Taiwan Semiconductor Manufacturing Co. (TSMC) bought two AUO plants for NT$38.8 billion, and that deal is now rippling through its packaging and testing plans. Supply chain sources said Siliconware Precision Industries Co. (SPIL), a unit of ASE Technology Holding, is set to take over nearly 50 hectares of TSMC group land in the Erlin section of Central Taiwan Science Park, with preliminary investment estimates reaching more than NT$100 billion.
ASE did not comment on the market report. Still, it has raised its advanced packaging and testing revenue target for this year, and Nvidia has previously announced plans with SPIL to expand co-packaged optics, or CPO, capacity.
TSMC’s AUO plant purchase reshapes packaging plans
AUO said on Oct. 29 that it would sell its L7 and L5C plants in Central Taiwan Science Park, along with related facilities, to TSMC for NT$38.8 billion. TSMC is building four 1.4-nanometer fabs as part of the park’s second-phase expansion, with the first plant expected to be completed next year.
According to Economic Daily News, acquiring plants next to TSMC’s existing site could save the time required to build new facilities from scratch, though the final use of the assets still depends on TSMC’s later planning.
The report said ChipMOS Technologies affiliate VisEra Technologies, part of the TSMC group, had originally evaluated building a new packaging and testing plant in Erlin. After TSMC acquired the AUO plants, that plan is now said to be under review.
SPIL said to be in talks over nearly 50 hectares in Erlin
Supply chain sources said land originally planned for VisEra in Erlin will instead be taken over by SPIL. The report said SPIL has recently been in contact with the Central Taiwan Science Park Administration over a new investment project. If the nearly 50-hectare site is fully included, the company could build multiple advanced packaging and testing plants in phases, with total investment preliminarily estimated at more than NT$100 billion.
How the land would be allocated, how many plants would be built, and the final investment amount have not been disclosed. ASE declined to comment on the market speculation.
SPIL already has production capacity coming online in Erlin
SPIL already has facilities in Erlin that have gradually entered production, while additional buildings and equipment are still being installed. In June, the company announced that it had obtained land-use rights for 11.15 hectares in Erlin to prepare for expansion.
If the new project moves forward, SPIL’s cumulative investment in Erlin could reach NT$200 billion, according to the report.
ASE raises target as Nvidia expands CPO work with SPIL
Demand for AI chips and high-performance computing continues to rise. TSMC’s CoWoS expansion has also increased outsourced demand for backend packaging and testing.
At its earnings conference at the end of October, ASE raised its 2026 advanced packaging and testing, or LEAP, revenue target to $4 billion. Its goal for next year is to double capacity, and it also lifted this year’s capital spending to $11.5 billion.
Nvidia said at its GTC event in Berlin that it will work with SPIL to expand optical engine capacity needed for CPO. The target is to reach 15 times current capacity by mid-2027 and then double that again before the end of 2028.
AMD Chair and Chief Executive Officer Lisa Su also said during her October visit to Taiwan that the company would increase investment in Taiwan’s supply chain.
