Amid US-China trade tensions and the potential for new US semiconductor tariffs under President Donald Trump, Taiwan's IC packaging and testing industry is showing strong first-quarter 2025 results. However, there are growing concerns that these tariffs might disrupt order momentum and affect the global electronic components supply chain.
Taiwan's IC backend suppliers are experiencing minimal impact from initial reciprocal tariffs due to exemptions on semiconductors. The packaging and testing supply chain reports that production and shipments are on track, with potential benefits anticipated from long-term order transfers amid tightening US "whitelist" restrictions.
US Customs and Border Protection has released a list of temporarily tariff-exempt goods, such as computers, smartphones, and servers. US Secretary of Commerce Howard Lutnick indicated that future tariffs would focus on high-end electronics, including semiconductors, possibly increasing risks for Taiwanese suppliers.
Despite uncertainties, Taiwan's semiconductor backend giants like ASE Technology Holding and King Yuan Electronics have reported strong results in the usually slow first quarter, thanks to steady demand from late 2024. This performance has benefited upstream suppliers such as wire bonding and testing interface vendors, which are experiencing increased shipments.
ASE Technology Holding reported a record consolidated revenue of NT$53.748 billion (approx. US$1.67 billion) in March, marking a 19.5% increase month-over-month and a 17.7% rise year-over-year. The first-quarter revenue reached NT$148.153 billion, down 8.7% from the previous quarter but up 11.6% from last year, setting another record. Packaging and materials, comprising 58.5% of the first-quarter revenue, grew 17.3% year-over-year, driven by urgent AI PC application orders.
Chang Wah Technology (CWT), a major supplier of packaging leadframes, announced impressive first-quarter results, showing a significant recovery over the previous quarter and year. The company reported a March revenue of NT$1.105 billion, an 8.3% increase from February and a 21.6% rise from last year, marking the highest monthly figure since November 2022. The first-quarter revenue reached NT$3.18 billion, growing 0.4% quarter-over-quarter and 16.2% year-over-year, making it the second-highest first-quarter total on record.
Uncertainty persists as some downstream customers consider speeding up orders due to potential tariffs, though definite actions remain pending. Industry insiders believe the changing US policy environment may lead to gradual shifts in orders, highlighting the advantages of previous whitelist restrictions in upcoming quarters.
Article edited by Jack Wu
