Taiwan’s Top 5 Chip Packaging Giants Set to Invest $2.9 Billion in Cutting-Edge Capex for 2024

Semiconductor industry is witnessing an unprecedented surge in capital expenditure. This is driven by the intersection of AI applications, memory market rebound, and the shortage of advanced packaging.

Introduction:

In a bold move to bolster Taiwan’s chip packaging and testing capabilities, the nation’s top five firms are poised to inject a staggering $2.9 billion into capital expenditure for 2024. This strategic investment underscores Taiwan’s pivotal role in the global semiconductor supply chain and its commitment to advancing technological innovation.

With this substantial financial commitment, these companies are poised to spearhead breakthroughs in Taiwan’s chip packaging and testing, propelling the industry forward.

Additionally, this surge has sparked significant investment in chip packaging and testing, with local companies in Taiwan taking the lead. Notably, ASE Investment Holdings, Licheng, KYEC, SiG, and Taiwan Star Technology are among the major players actively investing in advanced packaging, driving capital expenditures to unprecedented levels.

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ASE Investment Holdings:

ASE Investment Holdings stands at the forefront of semiconductor packaging and testing, contributing to the global demand surge.

With a commitment to innovation, the company plans to increase its capital expenditure by an impressive 40% to 50% compared to the previous year, reaching approximately US$2.2 billion.

This strategic move aims to meet the capital needs for expanding advanced packaging technologies. This includes fan-out packaging, system-in-package (SiP), wafer bumping, flip-chip packaging (FlipChip), antenna packaging, and embedded substrate packaging (SESUB).

Licheng: Leading the Memory Packaging and Testing Frontier

Licheng, recognized as the world’s leading memory packaging and testing company, is optimistic about market conditions in the second half of the year. Chairman Cai Dukong emphasizes the importance of capital expenditure to capitalize on the significant recovery. They achieve this with an estimated spending of over 10 billion yuan in 2024.

The company plans to take “active capital expenditure actions” to enhance its production capacity, contributing to improved quarterly operations throughout the year.

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KYEC: Pioneering Professional Testing in Taiwan

KYEC, as the largest professional testing factory in Taiwan, is aligning its capital expenditure with the surging demand for testing services. With a capital expenditure of approximately 5.314 billion yuan, the company aims to expand its production capacity. This will help them cater to international AI, high-speed computing (HPC), mobile phone processor, and other heavyweight manufacturers.

Legal experts express optimism about increasing KYEC-related test orders, projecting the proportion of AI-related performance to reach 10%.

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SiG: Strategic Investments in Equipment and Production Capacity

SiG, with a capital expenditure of approximately 1.209 billion yuan, is directing its investments towards equipment replacement and production capacity expansion. However,the company emphasizes flexibility in subsequent adjustments based on customer demand and market development. SiG’s subsidiary, Taixing Technology, plans to allocate approximately 1.33 billion yuan in capital this year. This marks a significant increase from the previous year. The company will utilize the funds for upgrading equipment and expanding production.

Conclusion:

The semiconductor industry is witnessing an unprecedented surge in capital expenditure. The intersection of AI applications, memory market rebound, and the shortage of advanced packaging is driving this.

Moreover, local companies in Taiwan are taking the lead. Their strategic investments in chip packaging and testing are poised to reshape the landscape of the semiconductor market.

The substantial capital injections by ASE Investment Holdings, Licheng, KYEC, SiG, and Taiwan Star Technology signify a robust commitment to innovation and meeting the growing demands of the technology-driven future.

The semiconductor renaissance is undeniably in full swing, ushering in a new era of growth and advancement in the industry.

Editorial Team
Editorial Team
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