News

[News] Following TSMC, ASE Reportedly Plans to Establish Plant in Kumamoto


2024-04-29 Semiconductors editor

Following TSMC’s announcement of investing USD 20 billion to build two plants in Kumamoto, Japan, industry sources cited by a report from Commercial Times has indicated that the major global semiconductor assembly and testing provider, ASE Group, is in discussions with the Japanese government to finalize subsidies and investment details.

Reportedly, ASE plans to invest nearly NTD 10 billion (roughly USD 306.3 million) to construct its first advanced packaging plant in Kumamoto, becoming the second Taiwanese semiconductor giant to set foot in the region.

Regarding the establishment of a plant in Kumamoto, ASE Group stated that it does not comment on market rumors.

During its earnings call last week, ASE Group announced a capital expenditure increase to expand related capacities due to the upward adjustment in advanced packaging projects. This year’s capital expenditure, originally estimated at around USD 2.1 billion with a year-on-year increase of over 40%, has been raised to a potential 50% increase (up to USD 2.25 billion), potentially reaching a historic high.

The semiconductor industry is witnessing a great era of global competition with various countries pouring money into subsidies. Recently, there have been rumors of the Japanese government actively reaching out to Taiwanese semiconductor companies and offering substantial subsidies, aiming to build a complete semiconductor industry chain covering upstream, midstream, and downstream sectors.

Apart from TSMC’s decision to establish two advanced semiconductor plants in Kumamoto, Intel is also considering establishing an advanced packaging research institution in Japan, and Samsung is planning to set up advanced packaging research facilities in Yokohama.

Industry sources cited by the same report point out that these signs have indicated that after mastering wafer manufacturing technology, the next phase for Japan is to enhance the establishment of the packaging industry.

Industry rumors have recently circulated that the Japanese government has been in discussions with senior executives from ASE Group for some time, and the relevant subsidy and investment details are generally agreed upon. The location for the new facility is expected to be in Kumamoto, near TSMC’s upcoming plant. As per the same report citing sources, there is a chance that ASE’s Kumamoto facility, like TSMC’s second plant in Kumamoto, will be planned to start production before the end of 2027.

In fact, as early as 2004, ASE Group acquired full ownership of an IC packaging and testing facility in Yamagata Prefecture, Japan, from NEC for USD 80 million. However, over the past two decades, Japan’s influence in the global semiconductor sector has waned, and ASE’s acquisition of the NEC facility has not made significant operational contributions.

ASE Group’s global footprint currently includes high-end product bases in Taiwan, as well as its packaging and testing capacities in China, Japan, Malaysia, South Korea, and Singapore.

ASE is continuing its expansion efforts in Taiwan, including Kaohsiung, Zhongli, and Tanzi. Evenmore, on February 22nd, ASE Group and semiconductor giant Infineon Technologies jointly announced the finalization of an agreement. ASE Group will invest EUR 62.589 million to acquire Infineon’s backend packaging facilities located in Cavite, Philippines, and Cheonan, South Korea.

Read more

Please note that this article cites information from Commercial Times.

Get in touch with us