Background
The ongoing artificial intelligence (AI) revolution is profoundly reshaping the semiconductor industry, creating an exponential demand for advanced packaging solutions and high-performance substrates. Amidst intensifying global competition to develop advanced data centers and AI accelerators, securing reliable and scalable IC substrate suppliers has become a critical imperative for leading chip design companies such as AMD. Leveraging its deep technological expertise and established manufacturing capabilities, AT&S is strategically strengthening its position within the advanced semiconductor supply chain by directly addressing this burgeoning demand. Furthermore, Malaysia, with its robust and established ecosystem for semiconductor back-end processes, continues to be an attractive strategic location for such substantial manufacturing investments.
Key Findings
AT&S, an Austrian manufacturer renowned for its advanced IC substrates and PCBs, has announced a significant expansion of its Kulim manufacturing site in Malaysia. This strategic move is anchored by long-term agreements with key customers, including AMD and another leading technology company, and aims to substantially boost high-end IC substrate production capacity specifically for artificial intelligence (AI) and high-performance computing (HPC) infrastructure.
This expansion plan represents a substantial investment, estimated between €1.5 billion and €2 billion. Critically, this investment is fully financed through long-term customer agreements, including those with AMD, significantly mitigating AT&S’s financial risk. The project encompasses both the enhancement of existing production capacity at Plant 1 and the renovation of the currently unused Plant 2 building, coupled with the construction of entirely new manufacturing facilities for IC substrate cores and advanced PCBs. This comprehensive upgrade positions AT&S to address the evolving demands of advanced packaging, which require higher integration density, larger substrate form factors, and increased layer counts.
AT&S projects a positive impact on its Earnings Before Interest and Taxes (EBIT) of tens of millions of euros in fiscal year 2026/27, underscoring the company’s commitment to long-term revenue growth. The escalating requirements of AI chips and HPC processors necessitate increasingly complex and higher-performance substrates to facilitate enhanced data processing capabilities and optimized power efficiency. AT&S’s advanced IC substrates are engineered to be critical components in meeting these demanding specifications.
The Kulim plant expansion represents a pivotal strategic maneuver by AT&S, designed to capitalize on significant long-term growth opportunities within the AI and HPC markets. This substantial investment is projected to not only significantly enhance the company’s production capacity but also to deepen its relationships with critical customers and strengthen technological partnerships. As global AI infrastructure continues its rapid evolution, the demand for high-value, high-performance IC substrates is anticipated to rise unabated, and AT&S is proactively positioning itself to meet this sustained trend. Moreover, this initiative is expected to further elevate Malaysia’s standing as an advanced semiconductor manufacturing hub within the global supply chain.
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