{"slug": "ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand", "title": "ASE Technology raises its 2026 capex to $8.5 billion as AI chip packaging demand overwhelms supply", "summary": "ASE Technology raised its 2026 capital expenditure target to $8.5 billion, up from $7 billion in February, as AI chip packaging demand continues to outpace supply. The company expects its advanced packaging revenue to at least double this year, driven by demand from Nvidia, AMD, and Broadcom for AI accelerators and data center GPUs.", "body_md": "*ASE Technology keeps lifting its 2026 spending plan because AI chip demand is still running ahead of the industry's ability to package finished parts. If you follow Nvidia, AMD, or Broadcom, this is one of the supply chain details you can't afford to treat as background noise.*\n\nIf you want to understand why AI hardware still feels scarce even after every major chipmaker has promised more supply, look past the headline GPU orders and watch the companies that package the chips after they leave the fab. ASE Technology sits in that less glamorous part of the chain. It packages and tests finished semiconductors for customers building AI accelerators, data center GPUs, and custom silicon. Without that work, the chip doesn't reach the server rack.\n\nASE raised its 2026 capital expenditure target to $8.5 billion in April, up from the $7 billion plan it had announced in February. The earlier figure was already a record and represented a 27% increase from 2025 spending. ASE spent $1.9 billion on capex in 2024, so the pace of this increase is hard to dismiss as routine cycle spending.\n\nThat is the story. AI demand isn't only pushing foundries like TSMC. It's pushing the back end of the semiconductor industry, where advanced packaging has moved from an afterthought to a constraint.\n\nASE CFO Joseph Tung was direct about it during the company's first-quarter 2026 earnings commentary. Demand continues to exceed supply, and ASE expects leading-edge packaging revenue to at least double from last year. That's not a vague growth narrative. That's a company saying its customers are asking for more capacity than it can currently provide.\n\n## Packaging is now part of the performance race\n\nASE's advanced packaging business, branded LEAP, short for Leading-Edge Assembly and Testing, is now running ahead of the company's earlier expectations. ASE has lifted its 2026 LEAP revenue target to more than $3.5 billion, which would be up 118% year on year. A year ago, many investors still treated this as a specialized corner of the business. Now it's carrying the growth argument.\n\nLEAP matters because the work has changed. Advanced packaging at this level means putting multiple pieces of silicon close enough together that the final module behaves like one larger, faster system. Nvidia's H100 and B200 accelerators, the hardware every large cloud buyer has been chasing, depend on this kind of assembly. AMD's data center GPUs and Broadcom's custom AI silicon are part of the same broader shift.\n\nYou don't get the next jump in AI server performance only by making a smaller transistor. You also get it by moving data faster between chips, cutting power loss, and keeping memory close enough to the processor that the system doesn't choke on its own traffic. Frankly, that is why packaging has stopped being the boring final step. It now decides whether the most expensive silicon in the world can actually do the work customers bought it for.\n\nASE is responding with the kind of buildout that tells you management sees the shortage lasting. The company is tripling its CoWoS-equivalent capacity to 25,000 wafers per month and says it is breaking ground on six new plants globally this year, with sites across the United States, Malaysia, Japan, Germany, and Taiwan. Its Kaohsiung facility in the Renwu area alone involves investment of more than NT$100 billion.\n\nThose are not small adjustments. They are the physical footprint of the AI boom: clean rooms, tools, land, engineers, and years of execution risk compressed into one spending cycle.\n\n## The next bottleneck is already visible\n\nCo-packaged optics, or CPO, is the next piece investors should watch. ASE says CPO will enter mass production in 2026, and several major customers are qualifying its in-house FOCoS packaging technology, with commercial volumes expected in the second half of the year. This is still early, which is exactly why it matters.\n\nCPO brings optical components directly into the chip package. The goal is to replace some copper connections inside AI servers with faster, lower-power optical links. In large AI clusters, the problem isn't just raw compute. It is moving data between processors and networking hardware without wasting huge amounts of power along the way.\n\nIf CPO becomes standard in next-generation AI racks, ASE gets pulled deeper into the center of the architecture decision. The company is no longer just helping customers ship finished chips. It is helping determine what the next AI server physically looks like.\n\nThere is still a hard question here. ASE can spend $8.5 billion, raise LEAP targets, add capacity, and qualify new packaging technology, and the shortage may still not clear quickly. Nvidia, AMD, Broadcom, and the cloud companies behind them are not slowing their AI infrastructure plans because one part of the supply chain needs time to catch up.\n\nThat's why ASE's capex raise is more than a company update. It is a warning from the part of the semiconductor industry that usually stays out of view. The AI buildout is no longer waiting only on chips. It is waiting on the companies that can assemble them into something usable.\n\n**Also read:** [AIP and Brookfield are both bidding for Stack Infrastructure's Asia operations and the $30 billion price tag explains exactly what AI has done to data center valuations](https://startupfortune.com/aip-and-brookfield-are-both-bidding-for-stack-infrastructures-asia-operations-and-the-30-billion-price-tag-explains-exactly-what-ai-has-done-to-data-center-valuations/) • [ByteDance is seeking $20 billion offshore to fund an AI buildout that goes far beyond TikTok](https://startupfortune.com/bytedance-is-seeking-20-billion-offshore-to-fund-an-ai-buildout-that-goes-far-beyond-tiktok/) • [Nvidia's banned chips are selling for twice their price in China and Washington still thinks the export controls are working](https://startupfortune.com/nvidias-banned-chips-are-selling-for-twice-their-price-in-china-and-washington-still-thinks-the-export-controls-are-working/)", "url": "https://wpnews.pro/news/ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand", "canonical_source": "https://startupfortune.com/ase-technology-raises-its-2026-capex-to-85-billion-as-ai-chip-packaging-demand-overwhelms-supply/", "published_at": "2026-06-24 08:22:32+00:00", "updated_at": "2026-06-24 08:51:31.755598+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure"], "entities": ["ASE Technology", "Nvidia", "AMD", "Broadcom", "TSMC", "Joseph Tung", "Kaohsiung", "CoWoS"], "alternates": {"html": "https://wpnews.pro/news/ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand", "markdown": "https://wpnews.pro/news/ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand.md", "text": "https://wpnews.pro/news/ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand.txt", "jsonld": "https://wpnews.pro/news/ase-technology-raises-its-2026-capex-to-8-5-billion-as-ai-chip-packaging-demand.jsonld"}}