Advanced Packaging Continues to Heat Up: ASE and TSMC Expand Investments

Growing Demand for Advanced Packaging Fuels Global Expansion

The advanced packaging sector is witnessing unprecedented growth, with major semiconductor companies making substantial investments to expand capacity and enhance technologies. ASE Group (Advanced Semiconductor Engineering) is set to establish a new fan-out panel-level packaging (FOPLP) production line in Kaohsiung, while TSMC is accelerating its investment in both advanced process nodes and advanced packaging solutions.

These strategic moves reflect the semiconductor industry’s increasing reliance on advanced packaging to support AI chips, high-performance computing (HPC), and next-generation devices.

ASE: New FOPLP Production Line and Overseas Expansion

$200M Investment in Kaohsiung for Fan-Out Panel-Level Packaging

On February 18, ASE COO Wu Tianyu announced that the company is investing $200 million to establish a high-volume FOPLP production line in Kaohsiung, Taiwan.

Installation Schedule: The company will install production equipment in Q2 and Q3 of 2024, with trial production set for the end of the year.

Commercialization Target: If successful, ASE will begin customer validation in early 2025, with mass production expected shortly after.

Target Specifications: The 600×600mm format is expected to become the new mainstream standard for FOPLP.

According to TrendForce, advanced packaging applications can be divided into three main categories:

Power Management ICs (PMICs) and RF ICs

CPU and GPU

AI GPUs (expected mass production in 2027)

ASE Expands Overseas, Opens Two New Factories in Malaysia

In addition to its Taiwan investment, ASE is ramping up its global production footprint. On February 18, the company held an opening ceremony for its fourth and fifth semiconductor factories in Penang, Malaysia.

$300M Investment: The new facilities will serve the automotive semiconductor and AI chip markets.

Strategic Significance: Malaysia is emerging as a key semiconductor hub for global supply chains.

Financial Performance: Advanced Packaging Revenue Surges

ASE Group’s 2024 financial results reflect the growing demand for advanced packaging:

Q4 2024 Revenue: NT$162.26 billion (~$5.15 billion), up 1% QoQ and 1% YoY.

Full-Year Revenue: NT$595.41 billion (~$18.91 billion), a 2% YoY increase.

Advanced Packaging Growth: Advanced packaging revenue surpassed $600M, more than doubling from 2023 ($250M).

2025 Outlook: ASE forecasts an additional $1B revenue growth from advanced packaging and testing.

ASE is expanding R&D investments, human resources, and smart factory capabilities to strengthen its position in the high-growth semiconductor packaging industry.

TSMC: Accelerating Investments in Advanced Nodes and Advanced Packaging

$17.1B Investment Plan for Process & Packaging Expansion

On February 12, TSMC announced a $17.1 billion investment aimed at:

Expanding advanced process node capacity

Scaling advanced packaging solutions (CoWoS, InFO)

Constructing new fabs

TSMC’s Expanding US Footprint

TSMC is actively strengthening its US operations, including advanced packaging facilities.

New Arizona Fab (Fab 21p) to begin construction in mid-2024, featuring 2nm and A16 process nodes.

Second Arizona Fab (for 3nm production) to complete cleanroom installation by Q1 2026, with volume production by late 2027.

Potential CoWoS packaging facility in the US to meet rising AI GPU demand.

2025 CapEx Surges to $42B

TSMC’s 2025 capital expenditure (CapEx) is expected to increase by 40% YoY, reaching $38B–$42B.

70% allocated for advanced process nodes

10–20% for advanced packaging & testing

20–30% for mature specialty nodes

Notably, TSMC’s partner Amkor Technology is also expanding its advanced packaging presence in Arizona to support TSMC’s US operations.

Conclusion: Advanced Packaging Fuels Semiconductor Growth

Both ASE and TSMC are making massive investments to expand their advanced packaging capabilities.

ASE is leading the charge in fan-out panel-level packaging (FOPLP) with its new Kaohsiung facility and Malaysia expansion.

TSMC is doubling down on advanced packaging investments to support AI, HPC, and next-gen computing.

With demand for AI chips, automotive semiconductors, and high-performance processors surging, advanced packaging is poised to become a critical driver of semiconductor innovation and growth in the coming years.