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King Yuan Electronics Secures 2nm Certification, Plans $13.4B Capex for AI Packaging Expansion
Electronic Technology · Semiconductors · economic_daily · 2026-10-15
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King Yuan Electronics is pivoting toward AI high-performance computing, securing 2nm certification and planning a massive $13.4 billion capital expenditure to boost advanced packaging capacity by 2027.
What Happened
Strategic Transformation: King Yuan Electronics has successfully transitioned into a key supplier for AI high-performance computing (HPC) and advanced packaging, with HPC now accounting for half of its revenue. The company has mastered high-end FCBGA packaging and is aggressively expanding into 2.5D, CoWoS, and system-level testing, recently securing critical 2nm product certification.
Financial Performance and Headwinds: While the company reported a strong first half with EPS of 3.85 TWD, Q3 revenue dipped 13.1% due to supply constraints in advanced process wafers. Management is closely monitoring the recovery of wafer supply in Q4, which is expected to help clear deferred orders and boost capacity utilization rates.
Capex and Growth Outlook: The company has approved a significant capital expenditure budget of 13.427 billion TWD for 2026, targeting AI, HPC, and advanced packaging equipment. Given the long lead times for such equipment, new capacity is expected to start contributing to revenue in 2027, with significant scale benefits from AI ASIC and advanced packaging anticipated by 2028.
Risk Factors: While aggressive expansion supports long-term growth, it also increases depreciation and capital costs, as evidenced by negative free cash flow in the first half. Investors should closely monitor the actual utilization rates of the new capacity and the company's ability to maintain its competitive edge in the advanced process supply chain.