Taiwan's outsourced semiconductor assembly and test (OSAT) industry is witnessing its largest-ever capacity expansion wave. ASE Technology Holding (ASEH), Powertech Technology (PTI), King Yuan Electronics (KYEC), Sigurd Microelectronics, and ChipMOS Technologies have simultaneously and substantially raised their capital expenditure. According to the latest plans of each company and analyst estimates, total investment has surpassed NT$460 billion.

As the global OSAT leader, ASE Technology Holding has concentrated the heaviest investment. Its 2026 capex has been raised twice, climbing from the US$7 billion planned at the beginning of the year to US$8.5 billion, with analysts further expecting it to break through the US$10.5 billion mark. ASE Chief Operating Officer Tien Wu noted that the core challenge at present is not whether demand exists, but how to accelerate fab construction and equipment installation. ASE is simultaneously advancing 13 new construction projects and 8 renovation projects, of which approximately US$4 billion is allocated to facilities and infrastructure and US$6.5 billion to production equipment, fully supporting the LEAP advanced packaging platform and mainstream assembly and test requirements. Newly built capacity can support demand through 2028 to 2029.

PTI has raised its full-year capex ceiling from NT$40 billion to NT$50 billion, an increase of 25%. The company is not only expanding advanced assembly and test capacity domestically, but also extending its overseas front to Singapore, partnering with global AI ASIC leader Broadcom to establish a joint venture. Investing US$400 million to focus on fan-out panel-level packaging technology, its FOPLP yield has already reached 95%, with mass production expected in the first half of 2027.

Test giant KYEC has likewise revised its capex upward from the originally planned NT$39.3 billion to NT$50 billion, an increase of approximately 27%. The expansion focuses on high-power burn-in and advanced packaging testing to address the lengthening test times and surging complexity of AI GPU and ASIC chips. Sigurd is extending its deployment into AI ASICs, CPUs, GPUs, silicon photonics, and high-performance computing domains, while simultaneously advancing automation and AI smart factory construction. ChipMOS has also significantly increased its investment, with 2026 capex rising sharply year-over-year, focusing on breaking through memory assembly and test capacity bottlenecks.

This expansion wave covers the entire chain of advanced packaging, high-end testing, memory, and AI application-specific integrated circuits. As TSMC's CoWoS capacity remains tight, a large volume of outsourced orders is flowing to OSAT partners. Strong demand from NVIDIA, AMD, Broadcom, and cloud giants' self-developed ASICs is driving Taiwan's OSAT industry to accelerate its upgrade from traditional back-end processes to a core strategic link in the AI supply chain.

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