ASE considers investment options in U.S., Japan, Mexico

Taipei, June 26 (CNA) Taiwan-based ASE Technology Holding Co., the world's largest IC packaging and testing services provider, is considering investing in the United States, Japan or Mexico, to expand advanced processes, Chief Operating Officer Tien Wu (吳田玉) said Wednesday.

Speaking with reporters on the sidelines of the company's annual general meeting, Wu said ASE does not rule out of the possibility of expanding its production in the U.S., Japan or Mexico in response to requests from its clients at a time of geopolitical tensions and the restructuring of global supply chains.

The production expansion plans aim to meet growing demand for high end processes, in particular advanced chip-on-wafer-on-substrate (CoWoS) packaging technology, a 3D packaging technology, which is used in artificial intelligence chip production, Wu said

He expressed optimism over the market outlook for CoWoS, saying sales generated from CoWoS business will top the company's earlier forecast of US$250 million for 2024 amid the current AI boom.

Strong demand for CoWoS services is expected to continue into 2025, he added.

Wu said ISE Labs Inc., an ASE subsidiary, is scheduled to expand testing services for high-end chip production in California in mid-July, while Universal Scientific Industrial (Shanghai) Co. (USI), another ASE unit, has purchased land in Mexico to build facilities, aiming to provide solutions to the automotive and power management supply chains in North America.

ASE is expected to provide more IC packaging and testing capacity to meet the needs from emerging technologies such as AI applications and self-driving automobile and robot production, he added.

In addition to the options of expansion in the U.S., Japan and Mexico, ASE is also interested in Malaysia for further investments, he said.

According to ASE, its plant located in Penang, a Malaysian state, posts about US$350 million in revenue a year and sales are expected to grow US$750 million over the next two to three years. ASE has said it is planning to invest US$300 million in Malaysia over a five year period to add advanced production equipment.

In Taiwan, while the company will continue to expand capacity, ASE will also aim to invest to add automation production and boost efficiency, Wu said.

As for the planned investments in advanced processes at home and abroad, ASE will raise its capital expenditure sharply, Wu added without elaborating.

At an investor conference held in April, ASE said it expects its capex to grow more than 50 percent from a year earlier in 2024 to a new high.

At the shareholder meeting, a proposal to issue NT$5.2 (US$0.16) in cash dividend per share for 2023 profits was approved, meaning ASE will give a total of NT$22.84 billion in dividends.

Based on earnings per share of NT$7.39 in 2023, the payout ratio is 70.4 percent.