Powertech says it is on track to ship for AMD soon

FANOUT ADVANTAGE: The chairman spoke confidently about the advantage from its packaging method, as the company looks forward to an investment with Broadcom

Powertech Technology Inc (力成科技), which provides packaging services for memory and logic chips, yesterday said that it is on track to start shipping artificial intelligence (AI) chips utilizing its advanced panel-level packaging (PLP) technology for Advanced Micro Devices Inc (AMD) in the second half of next year, dismissing concerns over delays.

AMD is one of the company’s first clients adopting the fanout PLP technology, which is considered more cost-effective than the mainstream chip-on-wafer-on-substrate technology.

Powertech said it has moved in and installed all equipment as scheduled.

The equipment is in the qualification process and the company plans to start mass production by June next year, in line with AMD’s production plans, it said.

“We have navigated volume production hurdles from equipment delivery delays, equipment installation to product qualifications,” Powertech chairman Tsai Du-kung (蔡篤恭) said at an earnings conference. “We are confident that we can commence volume production by the middle of next year, which will make Powertech the world’s first company to deliver large-scale AI applications” utilizing fanout PLP technology.

The company is capable of packaging 45 AI chips using its fanout PLP technology, surpassing 8 to 9 chips packaged using wafer-based packaging technology, Tsai said.

As Powertech took the lead in developing fanout PLP technology in 2015, it would take at least three years for a newcomer to tap into the market, he said.

Powertech yesterday posted the strongest profit in more than two years in the second quarter, owing to robust demand for AI-related memory packaging and testing services.

Net profit was NT$2.85 billion (US$88 million), up 19.4 percent from NT$2.39 billion in the first quarter, or 123.5 percent from NT$1.28 billion a year earlier, the company said.

Earnings per share climbed to NT$3 from NT$2.5 in the prior quarter and NT$1.3 in the second quarter last year, it said.

The financial growth supports the company’s confidence that revenue would hit a new high this year, after its last record of NT$83.9 billion in 2022.

Revenue this quarter is expected to grow by a double-digit percentage sequentially from NT$23.12 billion and would rise even higher next quarter, Powertech CEO Boris Hsieh (謝永達) said.

Gross margin would be higher this quarter than last quarter’s 21.8 percent, which was the best in about 16 quarters due to increases in customer demand, higher factory utilization and price hikes, Hsieh said.

The company said capital expenditures would remain at NT$50 billion for this year, although on July 16, it unveiled a new US$400 million investment with Broadcom Inc to create a joint venture in Singapore to meet customer demand for advanced panel-based packaging services.

That partnership would help Powertech enter the optical communications sector by offering co-packaged-related technology, Tsai said.

Powertech is set to start shipping optical engines integrated with switches in the middle of next year and to integrate its optical engine with AI chips in 2028, he said.