ASE sets 2011 Capex at US$900 million

Microelectronics International

ISSN: 1356-5362

Article publication date: 10 May 2011



(2011), "ASE sets 2011 Capex at US$900 million", Microelectronics International, Vol. 28 No. 2.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

ASE sets 2011 Capex at US$900 million

Article Type: Industry news From: Microelectronics International, Volume 28, Issue 2

Advanced Semiconductor Engineering (ASE) Inc., currently the world’s no. 1 chip assembler, has decided to budget US$900 million for expansions in 2011, marking the highest capital expenditure by a single chip assembler in Taiwan.

The latest budget number was a revision from a previously set figure of US$700 million, reflecting the company’s bright perspective of the market at a time when integrated device manufacturers (IDMs) have increased outsourcing to dedicated manufacturers to cud down investment costs.

The company will spend most of its 2011 budget on boosting copper wire bonding, high-end flip-chip and discrete-device packaging capacities at its factories in Taiwan and mainland China as the company has depended on the three products for most of its revenue.

Industry executives pointed out that through investing heavily in copper process capacity, ASE has reversed its perennial profile of an underdog to Siliconware Precision Industry Co., Ltd in terms of share price competition between the two assemblers. Siliconware has mostly depended on gold process for its revenue, inevitably keeping its production cost high when gold prices linger at high levels.

ASE executives pointed out that IDMs, including ATMEL, Synaptics, Broadcom, Infineon, Renesas, NXP, Toshiba and NEC, will ramp up contracts for copper wire-bonding packaging service on their chips this year to keep up with thriving demands from tablet-PC, smartphone and smart-TV makers.

They estimated the chip assembly sector would see higher growth rate than the chip industry as a whole on grounds that the room for them to take contracts from IDMs remain ample.

The company has set the goal of snatching up 40 per cent of world market for chip packaging and test service in three years, with revenue projected at US$10 billion.

The company commanded over 20 per cent of the market in 2010, seeing its revenue spike 120.04 per cent from a year earlier to record high of NT$188.7 billion (US$6.29 billion at US$1:NT$30).

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