Insights & Stories

Written by Nirvan Dani

In every bubble, there’s always a group of investors who get rich without touching the bubble itself.
In the dot-com era, it was Cisco routers.

In the oil booms, it was the guys selling drill bits.

And in the AI mania of 2025, it could just be ASE Technology Holding, the humble semiconductor packaging company from Taiwan that’s quietly becoming indispensable to every NVIDIA, AMD, and Google chip.

The Forgotten Middle Layer of the AI Boom

Everybody wants to own the “AI future.”

They pile into NVIDIA (already at a P/E that would make Tesla blush ), buy Microsoft because “Copilot,” or toss darts at any ticker with “AI” in the name.

But the real bottleneck — and therefore, the real opportunity — lies not in the cloud or the models, but in the physics of how chips are built and stitched together.

That’s where ASE’s comes in to answer a simple question: How to cram an entire data center’s worth of computing into a single square inch of silicon without it melting through the floor.

2.5D, 3D, and the New Moore’s Law

The industry quietly abandoned the old “shrink the transistor” game.

Now it’s all about stacking and connecting — putting dozens of smaller “chiplets” together in dense packages that behave like one monster processor.

That’s called 2.5D and 3D packaging, and ASE is one of the only global players that can do it at scale.

In fact, when NVIDIA’s CoWoS (Chip-on-Wafer-on-Substrate) packaging lines at TSMC ran at full capacity earlier this year, guess who got the overflow? You guessed it — ASE.

So while investors queue up for the next NVIDIA split, ASE quietly handles the dirty work of assembling those AI brains — soldering, testing, layering, and making sure your $40,000 GPU doesn’t fry itself.

It’s not glamorous, but it’s essential.

The Numbers That Don’t Get Clicks

ASE’s advanced packaging business is still a small part of its total revenue (around 10% today) but it’s growing at hyper-speed.

Management expects it to more than double in 2025, from roughly US$600 million → US$1.6 billion, driven by demand from AI chips and high-performance computing.

Margins in that segment? They’re double the company average.

It’s the kind of business mix shift analysts usually wake up to only after the stock’s up 70%.

You can buy ASE today at ~18× forward earnings, compared to TSMC at 46× or NVIDIA at “please don’t ask.”

In an AI world priced for perfection, ASE is the rare play priced for imperfection.

The TSMC Connection — Taiwan’s Quiet Dream Team

ASE isn’t competing against TSMC — it’s completing it. TSMC makes the wafers; ASE packages, tests, and assembles them into the final product.

When TSMC’s packaging lines overflow (as they have all year), ASE steps in as a trusted partner, ensuring chips ship on time to NVIDIA, AMD, Apple, and Google.

In simple terms: TSMC gets the glory, ASE gets the business.

Why This Matters in the AI Bubble

AI is a capital cycle disguised as a tech story.

Every boom in compute power eventually hits a physical bottleneck — cooling, cost, capacity.

When that happens, the market rotates from the flashy front end (the “what”) to the gritty back end (the “how”). ASE lives in that back end.

While the “AI platforms” fight for market share, ASE gets paid by everyone.
It doesn’t need to pick winners — it just needs the war to keep going.

The Contrarian Setup

• ASE is expanding capacity in Penang, Malaysia, reducing Taiwan concentration and aligning with U.S. and Japanese supply chain realignment.

• It has decades of relationships with every major chip designer on Earth.

• It’s targeting 20–25% CAGR in high-end packaging revenue through 2027.

• Yet, Wall Street mostly still treats it as a cyclical packaging firm.

If you think AI will keep growing (and you probably do), then ASE’s role as the enabler of that growth is structurally underpriced.

The Smart Way to Play a Dumb Market

The AI trade is crowded. But history favors those who buy the boring part of a sexy industry.

In gold rushes, the shovel makers get rich. In the AI rush, ASE is making the shovels, the handles, and the testing gear — and it’s doing it while trading at a reasonable multiple, backed by physical assets and decades of know-how.

You don’t have to out-predict the next OpenAI model.

You just need to bet on the fact that every one of those models will need chips — and every chip needs to be packaged.

The Bottom Line

The smartest AI play might be the one that doesn’t even call itself an AI company. ASE sits at the heart of the hardware supply chain, with exposure to every winner in the AI ecosystem — but without the mania-driven multiples.

In a market full of hallucinations, ASE offers something radical: tangible growth, real margins, and actual metal.

So if you’re looking for the next NVIDIA, you might be too late.

If you’re looking for the next TSMC of packaging, you might be right on time.

This article is for informational purposes only and does not constitute investment advice. Opinions are the author’s own. Always do your own research before investing — past performance is no guarantee of future returns.