Capital spending by King Yuan increases by 37%
King Yuan Electronics Co Increases Capital Expenditure for AI Chip Expansion
King Yuan Electronics Co, a Taiwanese chip tester, has announced an increase in its annual capital expenditure by 37%, reaching NT$37 billion (US$1.24 billion). This move is a response to the growing demand for AI chips and customized application-specific ICs.
The company, which counts Nvidia Corp and Broadcom Inc among its customers, made these announcements in filings with the Taiwan Stock Exchange. The new budget is a record high for King Yuan Electronics Co, marking a 100% increase from the NT$14.86 billion spent last year on new facilities and equipment.
The board of directors approved a rights issue of 80 million new shares to fund the purchases of new manufacturing equipment. This investment is expected to expand the company's high-end chip testing capacity. In May, King Yuan acquired a new manufacturing facility in Miaoli County's Toufen Township for NT$327 million to support this capacity expansion.
The surge in global AI chip capital expenditure is noteworthy. Large US cloud and semiconductor firms spent hundreds of billions in 2025 on AI infrastructure, indicating strong industry-wide growth. This environment, coupled with geopolitical and market pressure influencing semiconductor investments, could shape strategic investment decisions for firms like King Yuan. However, as of August 2025, there is no direct public information about King Yuan increasing capital expenditure explicitly for AI chip production or details on expansion plans in Singapore and potential new fab construction.
The board of directors has also approved a new capital injection plan of S$100 million (US$77.8 million) for King Yuan's Singaporean subsidiary, KYEC Singapore Pte Ltd. The company's net profit soared 98% to NT$6.47 billion in the first half of this year, compared with NT$3.27 billion in the same period of last year.
Wafer probing services were the second-largest revenue contributor, with a 37.2% share in the first quarter. Final test services were the biggest revenue contributor in the first quarter, accounting for 45.7% of total revenue. The latest revenue breakdown was not provided in the current report.
The earnings per share of King Yuan increased to NT$5.29 in the first half, up from NT$2.68 a year earlier. The gross margin of King Yuan slightly increased to 34.56% from 34.19%.
While no new information about King Yuan's customers was provided in the current report, the company's involvement in the expanding IC packaging and testing supply chain, related to Nvidia’s Rubin GPUs for next-gen AI servers expected in late 2026, implies ongoing investment and capacity expansion in Taiwan’s semiconductor supply chain.
The company's potential new fab in Singapore is still speculative, as no concrete confirmation or announcements about King Yuan’s capital expenditure increase specifically targeting AI chip fabs or Singapore expansion have been made. Further detailed company disclosures or press releases would be needed for precise and up-to-date confirmation.
Technology plays a significant role in King Yuan Electronics Co's strategic investment decisions, as evident in their announced increase in capital expenditure for AI chip expansion. This surge in global AI chip capital expenditure, particularly from large US cloud and semiconductor firms, indicates strong industry-wide growth.
