Kairos
Stock Research
AT&S looks set to move further into package assembly as substrates and assembly converge. It is expanding in India toward advanced packaging and testing, while AMD, its number one customer, is constantly looking at packaging innovation, per Lisa Su. AT&S already embeds components and silicon bridges inside substrates, so assembling more of the package is a natural evolution. It is reportedly already in talks with SHMD on the India expansion, though nothing is official. x.com x.com x.com
AT&S is preparing the next expansion phase at Kulim, Malaysia, because substrate demand is effectively unlimited and every supplier is capacity constrained. Customers fund most of the capex, so AT&S is covered even if the cycle turns. The new Plot 9 will support the campus's operational and infrastructure needs, including a workforce now above 3,000, rather than house the core fab. x.com x.com
AT&S's Kulim expansion with AMD confirms the customer-funded model: AMD locks in capacity while AT&S keeps the margin. The €1.5-2.0B of capex is funded by long-term customer commitments, and the shares jumped about 29% on the news. As the only European maker of high-end IC substrates, AT&S is positioned as Europe's answer to the ABF substrate bottleneck. x.com
ASE's panel-level packaging implementation for AMD's Venice CPU gives both companies a reason to do great in the coming years. Per SemiAnalysis, ASE and its subsidiary SPIL implemented second-generation fan-out embedded bridge technology for Venice, with limited initial production targeted for Q1 2027. A 310 mm panel fits 25 interposers versus 22 on a 300 mm wafer, a modest 14% gain rather than a dramatic cost reduction. x.com
Austria Technologie & Systemtechnik (AT&S) is a bullish pick. x.com
AMD and Nvidia face a growing capital burden from substrates without the benefit of foundry margin stacking. Each is committing $1 billion to the substrate ecosystem; AMD has also publicly committed $10 billion to its Taiwan supply chain, more than three times its Q2 net income. That capital is unavailable for R&D and product development, while their gross margins are flat or shrinking. Intel's gross margin is growing as customers prepay its foundry for substrates. x.com
AT&S's valuation looks too low relative to some peers given its Intel and AMD revenue exposure; ChatGPT-generated estimates of that exposure may prove too low for FY28. x.com x.com
ASE Technology's packaging tightness now extends beyond AI to analog and mature-node chips, supporting price hikes. Lead times are up over 30%; FC/Wirebond/QFN hikes of 10–80% and CoWoS hikes of 10–20% are expected in 3Q–4Q26. Higher AMD server CPU wafer allocation, CoWoS adoption for Venice, Verano and future AMD CPUs, and limited competition support LEAP growth. LEAP revenue is forecast at US$4bn/$8bn in 2026/27, above guidance. The target rises to NT$843 from NT$754 on 25x 2027E EPS. x.com
Agentic AI is creating a server CPU shortage, and packaging suppliers tied to CPU growth, such as Amkor and ASE, own the scarce inputs. Agents run tool calls, state and coordination on CPUs, pushing CPU-to-GPU ratios from about 1:8 toward parity, per Intel's CEO. Arm's new data-center CPU demand doubled to $2B in six weeks, and Nvidia began shipping standalone Vera CPUs. That demand hits a supply chain already stretched in wafers, DRAM and advanced packaging, with relief unlikely before 2028. … Show more
As custom AI chips become normal, the scarce asset may be the capacity to build them, since every design passes through the same packaging, substrate, PCB material and manufacturing bottlenecks. Meta with MediaTek and Amazon with Alchip show chip design going modular. That favors TSMC for manufacturing, Alchip for ASIC back-end work, Samsung Electro-Mechanics, Ibiden and AT&S for high-end substrates, and Shengyi Technology if AI PCB material stays tight. The bottleneck map widened. x.com x.com
Per FTR Investors, Applied Materials' larger stake strengthens BE Semiconductor's partnership in hybrid bonding and advanced AI chip packaging, supporting a bullish view. Applied Materials is increasing its stake from 9% to about 20%. x.com
AT&S's re-rating is underway, but the market has not priced what its Kulim plant becomes at scale; it is preferable to Japanese substrate makers Ibiden, Shinko and Toppan. The Kulim ramp drove an 18% sequential revenue jump, AMD is the anchor customer, more AI and HPC clients have joined, and five major customers are targeted by fiscal 2027. Free cash flow has turned positive at €223M. With Chongqing serving China and Kulim the West, AT&S collects tolls on both sides of the geopolitical divide. … Show more
