Will CoWoS & Panel Packaging Demand Drive ASX's Next Growth Phase?

• ASX's CoWoS capacity expansion and full process business are on track to generate approximately TWD 300 million in 2026 revenues, with substantial growth expected in 2027
• The company's fully-automated 310-by-310 panel packaging line will begin production in Q1 2027, offering a complementary solution to foundry offerings for AI infrastructure customers
• ASX currently trades at a forward P/E of 24.45X (above industry average of 13.61X) and holds a Zacks Rank #1 (Strong Buy), competing against Amkor Technology and Intel in advanced packaging

Summary: ASE Technology's Advanced Packaging Expansion

Key Company & Focus:

ASE Technology Holding (ASX) is aggressively expanding its advanced semiconductor packaging capabilities, particularly CoWoS (Chip-on-Wafer-on-Substrate) and panel-level packaging technologies, driven by surging AI infrastructure demand.

Critical Financial Metrics:

• First-half 2026 consolidated revenues increased 24% year-over-year
• ATM (Advanced Technology & Materials) revenues grew 35% in H1 2026, with full-year 2026 growth expected at 35%
• LEAP service revenues tracking ahead of the $3.5 billion target, with plans to double LEAP revenues in 2027
• Zacks Consensus Estimate projects 27.9% revenue growth in 2026 and 22.5% in 2027
• Full process business expected to generate approximately TWD 300 million in 2026 revenues

Key Developments:

• Fully-automated 310-by-310 panel packaging line scheduled for production start in Q1 2027
• Expanding CoWoS capacity to meet AI semiconductor packaging demand
• Technology positioned as complementary to foundry offerings

Valuation & Market Position:

• ASX trades at forward P/E of 24.45X versus industry average of 13.61X
• Year-to-date stock return of 22.5% outperformed the broader Electronics-Semiconductors industry return of 31.5%
• Currently rated Zacks Rank #1 (Strong Buy)

Competitive Landscape:

Main competitors include Amkor Technology (reported record $1.9 billion Q2 revenues, up 26% YoY) and Intel (raising 2026 capex above $20 billion for packaging expansion).

Market Implications:

ASX's multi-pronged packaging expansion positions it to capitalize on AI infrastructure bottlenecks, with packaging moving up the semiconductor value chain as chip complexity and integration requirements intensify.