Inside AT&S's 29% Surge: The AMD Deal, a €2 Billion AI Bet, and What It Means for Investors

The Deal That Fueled the Rally

At the heart of the news is AT&S's new agreement to supply high-end IC substrates—the critical interconnect layers that sit between a chip and the circuit board—for AI and high-performance computing (HPC) processors . The company named AMD as an anchor customer and disclosed a second partnership with another leading technology company, whose identity has not been made public .

These are long-term supply agreements, giving AT&S the revenue visibility to commit capital to a massive expansion plan . The company was already a known supplier to AMD, providing substrates for its data center processors, but the new deal represents a dramatic scaling of that relationship .

Where the €2 Billion Is Going

AT&S will spend between €1.5 billion and €2.0 billion (approximately $1.74–$2.3 billion) across two key manufacturing sites .

• Kulim, Malaysia: Expansion of an existing plant and the fit-out of a previously unused second building. This site is the centerpiece of the company's AI substrate strategy and will ship products primarily to AMD for assembly and testing by OSAT partners in the region .
• Chongqing, China: Capacity expansion at the existing facility, also backed by long-term customer commitments .

The investment is fully supported by customer commitments, though those agreements remain subject to final contract execution . The related capital expenditure is estimated at €1.0 to €1.2 billion, with the company expecting a significantly positive operating free cash flow from the expansion .

Revised Guidance for FY 2026/27

Alongside the expansion news, AT&S issued a markedly improved outlook for the current financial year .

• Currency-adjusted revenue growth: 30–35% .
• EBITDA margin: 25–29% .

This represents a significant upgrade. In late 2024, the company had slashed its FY 2026/27 revenue forecast from around €3.0 billion to a range of €2.1–€2.4 billion, citing a challenging market environment . The new growth figures signal that demand, particularly from the AI sector, has rebounded far more strongly than management had anticipated just months earlier.

To support its financing strategy, AT&S also announced it may issue up to €500 million in hybrid capital market instruments .

The Strategic Rationale

The logic behind the dual-site expansion is straightforward: AT&S is positioning itself as an indispensable supplier for the AI infrastructure buildout . High-end IC substrates are a bottleneck component for advanced packaging technologies used in AI and HPC chips, and the company is one of the few manufacturers with the technical capability to produce them at scale .

By expanding in both Malaysia and China, AT&S diversifies its geographic footprint, deepens its strategic partnerships with AMD and other tech firms, and locks in long-term demand in a market where sustained supply constraints are expected .

What About Dividends?

For income-focused investors, the news is less positive. AT&S has confirmed it will not pay a dividend for the 2024/25 or 2025/26 financial years . The company posted a net loss of €25.6 million in FY 2025/26, and management is prioritizing reinvestment of cash flow into the AI capacity expansion .

CEO Michael Mertin has indicated that dividends will only resume once the company returns to sustained profitability . The proposal to skip the payout will be put to shareholders at the annual general meeting on July 9, 2026 .

For now, the market is clearly rewarding the growth story over the lack of a dividend. With a market capitalization above €7.7 billion and a 500% year-to-date gain, AT&S is one of the top-performing major stocks in Europe—and its bet on AI substrates has only just begun .