Core Insights - Arm Holdings is increasing its investment in self-developed chips, marking a significant shift from its long-standing reliance on intellectual property licensing [1] - The company's first fiscal quarter report showed sales of $1.05 billion, slightly below market expectations of $1.06 billion, and adjusted earnings per share of $0.35, in line with expectations [1] - For the second fiscal quarter, Arm forecasts adjusted earnings per share between $0.29 and $0.37, below the analyst average expectation of $0.36, with revenue expected between $1.01 billion and $1.11 billion, consistent with the $1.06 billion expectation [1] Company Strategy - Arm plans to develop a complete range of products including chiplets, physical chips, motherboards, and systems, with chiplets serving as modular components for building complete processors [2] - The self-developed chip initiative is seen as an extension of Arm's CSS business, which integrates IP into semi-custom services, targeting the high-margin data center market [2] - Previous indications of Arm's self-developed chip plans emerged during a lawsuit with Qualcomm, where Qualcomm accused Arm of competing with its customers [2] Market Impact - The shift towards self-developed chips may lead to direct competition with existing customers, potentially straining relationships and trust [3] - High costs associated with chip development could increase future earnings uncertainty, and the timeline for profitability from the new strategy remains unspecified [3] - The market has already reacted negatively to Arm's strategic shift, as evidenced by an 8% drop in stock price following the announcement [1][2]

Core Viewpoint - The semiconductor packaging and testing industry is undergoing significant changes as traditional OSAT (Outsourced Semiconductor Assembly and Test) companies face intense competition from foundries like TSMC, Samsung, and Intel, which are entering the advanced packaging sector. Traditional OSAT firms are actively expanding their capabilities and investing in advanced packaging technologies to maintain their market positions [1][16][38]. Group 1: Traditional OSAT Companies' Expansion - ASE Group (日月光) is expanding its advanced packaging capacity by investing $200 million in a FOPLP production line in Kaohsiung, Taiwan, aiming for mass production by the end of the year [2][3]. - ASE has also inaugurated its fourth and fifth factories in Penang, Malaysia, with a total investment of $300 million to meet the growing demand for automotive semiconductors and AI applications [3][4]. - ASE is acquiring two packaging factories from Infineon in the Philippines and South Korea for approximately NT$2.1 billion to enhance its capabilities in automotive and industrial automation applications [5][6]. Group 2: Amkor Technology's Developments - Amkor plans to triple the annual production capacity of its factory in Vietnam from 1.2 billion to 3.6 billion units, reflecting strong growth in the region [7][8]. - The company is investing $2 billion to build an advanced semiconductor packaging and testing facility in Arizona, USA, primarily serving TSMC and Apple [8][9]. Group 3: Longsys Technology's Innovations - Longsys Technology is focusing on high-density packaging technologies, including 2.5D/3D packaging, and has launched a high-end manufacturing project in Jiangsu with a total investment of 10 billion yuan [9][24]. - The company has developed a high-density heterogeneous integration technology platform, XDFOI, which has entered stable mass production and is being applied in high-performance computing and AI fields [24][25]. Group 4: Tongfu Microelectronics' Advancements - Tongfu Microelectronics has established a 2.5D/3D packaging platform and is expanding its capabilities in high-performance computing, with new processes developed for chiplet packaging [28][29]. - The company is also focusing on glass substrate packaging technology to meet the demands of various high-performance chip applications [29][30]. Group 5: Huada Semiconductor's Strategic Moves - Huada Semiconductor is investing in advanced packaging technologies, including SiP and 3D packaging, and has launched a new 2.5D packaging technology platform to cater to AI demands [31][32]. - The company is also developing a 3D Matrix packaging platform that integrates TSV and eSiFo technologies for high-density heterogeneous integration [35][36]. Group 6: Powertech Technology's Expansion - Powertech Technology is expanding its testing capabilities in Japan with a new investment of 5 billion yen to enhance its semiconductor testing and mass production capabilities [13][14]. - The company is evaluating a proposal to establish a high-end chip packaging factory in Japan, aiming to leverage the country's advanced testing technology and stable automotive chip market [14][36].