demand. He also admitted that factory space is indeed one of the biggest constraints currently facing operations. In response to customer demand and business growth, we will continue to invest necessary resources to expand production, and capital expenditures will further increase next year.

Dong Hongsi pointed out that this year’s capital expenditure will be revised upward from the original estimate of US$10.5 billion to US$11.5 billion. About half of the increase of US$1 billion will be used for factory facilities and new plant maintenance, and the other half will be invested in equipment procurement. About 60% of the new equipment expenditures will be used for advanced packaging and testing projects, and the remaining 40% will be invested in mainstream products.

In terms of the full-process CoWoS business, Dong Hongsi said that this year's progress is in line with expectations and the revenue target of US$300 million is maintained. Revenue is expected to exceed US$1 billion in 2027, and the yield rate will also reach mass production and shipment levels.

CPO is also one of the key points of ASE’s layout. Dong Hongsi pointed out that CPO products have begun mass production, and CPO-related revenue is expected to exceed US$500 million in 2027. Faced with the growing demand for AI computing, ASE Investment Control has also continued to develop related packaging technologies, hoping to be applied in different fields such as GPUs, CPUs, application special chips (ASICs) and network switches.

In terms of profits, Dong Hongsi said that with the expansion of the advanced packaging and testing business, it is expected to continue to drive further growth in gross profit margin in the fourth quarter and next year. He pointed out that the structural gross profit margin ceiling of the semiconductor packaging and testing business in the past has now become a new benchmark. As production capacity continues to expand, the gross profit margin of the semiconductor packaging and testing business next year will be about 30% as a benchmark, and there is room for improvement quarter by quarter.