ASE to bolster North American semiconductor supply chain — new packaging and test facility in Mexico expected to hire 500 engineers and technicians in first year

ISE Labs, a subsidiary of ASE Technology, has acquired land in Tonalá, Jalisco, to establish a semiconductor packaging and testing facility, the company said this week. This move strengthens ASE’s regional presence and reflects the company’s expectations for increased demand for outsourced semiconductor assembly and test (OSAT) services in North America.

ASE, the world’s largest OSAT service provider, plans to use the Jalisco facility for chip packaging and testing. However, the company is tight-lipped about which packaging techniques (e.g., wire bond packages, leadframe packages, laminated flip-chip BGA packages, etc.) it will use. The new site in the Axis 2 Industrial Park within the Guadalajara Metropolitan Area will be the foundation for a facility expected to employ some 500 skilled engineers and technicians within its first year.

To address the facility’s workforce needs, ISE Labs will work closely with local agencies, including Jalisco’s State Ministry of Economic Development, State Ministry of Innovation, Science and Technology, and State Ministry of Education. These partnerships will enable workforce training initiatives through collaborations with educational institutions and chambers of commerce, ensuring a pipeline of skilled personnel for ISE Labs.

Demand for semiconductor test and packaging services is expected to grow in North America as multiple chipmakers — including major ones like Intel, TSMC, and Samsung, as well as specialized foundries like GlobalFoundries and IDMs like Texas Instruments — are building up new fabs and expanding existing production facilities, so they are going to produce more silicon in the coming years. That silicon must be tested and packaged, where ASE Technology and its subsidiary ISE Labs come into play.

“ASE is a leading global company that represents the future and it has selected Guadalajara, Jalisco for this strategic investment that will bring important projects to our state,” said Enrique Alfaro Ramírez, Governor of the State of Jalisco. “It also establishes Jalisco as the first state in Mexico, and indeed Latin America, that will offer OSAT services to major semiconductor companies from across North America.”

For now, it is unclear when the new facility will come online, except that it will happen over the next few years. Also, ISE Labs did not disclose the packaging techniques it will offer in Mexico. Technically, ISE offers a wide range of technologies in the U.S. so that the company could transfer many of them to its Mexican facility.

“We are excited to strengthen ISE’s partnership with the state of Jalisco by securing future business expansion through our purchase of land in Tonalá,” said Kenneth Hsiang, CEO of ISE Labs. “This proactive investment demonstrates ISE’s commitment to innovation, growth, and its valued relationship with the state of Jalisco. It also provides business flexibility to expand as demand for semiconductor packaging and test continues to grow throughout North America.”