TL;DR · 30-second read
The Short Version
Before a computer chip can be used, it has to be mounted, wired up and tested. The chips that power artificial intelligence need an especially complicated version of this step, called packaging.
ASE, a Taiwanese company that is one of the world’s biggest specialists in this work, said its sales from July to September reached about $7.6 billion, up 35 percent on a year earlier. Its packaging and testing business grew faster still, up 41 percent.
The point: the chip factories get the attention, but the assembly stage behind them is growing quickly too.
ASE Technology Holding Co., Ltd. (NYSE: ASX; TAIEX: 3711), the Taiwan-based chip packaging and testing group, reported unaudited consolidated net revenue of NT$88.13 billion (US$2.78 billion) for September 2026 in a release carried by PR Newswire on October 12. That was up 7.2% from August and 45.5% from September 2025 in Taiwan dollars, or up 8.7% and 39.2% in US dollars.
Third-quarter revenue reached NT$244.16 billion (US$7.64 billion), up 27.8% from the second quarter and 44.8% from a year earlier. The assembly, testing and materials (ATM) business, ASE’s core chip-packaging operation, booked NT$151.49 billion (US$4.74 billion) in the quarter, up 20.1% sequentially and 51.0% year on year.
Executive Summary
ASE’s September figures close out a quarter in which one of the world’s largest outsourced chip packaging and test providers grew revenue by nearly half in local-currency terms. The headline group number is strong, but the more telling figure is inside it: the ATM business, which handles the packaging and testing that turns a finished silicon wafer into a usable chip, grew 51.0% year on year in the third quarter, faster than the group’s 44.8%.
That matters for AI infrastructure because packaging is a mandatory step between the foundry and the data center. Most attention in the AI chip supply chain goes to wafer fabrication. ASE’s numbers indicate that the back end of that chain, where processors are paired with memory, wired, sealed and tested, is expanding at a comparable pace rather than trailing behind.
The quarter also carried two caveats. September’s month-on-month gain in packaging was a modest 2.7%, with most of the group’s sequential lift coming from outside ATM. And roughly ten percentage points of the year-on-year growth rate in Taiwan dollars reflects a weaker local currency; in US dollars, the group grew 34.9% and ATM 40.6%.
The Back End Is Growing Faster Than the Group
Every AI accelerator that leaves a foundry as part of a wafer still has to be cut out, mounted on a substrate, connected to its high-bandwidth memory stacks, sealed and tested before a server maker can install it. That back-end work is what ASE’s ATM segment sells. If packaging capacity lagged wafer output, finished silicon would sit in queues as inventory rather than becoming deployable compute, and data center operators would feel it as delayed server deliveries.
ASE’s figures point the other way. ATM revenue rose 51.0% year on year in the third quarter to NT$151.49 billion, against 44.8% for the group, and 50.5% in September alone against 45.5% for the group. ATM accounted for about 62.0% of group revenue in the quarter, up from about 59.5% a year earlier. Of the NT$75.6 billion the group added year on year, roughly NT$51.2 billion, or about two-thirds, came from ATM. In plain terms, the packaging and test business is not merely riding the group’s growth; it is driving most of it.
The limit on this reading is mix. ATM covers conventional packaging for phones, PCs, cars and industrial chips as well as the advanced multi-die packaging that AI processors require, and ASE does not break out AI-related revenue in its monthly figures. Growth of this size in a mature packaging business is consistent with AI-driven demand for advanced packaging, but the monthly data cannot prove how much of it is AI. Chip designers booking back-end capacity, server makers planning builds and operators timing deployments should treat it as a strong directional signal rather than a capacity measurement.
September’s Step-Up Came From Outside Packaging
Month to month, the picture is flatter. ATM revenue rose only 2.7% in September to NT$52.67 billion, while group revenue rose 7.2%. Subtracting ATM from the consolidated total, revenue outside the packaging business rose about 14.5% in the month, to roughly NT$35.5 billion. ASE’s other main operation is electronics manufacturing services, which builds modules and systems; because consolidated figures are net of sales between ASE units, the subtraction is an approximation rather than a segment report.
The quarterly comparison shows the same pattern. Group revenue rose by about NT$53.1 billion from the second quarter, and slightly more than half of that, about NT$27.8 billion, came from outside ATM, whose revenue rose roughly 42.8% sequentially against ATM’s 20.1%. ATM’s share of group revenue fell from about 66.0% in the second quarter to 62.0% in the third.
None of this undercuts the packaging story: a 20.1% quarter-on-quarter gain is large for a business of ATM’s size. But it does mean the group’s September acceleration should not be read as a packaging acceleration. One month of 2.7% growth is not a trend, and packaging capacity tends to come online in blocks as tools and cleanroom space are added, so monthly revenue can plateau between expansions. The fourth-quarter monthly reports will show whether September was a pause or a new run rate.
Currency Flatters the Local-Currency Figures
ASE reports in both Taiwan dollars and US dollars, and the gap between them is material. Third-quarter group growth was 44.8% in Taiwan dollars but 34.9% in US dollars; for ATM it was 51.0% against 40.6%. The company’s own figures imply an average rate of roughly 29.8 Taiwan dollars per US dollar in the third quarter of 2025 and roughly 32.0 a year later, so a weaker local currency added about ten points to the reported year-on-year growth rates.
For international customers and investors comparing ASE with US-listed suppliers, the dollar figures are the cleaner read. They still support the central point: in US dollars, ATM grew about 41% year on year, comfortably ahead of the group’s 35%. The month-on-month currency effect ran the other way in September, with the Taiwan dollar slightly firmer than in August, which is why dollar-denominated growth (8.7%) exceeded local-currency growth (7.2%) for the month.
Background
ASE Technology Holding Co., Ltd. was formed in 2018 as the holding company combining Advanced Semiconductor Engineering and Siliconware Precision Industries, two of Taiwan’s largest chip packaging and test firms. The group is one of the world’s largest outsourced semiconductor assembly and test (OSAT) providers, meaning it packages and tests chips designed by other companies and fabricated at foundries. It also runs an electronics manufacturing services business that builds modules and systems.
Packaging was long treated as the commodity end of chipmaking. AI changed that: modern accelerators combine processors and high-bandwidth memory side by side or stacked on a shared base, and the techniques that make those connections have become a gating step in AI chip supply. That has pushed both foundries and OSATs such as ASE to expand advanced packaging capacity, and made their monthly revenue a closely watched indicator of AI hardware demand. Source: ASE Technology Holding Co., Ltd. Announces Monthly Net Revenues — ASE’s unaudited consolidated and ATM net revenues for September and the third quarter of 2026.Sources