Taiwan OSATs expand non-China capacity with US and SEA push

Taiwanese Outsourced Semiconductor Assembly and Test (OSAT) companies are increasing their manufacturing capacity outside of China, specifically expanding into the United States and Southeast Asia. This move represents a strategic diversification of their production facilities.

This expansion matters because it reflects a broader industry effort to reduce reliance on China amid geopolitical tensions and improve the resilience of the global semiconductor supply chain. It aims to mitigate potential disruptions and risks associated with concentrated manufacturing.

The mechanism involves OSAT companies investing in new factories and upgrading existing facilities in regions outside China. This shift is driven by government incentives, customer demand for diversified supply chains, and a proactive approach to de-risk operations.

This trend primarily moves Taiwanese OSAT companies like ASE Technology Holding (ASX) and Powertech Technology, potentially boosting their non-China revenues and investments in new regions. It also impacts semiconductor equipment suppliers and could influence regional investment flows in the US and Southeast Asia.