The announcement sparked a strong reaction from investors, with AT&S shares soaring nearly 30% on Monday and briefly touching a record high of €200 before easing slightly.
Speaking to Reuters, Chief Executive Michael Mertin confirmed that the company would significantly expand its operations in Kulim, Malaysia, a growing hub for semiconductor manufacturing in Southeast Asia.
"We will fully expand our site in Kulim," Mertin said, outlining the company's ambitious plans to strengthen its position in the rapidly evolving AI supply chain.
AI Boom Drives Expansion
AT&S revealed over the weekend that it would increase production capacity at its Malaysian facilities and upgraded its financial outlook for the 2026/27 fiscal year. The company attributed the improved forecast to new agreements with key customers, including U.S. chipmaker AMD, amid accelerating global demand for AI infrastructure.
The electronics manufacturer specializes in high-end printed circuit boards and advanced semiconductor packaging technologies, which are critical components used in AI servers, data centres and next-generation computing systems.
Industry analysts have pointed to the explosive growth of artificial intelligence applications as a major driver of demand for advanced semiconductor components, creating fresh opportunities for suppliers such as AT&S.
Backed by Long-Term Customer Commitments
According to the company, the planned investments will fund additional production capacity at its existing Kulim facility as well as the activation of a previously unused building at its second plant in the region.
AT&S stressed that the expansion is being supported by long-term commitments from customers, reducing financial risk and providing visibility for future growth.
"The investments required for additional production capacity at the existing plant and in the previously unused building at the second plant in Kulim were fully supported and financed by long-term customer commitments," the company said.
While AT&S publicly named AMD as one of its key partners, it declined to identify a second major technology customer. However, industry sources cited by Reuters indicated that the unnamed client is likely Intel.
Targeting Top U.S. Technology Companies
Mertin said the company expects to deepen relationships with some of the world's most influential technology firms as demand for AI hardware continues to accelerate.
"We expect to have represented at least five of the leading high-tech clients we know as tech partners from the U.S.," he said.
The comments underscore AT&S's growing importance within the semiconductor ecosystem, particularly as global technology companies race to build the computing power required to support increasingly sophisticated AI models and cloud-based services.
Investors Cheer Growth Prospects
Investors welcomed the expansion plans and stronger earnings outlook, sending AT&S shares up 28.5% to €199 by mid-morning trading. The stock earlier hit an all-time high of €200, reflecting confidence that the company is well-positioned to benefit from the ongoing AI investment cycle.
The sharp rise also highlights growing market optimism around companies supplying critical components for AI infrastructure, a sector that has attracted billions of dollars in investment over the past two years.
Dividend Pause Likely
Despite the upbeat growth outlook, shareholders may have to wait longer for dividend payments.
Mertin indicated that AT&S is likely to suspend dividends for both the current financial year and the following year as the company prioritises funding its massive expansion programme.
The move reflects a broader strategy of reinvesting earnings into capacity growth at a time when demand for advanced semiconductor technologies is expected to remain strong.
With billions earmarked for expansion and long-term customer agreements already in place, AT&S is positioning itself to become one of the key beneficiaries of the global AI spending boom, while strengthening Malaysia's role as an increasingly important centre for semiconductor manufacturing.