Taiwan chip packers expand US, Southeast Asia capacity in 2026

Taiwan's five largest semiconductor packaging and testing (OSAT) service providers are all planning to expand production capacity outside Taiwan and China during 2026. The companies involved are ASE, SPIL, KYEC, Greatek, and Tong Hsing.

The expansion is being driven by the global artificial intelligence boom, which is creating unprecedented demand for semiconductor packaging and testing services. These services — the assembly, packaging, and testing of chips after they leave the fab — are critical bottleneck steps in semiconductor supply chains, especially as AI workloads require large volumes of chips to be assembled and validated for deployment in data centers and cloud infrastructure.

The article does not specify the scale of investment, precise facility locations, or completion timelines for these capacity additions. However, the coordinated move by all five major Taiwanese OSAT players to expand in the US and Southeast Asia signals a broader industry shift away from concentration in Taiwan and China, likely reflecting customer preference for supply-chain resilience and reduced geopolitical exposure.

The article identifies a structural shift in semiconductor manufacturing driven by sustained AI demand. Taiwan's OSAT (Outsourced Semiconductor Assembly and Test) sector has historically concentrated production in the home market and mainland China for cost and scale advantages. The announcement that five major players — ASE, SPIL, KYEC, Greatek, and Tong Hsing — are all pursuing overseas expansion in 2026 suggests coordinated industry recognition that geographic diversification has become competitive necessity, not optional.

The body frames this expansion in terms of AI-driven capacity demand: as large language models and AI inference workloads scale, the volume of chips requiring packaging and testing grows sharply, and customers may prefer or require production outside China due to geopolitical risk and supply-chain resilience. The focus on US and Southeast Asia specifically points to proximity to major cloud providers, fabless designers, and final markets in those regions.