ASE Technology Holding, the world’s largest semiconductor packaging and testing services provider, reported stronger-than-expected second-quarter results and projected robust growth through 2026, banking on expanding demand for advanced chip testing driven by artificial intelligence applications.
The Taiwanese company posted second-quarter revenue of NT$150.75 billion ($5.0 billion), up 2% quarterly and 7% annually. Net income reached NT$7.52 billion ($251 million), remaining flat from the prior quarter while declining 3% year-over-year.
The overall packaging and testing industry is expected to grow by 9% in 2025, according to market research firm IDC, as AI chip demand accelerates. ASE’s chief operating officer Wu Tianyu said testing business momentum from the first half would continue, driven by increased turnkey services and expanding advanced testing requirements.
The company is shifting strategy beyond traditional wafer-level testing to final testing and burn-in services, targeting higher-margin operations. ASE expects testing revenue growth to double that of packaging this year, with testing accounting for roughly 20% of total assembly and testing revenue by the fourth quarter.
For the third quarter, ASE projected revenue growth of 12% to 14% sequentially in dollar terms, though margin pressure from currency fluctuations may trim gross margins by 1 to 1.2 percentage points.
The semiconductor industry faces mounting pressure from AI-driven demand, with companies racing to expand capacity for specialized testing services that command premium pricing.