TAIPEI (Taiwan News) — Advanced Semiconductor Engineering (ASE) CFO Joseph Tung (董宏思) said Thursday (Oct. 31) the company plans to cooperate with Taiwan Semiconductor Manufacturing Company (TSMC) to expand its advanced packaging capacity.

In an online investor conference, Tung said he expects ASE’s advanced packaging and testing business to exceed US$500 million (NT$15.9 billion), per CNA. Although the scale of the advanced testing business is small this year, the benefits of investing in advanced testing equipment will be seen next year, he said.

Tung estimated that next year’s advanced packaging and testing revenue could grow by more than 10%. However, ASE still faces challenges next year, especially with gross margin trends.

Tung said that excluding applications for AI and high-performance computing (HPC), the overall semiconductor market is stable. However, advanced packaging and testing related to AI and HPC are anticipated to continue growing, while traditional packaging and testing projects will remain stable, he explained.

For the average capacity utilization rate in Q4, Tung said it will be similar to Q3, around 65% to 70%.