ASE Technology Holding broke ground on a NT$17.6 billion ($579 million) advanced packaging facility in Kaohsiung, betting that demand for artificial intelligence chip assembly services will continue to outstrip supply through the end of the decade.
The eight-story K18B plant at Nanzih Science Park is slated for completion in the first quarter of 2028 and will create nearly 2,000 jobs, according to the company. The world’s largest independent chip packager is targeting CoWoS production—the specialized technique used to assemble processors for Nvidia and AMD data centers.
While Taiwan Semiconductor Manufacturing Co. pioneered CoWoS technology over a decade ago, the AI boom has transformed it from a niche service into one of the industry’s most sought-after capabilities. Nvidia accounts for roughly 63% of total CoWoS demand, creating bottlenecks as chipmakers race to expand capacity.
TSMC has begun outsourcing mid-to-lower tier CoWoS orders to partners including ASE to meet customer requirements, providing an opening for the Kaohsiung-based company to capture market share. The strategy comes with risks: if AI demand softens or customers consolidate supply chains, ASE could face underutilized capacity by the time the facility opens.
The facility will connect to ASE’s adjacent K18 plant through underground pipelines and feature anti-vibration design. ASE expects revenue from advanced packaging and testing to increase by $1 billion annually, driving 10% growth in its packaging business.
The expansion adds to Taiwan’s southern semiconductor corridor, which government officials say extends from Tainan to Kaohsiung and includes TSMC, material suppliers and equipment manufacturers.
