Taiwan's chip packaging and testing companies are entering a new growth cycle as AI chips get more complex, good news for their shareholders and for the wider AI supply chain.

• Packaging and testing stocks jumped last week, led by King Yuan Electronics, with Sigurd, Chipbond peer Ardentec, Powertech and ASE all rising too.
• AI chips now need fancier packaging and tougher testing, so these firms are spending big to expand capacity.
• ASE expects its advanced packaging and testing revenue to beat its own forecast this year and double next year.
• Powertech says AMD and Broadcom have already booked up all its new panel-level packaging capacity, with mass production starting mid-next year.
• King Yuan's testing of Nvidia's next-generation Rubin chips slipped to the fourth quarter because of a cooling redesign, pushing its growth later in the year.

Outlook: Memory and DRAM orders plus rush orders should keep the sector busy through the second half, with the biggest volume boost landing in the fourth quarter.