Powertech to acquire a facility from AUO Corp

Chip packaging service provider Powertech Technology Inc (力成科技) yesterday said it plans to acquire a facility from AUO Corp (友達) for NT$6.9 billion (US$221.51 million) in a bid to expand advanced packaging capacity as customer demand is outpacing its supply amid an artificial intelligence (AI) boom.The deal would accelerate ramping up of Powertech’s first fan-out panel-level packaging (FOPLP) technology to satisfy fast-rising demand for the advanced technology used in AI, high-performance computing and vehicle chips, Powertech said in a statement.Powertech has received positive customer feedback about its FOPLP technology, with orders greatly surpassing capacity, it said.It can only commit to delivering half of the potential orders it has fielded, Powertech chairman Tsai Du-kung (蔡篤恭) told an earnings conference two weeks ago.Powertech said in the statement that it expects its first FOPLP production line to enter volume production in 2027, following a decade of heavy investment. The company plans to spend US$1 billion on the new packaging technologies next year, it said.Advanced packaging technology has become a core strength for semiconductor companies to gain a competitive edge, as such technology can support increasing AI computing power demand, the statement said.Powertech uses large rectangular panels that can offer at least three times greater production throughput than other advanced packaging technologies that use a circular, 12-inch wafer as a carrier, it said.AUO expects to book a disposal gain of NT$3.85 billion from selling the less-advanced LCD manufacturing plant in Hsinchu, codenamed L3C, along with manufacturing equipment, the flat-panel maker said in a separate statement submitted to the Taiwan Stock Exchange.The plant was originally used to produce flat-panel PC displays.The transaction is the latest in efforts by AUO to dispose of less-advanced fabs as it seeks to improve its financial structure.The latest deal is part of its “asset light” strategy and asset rejuvenation policy, AUO said.