ASE Advanced Packaging Prices Rise Up to 20%
Miles Bennett
ASE (日月光), the world's largest OSAT, raised advanced packaging prices by up to 20% on July 1, covering CoWoS and FoCoS lines; AI-driven demand is expected to keep supply tight through H2 2027, repricing the entire back-end chain.
What got more expensive, and by how much?
The hike covers CoWoS — chip-on-wafer-on-substrate, placing chips and high-bandwidth memory side by side on a silicon interposer — and FoCoS — fan-out chip-on-substrate, routing chip signals outward to a package substrate. Prices rise by up to 20%.
Both are the packaging formats AI accelerators depend on most. This means → the cost increase feeds directly into AI chip manufacturing costs.
Why can ASE push through a hike this large?
COO Tien Yu Wu cited two drivers: rising raw-material costs requiring pass-through, and surging capex that must be recouped through pricing.
The numbers back him up: ASE's annual capex climbed from roughly $2 billion to $5.3 billion in 2025, then to $8.5 billion in 2026 — more than quadrupling in two years.
ASE is simultaneously building as many as 15 new factory sites; its first high-volume panel-level packaging line — using larger rectangular substrates instead of round wafers to process more chips per run — is set for mass production by year-end.
In plain terms = ASE is spending aggressively to expand while raising prices to fund the build-out — it can do both because customers are queuing for capacity.
How long will the supply squeeze last?
Surging AI demand for high-performance chips and HBM — high-bandwidth memory designed to shuttle data at speed alongside AI processors — keeps 2.5D/3D advanced packaging capacity tight. Industry sources expect the shortage to persist through H2 2027.
Yole projects the global advanced packaging market will grow from $54 billion in 2025 to $109 billion by 2031 — doubling — driven primarily by AI.
This reflects a structural shift: advanced packaging has moved from a back-end afterthought to the key bottleneck constraining AI compute expansion.
Can China's OSAT players benefit?
A-share-listed firms JCET, TongFu, Hua Tian, and YongSi have announced expansion plans totaling nearly RMB 35 billion, with Hua Tian's Nanjing Phase II alone at RMB 10 billion.
ASE's aggressive price hike gives those plans a pricing benchmark. This means → if capacity comes online on schedule, Chinese OSAT firms stand to capture share in a rising-price cycle.
The critical variable is whether capacity lands on time: advanced packaging involves long yield-ramp and equipment-qualification cycles, and expansion plans often lag actual shipments.
Content is for reference only, not financial advice.