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AT&S announced the expansion of its Kulim manufacturing site, based on agreements with its customer AMD and another leading technology company. This reinforces AT&S’s strong technological position and deepens long-standing partnerships with leading customers in the semiconductor industry. Building on the successful ramp-up of plant 1, the expansion includes the fit-out of the existing structure of plant 2 and the construction of a new manufacturing site for IC substrate cores and advanced PCBs.
“Our technological leadership, strong partnerships with the global players in the semiconductor industry, and proven ability to scale advanced manufacturing facilities positions us as the partner of choice for the next wave in growth,” says AT&S CEO Michael Mertin. “The expansion of our site in Kulim underscores the trust our customers place in our capabilities and our shared commitment to long-term profitable growth.”
Responding to structural industry shifts
The expansion comes amid unprecedented demand driven by the global build-out of an artificial intelligence (AI) infrastructure. While the semiconductor industry has historically been cyclical, the current AI-driven cycle stands out in both scale and durability, reflecting a structural shift in how computing systems are designed, developed, and scaled. The rapid evolution of semiconductor architecture is fundamentally reshaping demand for IC substrates. The transition from monolithic chips to chiplet-based designs has already driven significant demand growth. The shift is now being further accelerated by AI, which is emerging as a long-term growth driver for the industry.
Demand is expanding beyond GPUs to include CPUs, memory, and increasingly complex heterogeneous system architectures. The rise of agentic AI is intensifying computational requirements, driving the need for larger, more advanced substrate solutions. At the same time, customers are placing increasing emphasis on performance per watt, energy efficiency, and new system architectures. This drives demand for higher integration density, larger substrate form factors, increased layer counts, and faster innovation cycles.
Financial discipline and risk mitigation
Based on agreed upon key terms, the Ꞓ 1.5 to 2.0 billion investment is fully supported and financed by long-term customer commitments. “We are structuring these agreements to support long-term growth while maintaining financial discipline,” says AT&S CFO Gerrit Steen. “At the same time, they support our objective of further strengthening our balance sheet and financial flexibility.”
Increased outlook
Key financial elements of the agreements, which remain subject to final negotiation and execution, include payments from customers, which are expected to positively impact revenue and earnings in the current year. Full operational impact will materialize over the next couple of years.
In the financial year 2026/27, AT&S now expects constant-currency revenue growth of 45 to 55% compared to the previous year (previously: 30 to 35%). The expected EBITDA margin of 32 to 37% means another significant increase in profitability (previously: 25 to 29%). Driven by the expansions, the management plans now CAPEX of roughly Ꞓ 1.0 to 1.2 billion for 2026/27 (previously: Ꞓ 400 million) with a positive operating free cash flow.
The forecast assumes no significant deterioration of the geopolitical situation or in the currently tight supply of key materials such as fiberglass mats. The management continues to closely monitor these developments and remains prepared to adapt as needed.
